While most Americans will be watching the ball drop in New York on New Year's Eve, many business owners will continue to see their profits drop. Expect tens of thousands of stores to close their doors in 2009.
According to the Sun-Times, several retail analysts believe big names in the business will shut down thousands of money-losing stores or be wiped off the map completely. As many as 73,000 retail locations will likely close during the first few months of 2009, and 20 to 40 percent of retail chains could go entirely out of business.
"You'll see department stores, specialty stores, discount stores, grocery stores, drugstores, major chains either multi-regionally or nationally go out," said Burt Flickinger, managing director of Strategic Resource Group, a retail research firm, in a Bloomberg Radio interview. "There are a number that are real causes for concern."
Consumers have already watched a number of big retailers come tumbling down. Circuit City Stores, Linens ‘N Things, Sharper Image, and Steve & Barry's all filed for bankruptcy this year. This trend will continue further in February, when many chains will file their financial reports.
Ann Taylor announced earlier in the year that it was closing 117 underperforming stores over a three year period. Sears and Talbots are also closing stores.
"The key is that the consumer is in the worst condition since the Great Depression," Davidowitz said. And if consumers aren't buying, retailers aren't selling.
By Flickinger's account, the retail recession is just beginning. Bankruptcies and store closings could continue for the next two years.