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  1. #1
    Senior Member AirborneSapper7's Avatar
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    Retail Apocalypse: Why Are Major Retail Chains All Over America Collapsing?

    Retail Apocalypse: Why Are Major Retail Chains All Over America Collapsing?

    By Michael, on February 17th, 2013

    If the economy is improving, then why are many of the largest retail chains in America closing hundreds of stores?

    When I was growing up, Sears, J.C. Penney, Best Buy and Radio Shack were all considered to be unstoppable retail powerhouses.

    But now it is being projected that all of them will close hundreds of stores before the end of 2013.

    Even Wal-Mart is running into problems. A recent internal Wal-Mart memo that was leaked to Bloomberg described February sales as a "total disaster".

    So why is this happening?

    Why are major retail chains all over America collapsing? Is the "retail apocalypse" upon us?

    Well, the truth is that this is just another sign that the U.S. economy is falling apart right in front of our eyes.

    Incomes are declining, taxes are going up, government dependence is at an all-time high, and according to the Bureau of Labor Statistics the percentage of the U.S. labor force that is employed has been steadily falling since 2006.

    The top 10% of all income earners in the U.S. are still doing very well, but most U.S. consumers are either flat broke or are drowning in debt. The large disposable incomes that the big retail chains have depended upon in the past simply are not there anymore. So retail chains all over the United States are now closing up unprofitable stores. This is especially true in low income areas.

    When you step back and take a look at the bigger picture, the rapid decline of some of our largest retail chains really is stunning.

    It is happening already in some areas, but soon half empty malls and boarded up storefronts will litter the landscapes of cities all over America.

    Just check out some of these store closing numbers for 2013.

    These numbers are from a recent Yahoo Finance article...

    Best Buy
    Forecast store closings: 200 to 250

    Sears Holding Corp.

    Forecast store closings: Kmart 175 to 225, Sears 100 to 125

    J.C. Penney

    Forecast store closings: 300 to 350

    Office Depot

    Forecast store closings: 125 to 150

    Barnes & Noble

    Forecast store closings: 190 to 240, per company comments

    Gamestop

    Forecast store closings: 500 to 600

    OfficeMax

    Forecast store closings: 150 to 175

    RadioShack

    Forecast store closings: 450 to 550

    The RadioShack in a nearby town just closed up where I live. This is all happening so fast that it is hard to believe.

    But the truth is that those store closings are not the entire story. When you dig deeper you find a lot more retailers that are in trouble.

    For example, Blockbuster recently announced that this year they will be closing about 300 stores and eliminating about 3,000 jobs.

    Toy manufacturer Hasbro recently announced that they will be reducing the size of their workforce by about 10 percent.

    Even Wal-Mart is going through a tough stretch right now. According to documents that were leaked to Bloomberg, Wal-Mart is having an absolutely disastrous February...

    Wal-Mart Stores Inc. had the worst sales start to a month in seven years as payroll-tax increases hit shoppers already battling a slow economy, according to internal e-mails obtained by Bloomberg News.

    “In case you haven’t seen a sales report these days, February MTD sales are a total disaster,” Jerry Murray, Wal- Mart’s vice president of finance and logistics, said in a Feb. 12 e-mail to other executives, referring to month-to-date sales. “The worst start to a month I have seen in my ~7 years with the company.”

    So what in the world is going on here?

    The mainstream media continues to proclaim that we are experiencing a robust "economic recovery", but at the same time there are a whole host of indications that things are continually getting worse.

    Even global cell phone sales actually declined slightly in 2012. That was the first time that has happened since the last recession.
    Perhaps it is time that we faced the truth. The middle class is shrinking, incomes are declining and there are not nearly as many jobs as there used to be.

    Mort Zuckerman pointed this out in a recent article in the Wall Street Journal...

    The U.S. labor market, which peaked in November 2007 when there were 139,143,000 jobs, now encompasses only 132,705,000 workers, a drop of 6.4 million jobs from the peak. The only work that has increased is part-time, and that is because it allows employers to reduce costs through a diminished benefit package or none at all.

    So how can the mainstream media be talking about how "good" things are if we still have 6.4 million fewer jobs than we had back in November 2007?

    And sadly, things may soon be getting a lot worse. If Congress does not do anything about the "sequester", millions of federal workers may shortly be facing some very painful furloughs according to CNN...

    Federal workers could start facing furloughs as early as April, according to federal agencies trying to prepare for the worst.

    Unless Congress steps in, some $85 billion in massive spending reductions will hit the federal government, doling out furloughs to much of the nation's 2.1 million federal workforce, experts say.

    If you still live in an area of the country where the stores and the restaurants are booming, you should be very thankful because that is not the reality for most of the country.

    I often write about the stunning economic decline of major cities such as Detroit, but there are huge sections of rural America that are in even worse shape than Detroit in many ways.

    For example, many Indian reservations all over America have been shamefully neglected by the federal government and have become hotbeds for crime, drugs and poverty.

    Business Insider recently profiled the Wind River Indian reservation in western Wyoming. The following is a brief excerpt from that outstanding article...

    The Wind River Indian Reservation is not an easy place to get to, but I had to see it for myself.

    Thirty-five-hundred square miles of prairie and mountains in western Wyoming, the reservation is home to bitter ancestral enemies: the Eastern Shoshone and Northern Arapaho tribes.

    Even among reservations, it's renowned for brutal crime, widespread drug use, and legal dumping of toxic waste.

    You can see some amazing photos of the Wind River Indian reservation right here.

    It is hard to believe that there are places like that in America, but the truth is that conditions like that are spreading to more U.S. communities with each passing day.

    We are a nation that is in an advanced state of decline. But as long as the financial markets are okay, our leaders don't seem too concerned about the suffering that everyone else is going through.

    In fact, former Federal Reserve Chairman Alan Greenspan essentially admitted as much during a recent interview with CNBC. The following is how a Zero Hedge article summarized that interview...

    Starting at around 1:50, Greenspan states the odds of sequester occurring are very high - in fact, the playdough-faced ex-Chair-head notes, "I find it very difficult to find a scenario in which [the sequester] doesn't happen" But when asked how this will affect the economy, Awkward Alan is unusually clearly spoken - "the issue is how does it affect the stock market."

    While not so many of our leaders have taken the path to direct truthiness, Greenspan somewhat shocks a Botox'd and babbling Bartiromo when he admits "the stock market is the key player in the game of economic growth."

    Bartiromo shifts uncomfortably in her seat, strokes her imaginary beard and stares blankly as Greenspan explains that while the sequester will have a real effect on the real economy, "if the stock market can hold up through this, then the effect will be rather minor."


    Do you see?

    As long as the stock market is moving higher they think that everything is just fine and dandy.

    And the Obama administration?

    They continue to pursue the same policies that got us into this mess.

    Their idea of "economic reform" is to threaten to sue businesses that do not hire ex-convicts.

    And of course now that Obama has been re-elected he is putting a tremendous amount of effort into "stimulating the economy".

    For example, he spent this weekend golfing in Florida, and the Obamas recently spent about 20 million taxpayer dollars vacationing in Hawaii.

    Meanwhile, the U.S. economy is getting worse with each passing day.

    If you doubt that economic conditions are getting worse, please read this article: "Show This To Anyone That Believes That 'Things Are Getting Better' In America".
    When you look at the cold, hard numbers, it is undeniable what is happening to America.

    And our leaders are not doing anything to fix our problems. In fact, most of the time they are just making things worse.

    So buckle up and get prepared. We are in for very bumpy ride, and this is only just the beginning.




    February 17th, 2013 | Tags: America, Apocalypse, Best Buy, Broke,Collapsing, Debt, Declining, Disaster, Disposable Incomes, Drowning In Debt, Employed, Flat Broke, Government Dependence, In Debt, Income,Income Earners, Incomes, J.C. Penney, Low Income, RadioShack,Retail, Retail Chains, Sales, Sears, Stores, Taxes, The Economy, The U.S. Labor Force, The United States, Total Disaster, U.S. Consumers,Wal-Mart | Category: The Next Great Depression


    Retail Apocalypse: Why Are Major Retail Chains All Over America Collapsing?


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  2. #2
    Senior Member AirborneSapper7's Avatar
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    Monday, February 18, 2013 11:07 AM

    Walmart Senior VP Asks "Where are All the Customers? And Where’s Their Money?"; "February MTD Sales a Total Disaster"

    Here's an interesting story from Friday regarding sales at Walmart that just came my way: Wal-Mart Executives Sweat Slow February Start in E-Mails.


    Wal-Mart Stores Inc. had the worst sales start to a month in seven years as payroll-tax increases hit shoppers already battling a slow economy, according to internal e-mails obtained by Bloomberg News.

    "In case you haven’t seen a sales report these days, February MTD sales are a total disaster,” Jerry Murray, Wal-Mart’s vice president of finance and logistics, said in a Feb. 12 e-mail to other executives, referring to month-to-date sales. “The worst start to a month I have seen in my ~7 years with the company"

    Murray’s comments about February sales follow disappointing results from January, a month that Cameron Geiger, senior vice president of Wal-Mart U.S. Replenishment, said he was relieved to see end, according to a separate internal e-mail obtained by Bloomberg News.

    “Have you ever had one of those weeks where your best-prepared plans weren’t good enough to accomplish everything you set out to do?” Geiger asked in a Feb. 1 e-mail to executives. “Well, we just had one of those weeks here at Walmart U.S. Where are all the customers? And where’s their money?”

    Murray declined to comment and Geiger didn’t return telephone and e-mail messages seeking comment.

    Both executives attributed the performance to increased payroll taxes and delayed tax returns, which Geiger called “a potent one-two punch,” according to the e-mails.
    Mike "Mish" Shedlock
    Mish's Global Economic Trend Analysis


    Mish's Global Economic Trend Analysis: Walmart Senior VP Asks "Where are All the Customers? And Where’s Their Money?"; "February MTD Sales a Total Disaster"
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    Senior Member AirborneSapper7's Avatar
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    The Spending Crunch Is Official: "We Are Confident There Is An Issue With The Consumer"

    Submitted by Tyler Durden on 02/20/2013 10:42 -0500





    Think the Walmart "disastrous" sales memo was a one-off event, which net of Walmart's damage should be completely ignored (something the market has been perfectly happy to oblige with)? Then listen to a separate perspective on the US consumer, this time from a very different angle: that of Town Sports International which operates such gyms as New York Sports Club, and specifically its CEO David Gallagher, who in last night's conference call just confirmed what everyone knows: "As we moved into January membership trends were tracking to expectations in the first half of the month, but fell off track and did not meet our expectations in the second half of the month.

    We believe the driver of this was the rapid decline in consumer sentiment that has been reported and is connected to the reduction in net pay consumers earn given the changes in tax rates that went into effect in January."


    It goes on:


    Based on how broad-based the slowdown has been quarter-to-date, we are confident there is an issue with the consumer. We were going to do everything in our power to make up for this January member shortfall, we continue to see softness and expect to net less than half the net member gain that was achieved in Q1 of 2012. Unfortunately, we are also seeing the softness in our ancillary revenue.

    And on:

    While the consumer has recently turned much more cautious again, we were hoping that it will be temporary, and we are confident that the foundation and ability to execute at a very high level that we now have in place will serve us well. We have worked very hard to rebound from the recession and rebuild our membership base from the low we experienced in 2009.

    And on:

    So we’re seeing the behavior very similar and we’re very confident that it is coming from the consumer. As I mentioned earlier in my script part portion, when we look at our business there are really 3 components that we’re watching closely all the time. The first is execution and how we delivering our product and services. Second is, what the competition looks like how it has changed mark-to-market, year-on-year and then in terms of consumer behavior. We’ve seen consumer sentiment change drastically within the last couple of months. We saw that after the first really payroll period in January, which is about the second week of January, we really start seeing a slowdown in Ancillary, Personal Training and membership sales. And our sort of increase that we’ve seen on the cancellation side is directly related to the members that are non-users. So it really does go to the consumer side of the business.

    And on:

    We believe that once consumers understand our average member is probably losing somewhere in the area of about $1,500 a year once our members understand the impact they have on their daily living with the rising cost of gas and the lower income from social security or the taxes that they’re seeing now.

    But there may be hope:

    We estimate close to half of this loss is membership attributable to Hurricane Sandy.

    Luckily, in a centrally-planned, command economy, who needs such meaningless fundamental staples as cash flow, consumption or even trade...

    Source: CLUB earnings call transcript

    The Spending Crunch Is Official: "We Are Confident There Is An Issue With The Consumer" | Zero Hedge
    Last edited by AirborneSapper7; 02-20-2013 at 09:03 PM.
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