Even in a healthy economy, businesses close down, go bankrupt, fail. It is a natural part of capitalism. In a depression, the trickle becomes a torrent, as the malinvestments cascade one upon the other, as the most carefully laid business plans are slain by the twin armies of empty pockets and internal corporate inertia.
The retailers that went down the tubes in 2008 will not be missed. After all, capitalism is a dynamic process. Inefficient and insolvent firms fail or are absorbed by other firms, causing temporary severe pain and dislocation but also rendering capital more productive over the long run. The depression is a necessary healing of misallocations and gross distortions of the market caused by the fiat money induced boom.
And this year was the tip of the iceberg. Depressions have historically been most unkind to the retail sector. In this depression in particular, retail is especially vulnerable to the reaper, as the structural members of the cheep credit fiesta that propped up the economy over the past two decades have finally imploded, rendering the retail sector forever changed. The nation has far too many shopping centers, plazas, strip malls, and lifestyle centers for the consumer base to support. It is time to permanently downsize.
So here is the rundown:
- Mervyns: Believe it or not, I was a dedicated Mervyns shopper during those rare times that I deigned to crack open my wallet to purchase clothing. For all practical purposes, Mervyns disappeared from my world in 2005 when the chain disinvested from Louisiana. This means more business for JCPenney, as that is where my clothing dollars have been directly transferred.
- Steve and Barry's: From what is known it appears that this retailer's business model was identical to the now-deceased bankster front Washington Mutual - big up-front profits upon acquiring assets (that is, store locations), long term losses on nonproductive assets (that is, store locations). I shed no tears.
- The Sharper Image: This was a store? More like an infomercial in my book.
- CompUSA: Permanently stuck in 1995 upon my last visit, it shocked me that this store actually survived into the present.
- Circuit City: Yeah, I know it's not liquidated yet. But in the words of Yoda, give it time.
- Linens n' Things: I know my mother will be so sorry to hear this store is dead and in its grave.
- Bennigan's, Steak and Ale: Yes, restaurants are retailers -they sell food and spirits. And look for this to be the first of many bankruptcies of those odious and omnipresent "casual dining" chains. Every single one I have had the misfortune to visit have been truly awful, in terms of food quality, service, and atmosphere (all of them attempt, poorly, to create faux 'character' by sticking copious amounts of ersatz-vintage shit on their walls). Nothing beats local establishments, folks. Support your local po-boy (or hoagie, or hero, or whatever) shop!
- Levitz Furniture: They vacated Louisiana a long time ago so I could care less.
- KB Toys: Perennial mall staple. Hard to believe, yet not so illogical. Wal*Mart-saurus Rex strikes again!!
Predicted 2009 failures:
- Circuit City (no brainer there)
- Sears/Kmart (I can only dream)
- Ruby Tuesday
- The Bon-Ton (may survive, but only in truncated form)
- One or more office supply chains (fewer dickheads to go around, y'know)
- And much, much more! Stay tuned....