It’s Only April, And U.S. Retailers Have Already Closed More Stores Than They Did ALL Of Last Year

If the U.S. economy is in good shape, why have retailers already shuttered more stores than they did in all of 2018? Not only that, we are also on pace to absolutely shatter the all-time record for store closures in a single year by more than 50 percent. Yes, Internet commerce is growing, but the Internet has been around for several decades now. It isn’t as if this threat just suddenly materialized. As Internet commerce continues to slowly expand, we would expect to see a steady drip of brick and mortar stores close, but instead what we are witnessing is an avalanche. If the U.S. economy really was “booming”, this wouldn’t be happening. But if the U.S. economy was heading into a recession, this is precisely what we would expect to see.

Last year, U.S. retailers closed 5,864 stores.

That was a rather depressing number, but here we are in April 2019 and we have already surpassed it. The following comes from CNN

This year, US retailers have announced that 5,994 stores will close. That number already exceeds last year’s total of 5,864 closure announcements, according to a recent report from Coresight Research.

At this time last year, there was a lot of optimism for the retail industry. Foot traffic at our shopping centers rose steadily throughout the early portion of the year before peaking in August.

But then something changed, and since that time there has been a clear downward trend

Foot traffic at some of the best shopping centers across the country peaked around August 2018 and has since started to fall, after rebounding for much of last year, according to a new report from data analytics firm Thasos, which uses more than 100 million mobile phones to track when consumers enter and leave certain trade areas.

Once again, you can’t blame this on Internet commerce. Foot traffic was rising for quite a while, but now what we are seeing is perfectly consistent with an economic slowdown.

Sadly, this could be just the beginning. In fact, one expert quoted by CNBC expects total store closures in the U.S. to hit 12,000 by the end of 2019…

“I expect store closures to accelerate in 2019, hitting some 12,000 by year end,” Deborah Weinswig, founder and CEO of Coresight, said.

If that happens, we will shatter the old yearly record by about 4,000.

We are in the early innings of America’s “retail apocalypse”, and it is going to get much, much worse.

Of course it isn’t just the retail industry that is hurting right now. With each passing day, we continue to get more signs that the U.S. economy is sliding into a new recession. For example, we just learned that during the first quarter of 2019 U.S. manufacturing was down 1.1 percent compared to a year ago…

Manufacturing fell 1.1 percent in the first three months of the year compared to the same period of 2018, the Fed reported.

The biggest reason for the decline in manufacturing is quite obvious. Businesses are absolutely swamped with unsold inventory, and the inventory to sales ratio in the U.S. has been steadily rising for months.

Earlier today, a Bloomberg article commented on the bloated inventories that we are seeing all over the nation…

One overhang is the auto market, where the six-month average of dealer stocks of cars and trucks matches the highest since 2009 at 75 days. Manufacturers and sellers of furniture and clothing share the same problem, as do small businesses. The inventory swing is likely to exacerbate the U.S. slowdown, with the economy already facing headwinds from the waning impact of tax cuts, slowing global growth and continuing trade tensions.

As economic activity slows down, less stuff is being shipped around the nation by air, rail and truck. We just got a new update from the Cass Freight Index, and it shows that freight shipment volume in the U.S. has now fallen for four months in a row

Freight shipment volume in the US across all modes of transportation – truck, rail, air, and barge – in March fell 1% from last year, according to the Cass Freight Index. It was the fourth month in a row of year-over-year declines, and the first declines since the transportation recession of 2015 and 2016.

For my regular readers, these new numbers should be no surprise, because I have been tracking these trends for an extended period of time.

All of the numbers are telling us that economic conditions are getting worse, and all of the experts are telling us that we are way overdue for another recession.

Unfortunately, it isn’t likely to be “just another recession”. As I have repeatedly stressed, all of our long-term economic and financial problems have gotten far worse since the last recession. We have never seen bubbles like the bubbles that we are facing now, and the stage is set for the greatest meltdown in American history.

The only reason why we have even been able to get this far is by ruthlessly mortgaging the future. We borrowed trillions upon trillions of dollars that we should not have borrowed, and the Federal Reserve relentlessly pumped “hot money” into overheated financial markets.

Those “emergency measures” were able to stabilize the U.S. economy for a while, but in the process they made our long-term problems much, much worse.

In the end, it isn’t just the retail industry that is heading for an “apocalypse”. Our entire economy is built on a foundation of sand, and a giant storm is rapidly approaching our shores.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

Retail Layoffs Are 92 Percent Higher In 2019 – And Now Even Wal-Mart Is “Quietly Closing Stores”

Just like we witnessed during the last recession, major retailers are laying off tens of thousands of workers, and it looks like this will be the worst year for store closings in all of U.S. history. Many are referring to this as “the retail apocalypse”, and without a doubt this is one of the toughest stretches for retailers that we have ever seen. But many believe that what we have witnessed so far is just the beginning. After all, if retailers are struggling this much now, how bad will things be once the next recession really gets rolling?

Of course the truth is that things have been rocky for the retail industry for quite a few years, but the numbers are telling us that this crisis is really starting to accelerate.

According to Challenger, Gray & Christmas, retail layoffs were up a whopping 92 percent in January and February compared to the same period a year ago. The following comes from NBC News

More than 41,000 people have lost their jobs in the retail industry so far this year — a 92 percent spike in layoffs since the same time last year, according to a new report.

And the layoffs continue to mount, with JCPenney announcing this week it would be closing 18 stores in addition to three previously announced closures, as part of a “standard annual review.”

Yes, competition from Internet commerce is hurting the traditional retail industry, but it certainly doesn’t explain a 92 percent increase.

And very few retailers have been able to avoid this downsizing trend. At this point, even the largest retailer in the entire country has begun “quietly closing stores”

Walmart is closing at least 11 US stores across eight states.

The stores include one Walmart Supercenter in Lafayette, Louisiana, and Walmart Neighborhood Market stores in Arizona, California, Kansas, South Carolina, Tennessee, Virginia, and Washington.

For decades, Wal-Mart has been expanding extremely aggressively.

They have plenty of cash, and so the only way that it would make sense for them to close stores is if they anticipated that we are heading into a recession.

Here is a list of the addresses where Wal-Mart stores are closing

6085 W. Chandler Blvd., Chandler, Arizona
3900 W. Ina Road, Tucson, Arizona
1600 Saratoga Ave., San Jose, California
712 N. Western Ave., Liberal, Kansas
1229 NE. Evangeline Trwy., Lafayette, Louisiana
3603 Broad River Road, Columbia, South Carolina
1757 W. Andrew Johnson Hwy., Morristown, Tennessee
2501 University Commons Way, Knoxville, Tennessee
7000 Iron Bridge Road, North Chesterfield, Virginia
2864 Virginia Beach Blvd., Virginia Beach, Virginia
7809 NE. Vancouver Plaza Dr., Vancouver, Washington

Of course Wal-Mart is in far better shape than almost everyone else in the industry.

One of Wal-Mart’s key competitors, Shopko, has just announced that they will be shutting down all of their stores

Shopko will liquidate its assets and close all of its remaining locations by mid-June.

The company was unable to find a buyer for the retail business and will begin winding down its operations beginning this week, the company said in statement released Monday. The decision to liquidate will bring an end to the brick-and-mortar business that began in 1962 with one location in Green Bay, Wisconsin.

And personally I was very saddened to learn that Lifeway Christian Bookstores has also decided to close all their brick and mortar stores

Lifeway Christian Bookstores announced last week it would be closing the doors of all 170 brick and mortar stores, in a pivot to focusing on digital and e-commerce.

“The decision to close our local stores is a difficult one,” said Lifeway Chief Executive Officer Brad Waggoner. “While we had hoped to keep some stores open, current market projections show this is no longer a viable option.”

Whenever I do an article like this, I always have some readers that try to convince me that this is only happening because of the growth of Internet retailing.

And yes, Internet retailing has been growing, but it still accounts for less than 10 percent of all U.S. retail sales. In addition, it is important to point out that Internet retailers had a very disappointing holiday season just like brick and mortar retailers did.

Ultimately, the truth is that the U.S. economy has been steadily slowing down in recent months.

During the months of December, January and February, the amount of stuff being moved around the country by truck, rail and air was lower than during all of those same months a year earlier. The following comes from Wolf Richter

Now it’s the third month in a row, and the red flag is getting more visible and a little harder to ignore about the goods-based economy: Freight shipment volume in the US across all modes of transportation – truck, rail, air, and barge – in February fell 2.1% from February a year ago, according to the Cass Freight Index, released today. The three months in a row of year-over-year declines are the first such declines since the transportation recession of 2015 and 2016.

I have a feeling that when we get the final numbers for March that they will show that this streak has now extended to four months.

Right now, unsold goods are starting to pile up in U.S. warehouses at a rate that we haven’t seen since the last recession. Many retailers that are barely clinging to life will simply not survive if economic conditions continue to deteriorate.

Unfortunately, it appears that things are only going to get rougher for the U.S. economy in the months ahead.

So more retail workers are going to get laid off, more stores are going to close, and there are going to be a lot more stories about our ongoing “retail apocalypse” in the mainstream media.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

“Biggest Drop In More Than Nine Years”: America’s Retail Apocalypse Is Greatly Accelerating In The Early Stages Of 2019

All over America retailers are going bankrupt and closing stores. Of course this has been happening for years, but as you will see below the numbers have dramatically escalated during the early portion of 2019. Our landscape is already littered with countless numbers of hollowed out stores and abandoned malls, and it is about to get a whole lot worse. Retailers were hoping that a strong holiday season would turn things around, but that didn’t happen. In fact, we just learned that retail sales in the United States suffered “their biggest drop in more than nine years” during the month of December…

U.S. retail sales recorded their biggest drop in more than nine years in December as receipts fell across the board, suggesting a sharp slowdown in economic activity at the end of 2018.

The Commerce Department said on Thursday retail sales tumbled 1.2 percent, the largest decline since September 2009 when the economy was emerging from recession.

Every time I write an article like this, a few commenters chime in and blame this entire trend on the rise of online retailing. And without a doubt online retailing has been growing in recent years, but it still accounts for less than 10 percent of the entire industry.

If online retail sales were to blame for this latest drop, you would expect to see that reflected in the numbers. But instead, when we look at the numbers what we find is that online retailers experienced “the biggest drop ever” during the month of December…

December online internet sales (non-store retailers) tumbled 3.9% MoM – the biggest drop ever

So brick and mortar retail sales are going down and online retail sales are going down.

It is starting to smell a lot like a recession, and many in the industry are starting to panic.

And when I say panic, I mean that they are closing stores at a pace that is far faster than last year. In fact, so far retail store closings are 23 percent ahead of the pace set last year

Coresight Research released an outlook of 2019 store closures Wednesday, saying there’s “no light at the end of the tunnel.”

According to the global market research firm’s report, six weeks into 2019, U.S. retailers have announced 2,187 closings, up 23 percent compared to last year. Those closings include 749 Gymboree stores, 251 Shopko stores and 94 Charlotte Russe locations.

Unfortunately, the number of store closings is about to double because Payless ShoeSource plans to declare bankruptcy and shut down 2,300 stores

U.S. discount retailer Payless ShoeSource Inc plans to close all of its approximately 2,300 stores when it files for bankruptcy later this month for the second time in as many years, people familiar with the matter said on Thursday.

And Payless is far from alone. If you can believe it, the number of retail bankruptcies in 2019 is “already at one-third of last year’s total”

Bankruptcies also are continuing at a rapid pace “with the number of filings in the first six weeks of 2019 already at one-third of last year’s total,” the report states.

Ladies and gentlemen, this is what a retail apocalypse looks like, and we are still in the early chapters.

It is going to take some time for this drama to fully play out. Just look at Sears – it is a money bleeding zombie of a company, but Eddie Lampert has convinced investors to give things one more try. But they are going to zero, and so is JC Penney, and so are a whole host of other major retailers.

In the end, millions upon millions of square feet of retail space is going to be sitting vacant. Some of the more economically depressed areas of the country are going to closely resemble ghost towns, and we are going to see a commercial real estate crisis that is off the charts.

Switching gears, we also just learned that the number of Americans that are at least 90 days behind on their auto loans is already “more than 1 million higher” than it was during the peak of the last recession…

More than 7 million Americans are 90 days or more behind on their vehicle loans as of the end of 2018, according to data released Tuesday by the New York Federal Reserve. That’s more than 1 million higher than the peak in 2010 as the country was recovering from its worst downturn since the Great Depression.

How is that possible?

I thought that the U.S. economy was supposed to be “booming”.

Isn’t that what they have been telling us?

In recent weeks I have repeatedly brought up current economic numbers that are even worse than the last recession, and yet so many people out there continue to insist that everything is just fine.

No, everything is definitely not “just fine”.

Economic activity is slowing down dramatically, and many believe that things are about to get a whole lot worse. In fact, Peter Schiff is warning that what is ahead “is going to be worse than what we now call the Great Recession”…

People are going to realize that we checked into the monetary roach motel that I talked about from the beginning and that there’s no way out, and then the dollar is going to fall like a stone.

When they find out that it’s never over and it didn’t work, then there’s going to be nothing propping up the dollar and it’s going to drop like a stone, the price of gold is going to take off, and the recession that we’re entering into, which is going to be an inflationary recession, is going to be worse than what we now call the Great Recession.

Maybe it’s taken longer than we might have thought to play out, but this is the beginning of the end.”

I wish that I had better news for you today, but I don’t.

The retail apocalypse is accelerating, America’s debt crisis is starting to reach a critical level, and very challenging days are approaching for all of us.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

The Retail Apocalypse Picks Up Speed As Sears, JCPenney, Brookstone And Mattress Firm Spiral Toward Bankruptcy

Over 20 major retailers have filed for bankruptcy since the beginning of last year, and in 2018 we may break the all-time record for annual store closings that was established just last year. We are in the midst of the worst retail apocalypse in American history, and it appears to be picking up speed as retail giants such as Sears, JCPenney, Brookstone and Mattress Firm spiral toward bankruptcy. We live at a time when the middle class is being systematically destroyed, and so the truth is that U.S. consumers simply do not have as much discretionary income as they once did. Many large retailers believed that things would eventually turn around, and they have been fighting very hard to survive, but now time has run out for quite a few of them.

Mattress Firm

Everyone knew that Mattress Firm was in deep trouble, but it still surprised many of us when it was announced that they are officially planning to file for bankruptcy. The following comes from Reuters

Mattress Firm Inc, the largest U.S. mattress retailer, is preparing to file for bankruptcy protection as soon as this week, as it seeks to exit costly store leases and shore up its business, people familiar with the matter said on Tuesday.

At this moment Mattress Firm has approximately 3,000 brick-and-mortar locations, and as those stores close down those abandoned buildings are going to be giant eyesores on street corners all over America.

Brookstone

When I was a kid back in the 1980s, it seemed like Brookstone had an outlet in every mall I visited. But now Brookstone has filed for bankruptcy, and all remaining mall stores will be shut down

Brookstone filed for bankruptcy and will close its remaining 101 mall stores.

The mall and airport seller, best known for massage chairs, quirky gadgets, and travel luggage, filed for Chapter 11 bankruptcy in federal court on Thursday. It was Brookstone’s second bankruptcy round in four years.

Sears

Sears has been shutting down stores for years, but up until now they have never admitted that bankruptcy was on the horizon.

But now time has run out and emergency measures are required if Sears is to survive. The following comes from CNN

Sears is running out of time to fix its problems, the CEO says.

Eddie Lampert, who controls most of the company’s shares through his hedge fund, told the board on Monday that it must address “significant near-term constraints” in its cash position.

Of course Sears is still not actually using the term “bankruptcy”, but even CNN is admitting that Eddie Lampert used “language that suggested the company could be forced out of business”

Lampert did not use the word “bankruptcy,” but he raised the possibility that creditors could be wiped out, a process that often takes place in bankruptcy court, without immediate action.

He also said it was in the best interest of stakeholders to “accomplish this as a going concern” — language that suggested the company could be forced out of business.

Those that have been following my work for a long time know that I have repeatedly stated that Sears is going to zero.

Now we appear to be on the precipice of that actually happening, and it is a very sad day for America indeed.

JCPenney

Speaking of retailers that are going to zero, JCPenney is absolutely drowning in debt and has a very dismal prognosis for the future

Leaderless, $4 billion in debt and with a stock price below $2, the besieged retailer faces an uncertain fate after posting its latest round of dismal earnings.

“They’re in a leaky boat that eventually will sink,” said Mark Cohen, the director of retail studies at the Columbia Business School and a former CEO of Sears Canada and other department stores. “The prognosis for the future is not happiness.”

In the end, JCPenney is not going to survive, and so America will have to shop elsewhere for substandard clothing at inflated prices.

Bed Bath & Beyond

Nobody is suggesting that bankruptcy is imminent for Bed Bath & Beyond, but if they continue to have disastrous sales results it won’t be too long before they are on the chopping block too…

The struggling retailer said Wednesday that it was bringing on two top management consulting firms to help it cut costs and improve its merchandise. CEO Steven Temares did not name the firms.

The housewares retailer needs help. Shares of Bed Bath & Beyond plunged nearly 25% Thursday to their lowest level since March 2000 because of awful sales during the previous quarter.

We are moving into the most critical time of the year for retailers. Most troubled chains will hang on through the next three months, but once we get to January and February we will see many of them give up the fight for good.

Meanwhile, some of the retailers that are still doing okay are warning that our trade war with China will likely mean much higher prices for consumers

Walmart Inc. and Target Corp. are among the large retailers and food companies that have sent a letter to U.S. Trade Ambassador Robert Lighthizer warning that proposed tariffs on $200 billion on Chinese goods would hurt consumers and American businesses.

Walmart’s letter, dated Sept. 6, focuses on what it says will be the repercussions of the tariffs, which would apply to goods like food and beverages, personal care products like shampoo, detergents, motor vehicles and paper goods like napkins.

Of course U.S. consumers cannot exactly afford higher prices at this point. U.S. consumers have been spending more than they are earning month after month, and they are making up the difference by going into ever-increasing amounts of debt.

This is not what a healthy economy looks like.

If we had a healthy economy, the middle class would be growing and retailers would be thriving.

But instead, the vacancy rate at U.S. shopping malls just hit the highest level in six years

The vacancy rate at metro and regional malls around the United States hit 8.6% last quarter, the highest since the end of 2012, according to data released Monday by real estate research firm Reis (REIS).

Back then, the economy was still working its way out of a recession and an excess of malls had been built in the preceding decades. Retail vacancies peaked at 9.4% during the middle of 2011.

Things are not getting better for the U.S. economy. We continue to see numbers that we have not seen since the last recession, and it appears that things will continue to deteriorate as we head into 2019.

About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

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America’s Rapidly Accelerating Retail Apocalypse Is Being Fueled By One Enormously Painful Economic Problem

We are in the midst of the worst retail apocalypse in American history, and it seems to be getting worse with each passing month. Many of the “experts” blame the growth of online retailers, and without a doubt online retail sales have been surging. In fact, I sell far more through Amazon.com than I do through any other channel. But the truth is that online retailers are not exactly taking over the world. At this point, 91 percent of all retail sales still take place in brick-and-mortar stores, and that means that online retailers only account for about 9 percent of all retail sales. Sadly, there is a much bigger reason why thousands of retail stores are closing down and millions upon millions of square feet of retail space is now sitting empty all over America. The mighty U.S. consumer base was once primarily made up of middle class Americans, but the middle class in America has been on a slow, steady death spiral for many years.

So now the experts tell us that retailers that cater to high income and low income Americans are thriving, and those that once did so well selling to the middle class are fading away

The middle is disappearing — low and middle-income customers increasingly shop at discounters and dollar stores, forcing retailers that once served these customers, like Bon-Ton and its subsidiary brands, to close shop,” analysts from intelligence firm Gartner L2 wrote in a recent report on department stores.

The slow decline of the middle class in America has had an impact on retailers that haven’t adapted to the change. Increasingly, the most successful businesses in the sector have become more distinctly split into two sections: luxury and budget stores.

When I was growing up, it seemed like almost everyone that I knew was “middle class”, and the mall was the place to go on the weekends.

But now shopping malls are dying all over the country. In fact, one brand new report says that shopping malls have not been this empty in the U.S. since we were coming out of the last recession

U.S. malls haven’t been this empty since 2012, when the retail industry was clawing its way back after the Great Recession, according to a new report from real estate research firm Reis.

The vacancy rate at regional and super regional malls reached 8.6 percent in the second quarter of 2018, based on a survey by Reis of 77 metropolitan areas across the country. That was up from 8.4 percent in the prior period, and a high not seen since the third quarter of 2012, when the vacancy rate was 8.7 percent.

If the U.S. economy really is in “good shape”, why is this happening?

And the numbers for “local shopping centers” are actually even worse

The vacancy rate last quarter, 10.2%, was higher than at malls in part because of hundreds of Toys “R” Us store closures.

Vacancies at local shopping centers increased in more than 70% of metro areas. Indianapolis, Dayton, and Wichita had the highest rates in the country.

If you didn’t know any better, you would be tempted to think that “Space Available” and “Going Out Of Business” were two of the hottest new retailers in the entire nation.

And the numbers that I just shared with you are actually quite understated. In one of his most recent articles, Wolf Richter explained why this is the case…

But these numbers are deceptive – because something counts as “vacant” only when the landlord tries to fill it with another retailer.

Stores that emptied out and became zombie stores in zombie malls, or the Toys ‘R’ Us stores in bad areas with zero hopes of finding another retail tenant, etc. – they’re not being counted as “vacant” retail space because they’re no longer being marketed as retail space, and the square footage of that retail space disappears from the vacant retail space stats.

That space may remain shuttered and vacant for years, with a fence around that is catching tumbleweeds, as lenders tussle over who gets what, if anything, until the land can hopefully be sold to a developer who might bulldoze the walls and build an apartment complex on it.

We have never been through anything like this in modern American history.

2017 was the worst year for retail store closings in the United States that we have ever seen. The number of retail stores that closed approximately tripled the number from 2016, and this year we are definitely on pace to shatter the record that we set last year.

And yet Americans continue to be exceedingly optimistic. A poll that was just released found that 55 percent of all Americans believe that our best days are still ahead of us.

Hopefully they are right, but in the short-term things are looking rather grim.

For example, just today we learned that Sears is shutting down even more stores

Sears Holdings, which owns both chains, said it informed employees Thursday that it would be shuttering nine Sears stores and one Kmart in late September. Liquidation is scheduled to begin as early as July 13, the company said in a statement.

With the additions, a total of 78 stores – 62 Sears and 16 Kmart locations – will close in September.

Of course Sears is not the only major retailer that is slowly liquidating. Many of the biggest names in the entire retail world have announced that they are closing at least 100 locations in 2018. The following comes from CNN

Six hundred Walgreens have closed this year, while Bon-Ton, Sears and Kmart, Best Buy, Signet Jewelers, Mattress Firm, and GNC have all closed 200 stores or more this year. Claire’s, Foot Locker, and The Children’s Place have closed 100 or more locations.

If we still had a strong middle class, this would not be happening.

Not too long ago, I shared with you some absolutely shocking numbers about the decline of the middle class, and I would like to share them with you again now…

#1 78 million Americans are participating in the “gig economy” because full-time jobs just don’t pay enough to make ends meet these days.

#2 In 2011, the average home price was 3.56 times the average yearly salary in the United States. But by the time 2017 was finished, the average home price was 4.73 times the average yearly salary in the United States.

#3 In 1980, the average American worker’s debt was 1.96 times larger than his or her monthly salary. Today, that number has ballooned to 5.00.

#4 In the United States today, 66 percent of all jobs pay less than 20 dollars an hour.

#5 102 million working age Americans do not have a job right now. That number is higher than it was at any point during the last recession.

#6 Earnings for low-skill jobs have stayed very flat for the last 40 years.

#7 Americans have been spending more money than they make for 28 months in a row.

#8 In the United States today, the average young adult with student loan debt has a negative net worth.

#9 At this point, the average American household is nearly $140,000 in debt.

#10 Poverty rates in U.S. suburbs “have increased by 50 percent since 1990”.

#11 Almost 51 million U.S. households “can’t afford basics like rent and food”.

#12 The bottom 40 percent of all U.S. households bring home just 11.4 percent of all income.

#13 According to the Federal Reserve, 4 out of 10 Americans do not have enough money to cover an unexpected $400 expense without borrowing the money or selling something they own.

#14 22 percent of all Americans cannot pay all of their bills in a typical month.

#15 Today, U.S. households are collectively 13.15 trillion dollars in debt. That is a new all-time record.

This is why so many U.S. retailers are failing.

The once mighty U.S. consumer base is being hollowed out because the middle class in America is being eviscerated.

Yes, the wealthy are doing quite well for the moment, but an increasing number of signs indicate that things are about to take a negative turn for them as well.

For instance, just consider the following example from CNBC

Manhattan real estate had its worst second quarter since the financial crisis, with prices and sales dropping and inventory rising, according to a new report.

Total sales in Manhattan fell 17 percent in the second quarter from a year ago, according a report from Douglas Elliman and Miller Samuel Real Estate Appraisers and Consultants.

If we don’t find a way to turn things around, what we have witnessed so far is just the beginning.

The middle class will continue to die, retailers all over the country will continue to go out of business, and shopping malls will continue to turn into ghost towns.

And once we plunge into another recession, all of the trends that I have been talking about in this article are going to start moving much more quickly. We truly are on the edge of disaster, and most Americans have absolutely no idea what is coming.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is the author of four books including The Beginning Of The End and Living A Life That Really Matters.

Would This Have Happened Under President Hillary? Holiday Retail Sales Soar Compare To Last Year

We are nearly a year into Donald Trump’s presidency, and the economic numbers continue to look quite good. On Monday, we learned that U.S. retail sales during the holiday season are projected to be way up compared to 2016. Yes, there are all sorts of economic red flags popping up all over the place, and I write about them regularly. And without a doubt, 2017 has been one of the worst years for brick and mortar retail stores in a very long time. But when something good happens we should acknowledge that too, and many are giving President Trump credit for the fact that retail sales are projected to be up 4.9 percent this holiday season compared to last year…

Despite thousands of store closings this year, Americans supplied a final flurry of spending to give retailers their best holiday season sales since 2011, figures released Tuesday show.

U.S. year-end holiday retail sales rose 4.9% compared to the same period last year, a welcome gift to U.S. retailers amid new signs of consumer confidence.

Of course this doesn’t mean that things have completely turned around for the retail industry. We still absolutely shattered the all-time record for store closings in a single year, and the final number is going to be somewhere right around 7,000. The following comes from CNBC

A larger-than-average slew of retail bankruptcies and stores being shuttered rocked the industry this year, making headlines and dragging even some of the better-performing companies such as Home Depot, TJ Maxx and Costco down with the dismal news.

So far in 2017, 6,985 store closure announcements have been made, according to a tracker from FGRT (formerly Fung Global Retail & Technology). That’s up more than 200 percent from a year ago, based on the firm’s findings.

More specifically, the number of store closings is up 229 percent compared to last year.

So yes, we are still very much in the midst of a “retail apocalypse”.

And actually, earlier this month we got news that Toys R US has filed for bankruptcy protection and could soon close as many as 200 stores

It’s hardly fun and games for the toy industry this holiday season with the bankruptcy of Toys ‘R’ Us hurting the fortunes of toymakers Mattel (MAT) and Hasbro (HAS). The sector’s prospects aren’t expected to improve anytime soon.

Toys ‘R’ Us, which filed for bankruptcy in September, is now said to be considering closing as many as 200 U.S. stores, roughly 21 percent of its brick-and-mortar locations, because of lackluster sales.

The fact that retail sales are up so much during this holiday season may slow the retail apocalypse, but it certainly will not end it.

We have got so much work to do to turn the economy around, but at least we have taken a few small steps in the right direction. The recent tax bill that Congress passed was one of those small steps, but there is still so, so much more that needs to be accomplished.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

We Have Tripled The Number Of Store Closings From Last Year, And 20 Major Retailers Have Closed At Least 50 Stores In 2017

Did you know that the number of retail store closings in 2017 has already tripled the number from all of 2016? Last year, a total of 2,056 store locations were closed down, but this year more than 6,700 stores have been shut down so far. That absolutely shatters the all-time record for store closings in a single year, and yet nobody seems that concerned about it. In 2008, an all-time record 6,163 retail stores were shuttered, and we have already surpassed that mark by a very wide margin. We are facing an unprecedented retail apocalypse, and as you will see below, the number of retail store closings is actually supposed to be much higher next year.

Whenever the mainstream media reports on the retail apocalypse, they always try to put a positive spin on the story by blaming the growth of Amazon and other online retailers. And without a doubt that has had an impact, but at this point online shopping still accounts for less than 10 percent of total U.S. retail sales.

Look, Amazon didn’t just show up to the party. They have been around for many, many years and while it is true that they are growing, they still only account for a very small sliver of the overall retail pie.

So those that would like to explain away this retail apocalypse need to come up with a better explanation.

As I noted in the headline, there are 20 different major retail chains that have closed at least 50 stores so far this year. The following numbers originally come from Fox Business

1. Abercrombie & Fitch: 60 stores
2. Aerosoles: 88 stores
3. American Apparel: 110 stores
4. BCBG: 118 stores
5. Bebe: 168 stores
6. The Children’s Place: hundreds of stores to be closed by 2020
7. CVS: 70 stores
8. Guess: 60 stores
9. Gymboree: 350 stores
10. HHgregg: 220 stores
11. J.Crew: 50 stores
12. JC Penney: 138 stores
13. The Limited: 250 stores
14. Macy’s: 68 stores
15. Michael Kors: 125 stores
16. Payless: 800 stores
17. RadioShack: more than 1,000 stores
18. Rue21: up to 400 stores
19. Sears/Kmart: more than 300 stores
20. Wet Seal: 171 stores

If the U.S. economy was really doing well, then why are all of these major retailers closing down locations?

Of course the truth is that the economy is not doing well. The U.S. economy has not grown by at least 3 percent in a single year since the middle of the Bush administration, and it isn’t going to happen this year either. Overall, the U.S. economy has grown by an average of just 1.33 percent over the last 10 years, and meanwhile U.S. stock prices are up about 250 percent since the end of the last recession. The stock market has become completely and utterly disconnected from economic reality, and yet many Americans still believe that it is an accurate barometer for the health of the economy.

I used to do a Black Friday article every year, but I have ended that tradition. Yes, there were still a few scuffles this year, but at this point the much bigger story is how poorly the retailers are doing.

So far this year, more than 300 retailers have filed for bankruptcy, and we are currently on pace to lose over 147 million square feet of retail space by the end of 2017.

Those are absolutely catastrophic numbers.

And some analysts are already predicting that as many as 9,000 stores could be shut down in the United States in 2018.

Are we just going to keep blaming Amazon every time another retail chain goes belly up?

What we should really be focusing on is the fact that the “retail bubble” is starting to burst. In the aftermath of the last financial crisis, retailers went on an unprecedented debt binge, and now a lot of that debt is starting to go bad.

In fact, in a previous article I discussed the fact that “the amount of high-yield retail debt that will mature next year is approximately 19 times larger than the amount that matured this year”. This is going to have very serious implications on Wall Street, but very few people are really talking about this.

Most stores try to stay open through Christmas, but once the holiday season is over we will see another huge wave of store closings.

And as individual stores close down, this will put a lot of financial pressure on malls and shopping centers. Not too long ago, one report projected that up to 25 percent of all shopping malls in the entire nation could close down by 2022, but I tend to think that number is too optimistic.

The retail industry in the United States is dying, and the biggest reason for that is not Amazon.

Rather, the real reason why the retail industry is in so much trouble is because of the steady decline of the middle class. The gap between the ultra-wealthy and the rest of us is greater than ever, and we can clearly see the impact of this in the retail world.

Retailers that serve the very wealthy are generally doing well, and those that serve the other end of the food chain (such as dollar stores and Wal-Mart) are also doing okay.

But virtually all of the retailers that depend on middle class shoppers are really struggling, and this is going to continue for the foreseeable future.

Most American families are either living paycheck to paycheck or are close to that level, and these days U.S. consumers simply do not have much discretionary income to play around with. More hard working Americans are going to fall out of the middle class with each passing month, and that is extremely bad news for a retail industry that is literally falling apart right in front of our eyes.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

As America Gives Thanks, Homelessness Continues To Set New Records In Major Cities All Over The Nation

If the economy is doing just fine, then why is homelessness at levels not seen “since the Great Depression” in major cities all over the country? If the U.S. economy was actually in good shape, we would expect that the number of people that are homeless would be going down or at least stabilizing. Instead, we have a growing national crisis on our hands. In fact, within the past two years “at least 10 cities or municipal regions in California, Oregon and Washington” have declared a state of emergency because the number of homeless is growing so rapidly.

Things are particularly bad in southern California, and this year the Midnight Mission will literally be feeding a small army of people that have nowhere to sleep at night…

Thanksgiving meals will be served to thousands of homeless and near-homeless individuals today on Skid Row and in Pasadena and Canoga Park amid calls for donations and volunteers for the rest of the year.

The Midnight Mission will serve Thanksgiving brunch to nearly 2,500 homeless and near-homeless men, women and children, according to Georgia Berkovich, its director of public affairs.

Overall, the Midnight Mission serves more than a million meals a year, and Berkovich says that homelessness hasn’t been this bad in southern California “since the Great Depression”

Berkovich said the group has been serving nearly 1 million meals a year each year since 2013.

“We haven’t seen numbers like this since the Great Depression,” she said.

And of course the official numbers confirm what Berkovich is claiming. According to an article published earlier this year, the number of homeless people living in Los Angeles County has never been higher…

The number of homeless people in Los Angeles has jumped to a new record, as city officials grapple with a humanitarian crisis of proportions remarkable for a modern American metropolis.

Municipal leaders said that a recent count over several nights found 55,188 homeless people living in a survey region comprising most of Los Angeles County, up more than 25% from last year.

If the California economy is truly doing well, then why is this happening?

We see the same thing happening when we look at the east coast. Just check out these numbers from New York City

In recent years the number of homeless people has grown. Whereas rents increased by 18% between 2005 and 2015, incomes rose by 5%. When Rudy Giuliani entered City Hall in 1994, 24,000 people lived in shelters. About 31,000 lived in them when Mike Bloomberg became mayor in 2002. When Bill de Blasio entered City Hall in 2014, 51,500 did. The number of homeless people now in shelters is around 63,000.

For New York, this is the highest that the homeless population has been since the Great Depression, and city leaders are trying to come up with a solution.

Meanwhile, things are so bad in Seattle that “400 unauthorized tent camps” have popped up…

Housing prices are soaring here thanks to the tech industry, but the boom comes with a consequence: A surge in homelessness marked by 400 unauthorized tent camps in parks, under bridges, on freeway medians and along busy sidewalks. The liberal city is trying to figure out what to do.

Are you noticing a theme?

Homelessness is at epidemic levels all over the U.S., and this crisis is getting worse with each passing day. Some communities are trying to care for their growing homeless populations, but others are simply trying to force them to go somewhere else. They are doing this by essentially making it illegal to be homeless. In some cities it is now a crime to engage in “public camping”, to “block a walkway” or to create any sort of “temporary structure for human habitation”. These laws specifically target the homeless, and they are very cruel.

Many of us tend to picture the homeless as mostly lazy older men that don’t want to work and that instead want to drink or do drugs all day.

But the truth is that women and children make up a significant percentage of the homeless. In fact, the number of homeless children in our country has increased by about 60 percent since the end of the last recession.

And there are thousands upon thousands of military veterans that are homeless. For example, a 34-year-old man named Johnny that served in the Marine Corps recently used his last 20 dollars to buy fuel for a woman that had run out of gas and was stranded along I-95 in Miami

Pulled over on the side of I-95, McClure, 27, was approached by a homeless man named Johnny. She was apprehensive at first, but Johnny told her to get back into her car and to lock the doors while he walked to get her help. He went to a nearby gas station, used his last $20 fill a can and brought it back to fill up her car.

Grateful, but without a dollar to repay him, McClure promised she would come back with something.

In the weeks since, she’s returned to the spot along I-95 where Johnny stays with cash, snacks and Wawa gift cards. Each time she’s stopped by with her boyfriend, Mark D’Amico, they’ve learned a bit more about Johnny’s story, and become humbled by his gratitude.

Deciding that they wanted to do even more for Johnny, they started a GoFundMe page for him and have since raised approximately $250,000.

So it looks like there is going to be a happy ending to Johnny’s story, but the truth is that more people are falling into homelessness with each passing day.

If things are this bad now, how much worse will they become as the economy really starts slowing down? Already, we have shattered the all-time yearly record for retail store closings, and we still have more than a month to go. The following is from a CNN article entitled “Is This The Last Black Friday?”

A record number of store closures — 6,735 — have already been announced this year. That’s more than triple the tally for 2016, according to Fung Global Retail and Technology, a retail think tank.

And there have been 620 bankruptcies in the sector so far this year, according to BankruptcyData.com, up 31% from the same period last year. Prominent names such as Toys R Us, Gymboree, Payless Shoes and RadioShack have all filed this year, and Sears Holdings (SHLD), which owns both the iconic Sears and Kmart chains, has warned there is “substantial doubt” it can remain in business.

Sadly, analysts are projecting that the number of store closings could be as high as 9,000 next year.

Yes, there are some areas of the country that are doing well right now, but there are many others that are not.

Let us always remember to have compassion on those that are struggling, because someday we may be the ones that end up needing some help.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

Why America’s Retail Apocalypse Could Accelerate Even More In 2018

Is the retail apocalypse in the United States about to go to a whole new level? That is a frightening thing to consider, because the truth is that things are already quite bad. We have already shattered the all-time record for store closings in a single year and we still have the rest of November and December to go. Unfortunately, it truly does appear that things will get even worse in 2018, because a tremendous amount of high-yield retail debt is coming due next year. In fact, Bloomberg is reporting that the amount of high-yield retail debt that will mature next year is approximately 19 times larger than the amount that matured this year…

Just $100 million of high-yield retail borrowings were set to mature this year, but that will increase to $1.9 billion in 2018, according to Fitch Ratings Inc. And from 2019 to 2025, it will balloon to an annual average of almost $5 billion. The amount of retail debt considered risky is also rising. Over the past year, high-yield bonds outstanding gained 20 percent, to $35 billion, and the industry’s leveraged loans are up 15 percent, to $152 billion, according to Bloomberg data.

Even worse, this will hit as a record $1 trillion in high-yield debt for all industries comes due over the next five years, according to Moody’s.

Can you say “debt bomb”?

For those of you that are not familiar with these concepts, high-yield debt is considered to be the riskiest form of debt. Retailers all over the nation went on a tremendous debt binge for years, and many of those loans never should have been made. Now that debt is going to start to come due, and many of these retailers simply will not be able to pay.

So how does that concern the rest of us?

Well, just like with the subprime mortgage meltdown, the “spillover” could potentially be enormous. Here is more from Bloomberg

The debt coming due, along with America’s over-stored suburbs and the continued gains of online shopping, has all the makings of a disaster. The spillover will likely flow far and wide across the U.S. economy. There will be displaced low-income workers, shrinking local tax bases and investor losses on stocks, bonds and real estate. If today is considered a retail apocalypse, then what’s coming next could truly be scary.

I have written extensively about Sears and other troubled retailers that definitely appear to be headed for zero. But one major retailer that is flying below the radar a little bit that you should keep an eye on is Target. For over a year, conservatives have been boycotting the retailer, and this boycott is really starting to take a toll

Target has been desperately grasping at ideas to recover lost business, including remodeling existing stores and opening smaller stores, lowering prices, hiring more holiday staff and introducing a new home line from Chip and Joanna Gaines. But Target stock remains relatively stagnant, opening at 61.50 today—certainly nowhere near the mid-80s of April 2016, when the AFA boycott began.

In the past, retailers could always count on the middle class to bail them out, but the middle class is steadily shrinking these days. In fact, at this point one out of every five U.S. households has a net worth of zero or less.

And we must also keep in mind that we do not actually deserve the debt-fueled standard of living that we are currently enjoying. We are consuming far more wealth than we are producing, and the only way we are able to do that is by going into unprecedented amounts of debt. The following comes from Egon von Greyerz

Total US debt in 1913 was $39 billion. Today it is $70 trillion, up 1,800X. But that only tells part of the story. There were virtually no unfunded liabilities in 1913. Today they are $130 trillion. So adding the $70 trillion debt to the unfunded liabilities gives a total liability of $200 trillion.

In 1913 US debt to GDP was 150%. Today, including unfunded liabilities, the figure becomes almost 1,000%. This is the burden that ordinary Americans are responsible for, a burden that will break the US people and the US economy as well as the dollar.

The only possible way that the game can go on is to continue to grow our debt much faster than the overall economy is growing.

Of course that is completely unsustainable, and when this debt bubble finally bursts everything is going to collapse.

We don’t know exactly when the next great financial crisis is coming, but we do know that conditions are absolutely perfect for one to erupt. According to John Hussman, it wouldn’t be a surprise at all to see stock prices fall more than 60 percent from current levels…

At the root of Hussman’s pessimistic market view are stock valuations that look historically stretched by a handful of measures. According to his preferred valuation metric — the ratio of non-financial market cap to corporate gross value-added (Market Cap/GVA) — stocks are more expensive than they were in 1929 and 2000, periods that immediately preceded major market selloffs.

“US equity market valuations at the most offensive levels in history,” he wrote in his November monthly note. “We expect that more extreme valuations will only be met by more severe losses.”

Those losses won’t just include the 63% plunge referenced above — it’ll also be accompanied by a longer 10 to 12 year period over which the S&P 500 will fall, says Hussman.

A financial system that is based on a pyramid of debt will never be sustainable. As I discuss in my new book entitled “Living A Life That Really Matters”, the design of our current debt-based system is fundamentally flawed, and it needs to be rebuilt from the ground up.

The borrower is the servant of the lender, and our current system is designed to create as much debt as possible. When it inevitably fails, we need to be ready to offer an alternative, because patching together our current system and trying to re-inflate the bubble is not a real solution.

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

2017 Is Going To Be The Worst Retail Apocalypse In U.S. History – More Than 300 Retailers Have Already Filed For Bankruptcy

Not even during the worst parts of the last recession did things ever get this bad for the U.S. retail industry. As you will see in this article, more than 300 retailers have already filed for bankruptcy in 2017, and it is being projected that a staggering 8,640 stores will close in America by the end of this calendar year. That would shatter the old record by more than 20 percent. Sadly, our ongoing retail apocalypse appears to only be in the early chapters. One report recently estimated that up to 25 percent of all shopping malls in the country could shut down by 2022 due to the current woes of the retail industry. And if the new financial crisis that is already hitting Europe starts spreading over here, the numbers that I just shared with you could ultimately turn out to be a whole lot worse.

I knew that a lot of retailers were filing for bankruptcy, but I had no idea that the grand total for this year was already in the hundreds. According to CNN, the number of retail bankruptcies is now up 31 percent compared to the same time period last year…

Bankruptcies continue to pile up in the retail industry.

More than 300 retailers have filed for bankruptcy so far this year, according to data from BankruptcyData.com. That’s up 31% from the same time last year. Most of those filings were for small companies — the proverbial Mom & Pop store with a single location. But there are also plenty of household names on the list.

Yes, the growth of online retailers such as Amazon is fueling some of this, but the Internet has been around for several decades now.

So why are retail store closings and retail bankruptcies surging so dramatically all of a sudden?

Just a few days ago, another major victim of the retail apocalypse made headlines all over the nation when it filed for bankruptcy. At one time Gymboree was absolutely thriving, but now it is in a desperate fight to survive

Children’s clothing chain Gymboree has filed for bankruptcy protection, aiming to slash its debts and close hundreds of stores amid crushing pressure on retailers.

Gymboree said it plans to remain in business but will close 375 to 450 of its 1,281 stores in filing for a Chapter 11 bankruptcy reorganization. Gymboree employs more than 11,000 people, including 10,500 hourly workers.

And in recent weeks other major retailers that were once very prosperous have also been forced to close stores and lay off staff

This hemorrhaging of retail jobs comes on the heels of last week’s mass layoffs at Hudson Bay Company, where employees from Saks Fifth Avenue and Lord & Taylor were among the 2,000 people laid off. The news of HBC layoffs came on the same day that Ascena, the parent company of brands like Ann Taylor, Lane Bryant, and Dress Barn, told investors it will be closing up to 650 stores (although it did not specify which brands will be affected just yet). Only two weeks ago, affordable luxury brand Michael Kors announced it too would close 125 stores to combat brand overexposure and plummeting sales.

In a lot of ways this reminds me of 2007. The stock market was still performing very well, but the real economy was starting to come apart at the seams.

And without a doubt, the real economy is really hurting right now. According to Business Insider, Moody’s is warning that 22 more major retailers may be forced to declare bankruptcy in the very near future…

Twenty-two retailers in Moody’s portfolio are in serious financial trouble that could lead to bankruptcy, according to a Moody’s note published on Wednesday. That’s 16% of the 148 companies in the financial firm’s retail group — eclipsing the level of seriously distressed retail companies that Moody’s reported during the Great Recession.

You can find the full list right here. If this many major retailers are “distressed” now, what are things going to look like once the financial markets start crashing?

As thousands of stores close down all across the United States, this is going to put an incredible amount of stress on shopping mall owners. In order to meet their financial obligations, those mall owners need tenants, but now the number of potential tenants is shrinking rapidly.

I have talked about dead malls before, but apparently what we have seen so far is nothing compared to what is coming. The following comes from CNN

Store closings and even dead malls are nothing new, but things might be about to get a whole lot worse.

Between 20% and 25% of American malls will close within five years, according to a new report out this week from Credit Suisse. That kind of plunge would be unprecedented in the nation’s history.

I can’t even imagine what this country is going to look like if a quarter of our shopping malls shut down within the next five years. Already, there are some parts of the U.S. that look like a third world nation.

And what is this going to do to employment? Today, the retail industry employs millions upon millions of Americans, and those jobs could start disappearing very rapidly

The retail sales associate is one of the most popular jobs in the country, with roughly 4.5 million Americans filling the occupation. In May, the US Bureau of Labor Statistics released data that found that 7.5 million retail jobs might be replaced by technology. The World Economic Forum predicts 30 to 50 percent of retail jobs will be gone once struggling companies like Gymboree fully hop on the digital train. MarketWatch found that over the last year, the department store space bled 29,900 jobs, while general merchandising stores cut 15,700 positions. At this rate, one Florida columnist put it soberingly, “Half of all US retail jobs could vanish. Just as ATMs replaced many bank tellers, automated check-out stations are supplanting retail clerks.”

At this moment, the number of working age Americans that do not have a job is hovering near a record high. So being able to at least get a job in the retail industry has been a real lifeline for many Americans, and now that lifeline may be in grave danger.

For those running our big corporations, losing these kinds of jobs is not a big deal. In fact, many corporate executives would be quite happy to replace all of their U.S. employees with technology or with foreign workers.

But if the middle class is going to survive, we need an economy that produces good paying jobs. Unfortunately, even poor paying retail jobs are starting to disappear now, and the future of the middle class is looking bleaker than it ever has before.

(Originally published on The Economic Collapse Blog)

The Worst Retail Cataclysm Ever: Sears Warns It Is On The Verge Of Collapse As Payless Prepares To File For Bankruptcy

More than 3,500 retail stores are going to close all across America over the next few months as the worst retail downturn in U.S. history gets even deeper. Earlier this week, Sears shocked the world when it announced that there is “substantial doubt” that the company will be able to “continue as a going concern” much longer. In other words, Sears has announced that it is on the verge of imminent collapse. Meanwhile, Payless stunned the retail industry when it came out that they are preparing to file for bankruptcy. The “retail apocalypse” that I have been warning about is greatly accelerating, and many believe that this is one of the early warning signs that the economic collapse that is already going on in other parts of the globe will soon reach U.S. shores.

I have repeatedly warned my readers that “Sears is going to zero“, and now Sears is officially saying that it might actually happen. When you file official paperwork with the government that says there is “substantial doubt” that the company will survive, that means that the end is very near

The company that operates Sears, the department store chain that dominated retail for decades, warned Tuesday that it faces “substantial doubt” about its ability to stay in business unless it can borrow more and tap cash from more of its assets.

“Our historical operating results indicate substantial doubt exists related to the company’s ability to continue as a going concern,” Sears Holdings said in a filing with the Securities and Exchange Commission. Sears Holdings operates both Sears and Kmart stores.

In the wake of that statement, the price of Sears stock dipped 13.69% to $7.85 a share.

Personally, I am going to miss Sears very much. But of course the truth is that they simply cannot continue operating as they have been.

For the quarter that ended on January 28th, Sears lost an astounding 607 million dollars

The company said it lost $607 million, or $5.67 per diluted share, during the quarter that ended on Jan. 28. That compared with a loss of $580 million, or $5.44 per diluted share, a year earlier. It has posted a loss in all but two of the last 24 quarters, according to S&P Global Market Intelligence.

How in the world is it possible for a retailer to lose that amount of money in just three months?

As I have said before, if they had employees flushing dollar bills down the toilet 24 hours a day they still shouldn’t have losses that big.

This week we also learned that Payless is heading for bankruptcy. According to Bloomberg, the chain is planning to imminently close at least 400 stores…

Payless Inc., the struggling discount shoe chain, is preparing to file for bankruptcy as soon as next week, according to people familiar with the matter.

The company is initially planning to close 400 to 500 stores as it reorganizes operations, said the people, who asked not to be identified because the deliberations aren’t public. Payless had originally looked to shutter as many as 1,000 locations, and the number may still be in flux, according to one of the people.

Of course these are just two examples of a much broader phenomenon.

Never before in U.S. history have we seen such a dramatic wave of store closures. According to Business Insider, over 3,500 retail locations “are expected to close in the next couple of months”…

Thousands of mall-based stores are shutting down in what’s fast becoming one of the biggest waves of retail closures in decades.

More than 3,500 stores are expected to close in the next couple of months.

Once thriving shopping malls are rapidly being transformed into ghost towns. As I wrote about just recently, “you might be tempted to think that ‘Space Available’ was the hottest new retail chain in the entire country.”

The demise of Sears is going to be an absolute nightmare for many mall owners. Once “anchor stores” start closing, it is usually only a matter of time before smaller stores start bailing out

When an anchor store like Sears or Macy’s closes, it often triggers a downward spiral in performance for shopping malls.

Not only do the malls lose the income and shopper traffic from that store’s business, but the closure often triggers “co-tenancy clauses” that allow the other mall tenants to terminate their leases or renegotiate the terms, typically with a period of lower rents, until another retailer moves into the anchor space.

Years ago I wrote of a time when we would see boarded-up storefronts all across America, and now it is happening.

Instead of asking which retailers are going to close, perhaps we should be asking which ones are going to survive this retail cataclysm.

In the past, you could always count on middle class U.S. consumers to save the day, but today the middle class is steadily shrinking and U.S. consumers are increasingly tapped out.

For instance, just look at what is happening to delinquency rates on auto loans

US auto loan and lease credit loss rates weakened in the second half of 2016, according to a new report from Fitch Ratings, which said they will continue to deteriorate.

“Subprime credit losses are accelerating faster than the prime segment, and this trend is likely to continue as a result of looser underwriting standards by lenders in recent years,” said Michael Taiano, a director at Fitch.

The last time so many Americans got behind on subprime auto loans was during the last financial crisis.

We are seeing so many similarities to what happened just prior to the last recession, and yet most Americans still seem to think that the U.S. economy is going to be just fine in 2017.

Unfortunately, major red flags are popping up in the hard economic numbers and in the financial markets.

The last recession probably should have started back in late 2015, but thanks to manipulation by the Fed and an unprecedented debt binge by the Obama administration, official U.S. GDP growth has been able to stay barely above zero for the last year and a half.

But just because something is delayed does not mean that it is canceled.

All along, our long-term economic imbalances have continued to get even worse, and a date with destiny is rapidly approaching for the U.S. economy.

(Originally published on The Economic Collapse Blog)

A Third Of All U.S. Shopping Malls Are Projected To Close As ‘Space Available’ Signs Go Up All Over America

If you didn’t know better, you might be tempted to think that “Space Available” was the hottest new retail chain in the entire country. As you will see below, it is being projected that about a third of all shopping malls in the United States will soon close, and we just recently learned that the number of “distressed retailers” is the highest that it has been since the last recession. Honestly, I don’t know how anyone can possibly believe that the U.S. economy is in “good shape” after looking at the retail industry. In my recent article about the ongoing “retail apocalypse“, I discussed the fact that Sears, J.C. Penney and Macy’s have all announced that they are closing dozens of stores in 2017, and you can find a pretty comprehensive list of 19 U.S. retailers that are “on the brink of bankruptcy” right here. Needless to say, quite a bloodbath is going on out there right now.

But I didn’t realize how truly horrific things were for the retail industry until I came across an article about mall closings on Time Magazine’s website

About one-third of malls in the U.S. will shut their doors in the coming years, retail analyst Jan Kniffen told CNBC Thursday. His prediction comes in the wake of Macy’s reporting its worst consecutive same-store sales decline since the financial crisis.

Macy’s and its fellow retailers in American malls are challenged by an oversupply of retail space as customers migrate toward online shopping, as well as fast fashion retailers like H&M and off-price stores such as T.J. Maxx. As a result, about 400 of the country’s 1,100 enclosed malls will fail in the upcoming years. Of those that remain, he predicts that about 250 will thrive and the rest will continue to struggle.

Can you imagine what this country is going to look like if that actually happens?

Shopping malls all over the United States are literally becoming “ghost towns”, and many that have already closed have stayed empty for years and years.

The process usually starts when a shopping mall starts losing anchor stores. That is why it is so alarming that Sears, J.C. Penney and Macy’s are planning to shut down so many locations in 2017. According to one recent report, 310 shopping malls in America are in imminent danger of losing an anchor store

Dozens of malls have closed in the last 10 years, and many more are at risk of shutting down as retailers like Macy’s, JCPenney, and Sears — also known as anchor stores — shutter hundreds of stores to staunch the bleeding from falling sales.

The commercial-real-estate firm CoStar estimates that nearly a quarter of malls in the US, or roughly 310 of the nation’s 1,300 shopping malls, are at high risk of losing an anchor store.

Once the anchor stores start going, traffic falls off dramatically for the other stores and they start leaving too.

Four years ago in “The Beginning Of The End” I warned that empty storefronts would soon litter the national landscape, and now that is precisely what is happening.

Now that the Christmas season is over, some retailers that have been around for decades have suddenly decided that it is time to file for bankruptcy. Sadly, one of those retailers is HHGregg

HHGregg Inc., the 61-year-old seller of appliances and electronics, is moving closer to Chapter 11 after announcing a store-closing plan, according to people with knowledge of the matter.

The filing may come as soon as next week, said the people, who asked not to be identified because the matter isn’t public. Bloomberg previously reported that HHGregg might file for bankruptcy in March if it couldn’t reach an out-of-court solution.

Another retailer that was once riding high but is now dealing with bankruptcy is BCBG

BCBG, the California-based fashion retailer that had acquired fashion design firm Herve Leger in 1998, and that once had more than 570 boutiques globally, including 175 in the US, and whose cocktail dresses and handbags were shown off by celebrities, filed for bankruptcy on Wednesday.

It is buckling under $459 million of debt. It has 4,800 employees. Layoffs have already started. More layoffs and other cost cuts are planned, according to court documents, cited by Bloomberg. It started closing 120 of its stores in January. It wants to sell itself at a court-supervised auction. If that fails, it wants to negotiate a debt-for-equity swap with junior lenders owed $289 million.

If the U.S. economy was actually doing as well as the stock market says that it should be doing, all of these retail chains would not be closing stores and going bankrupt.

But of course the truth is that the stock market has become completely disconnected from economic reality.

We live at a time when middle class consumers are tapped out. According to one recent survey, 57 percent of all Americans do not even have enough money in the bank to write a $500 check for an unexpected expense.

And people are falling out of the middle class at a staggering pace. The number of homeless people in New York City recently set a brand new record high, and city authorities plan to construct 90 new homeless shelters within the next five years.

On the west coast we are also seeing a dramatic rise in homelessness. The following comes from an article by Dan Lyman

Citizen journalists have captured stunning images and video of homeless encampments that are spiraling out of control in the shadows of Disneyland and Anaheim Stadium in California.

The tent city has recently sprung up along the Santa Ana riverbed, near a busy convergence of three major California highways known as the “Orange Crush,” at the border of Anaheim and Santa Ana, the latter a “sanctuary city.”

Homeless activists estimate that as many as 1,000 people are camped in the region.

You can see some video footage of this homeless encampment on YouTube right here

Incredibly, the Federal Reserve is almost certainly going to raise interest rates at their next meeting even though the U.S. economy is faltering so badly. That only makes sense if they are trying to make Donald Trump look as bad as possible.

Even though this giant bubble of false economic stability that we are currently enjoying has lasted far longer than it should have, the truth is that nothing has changed about the long-term economic outlook at all.

America is still heading for “economic Armageddon”, and the retail industry is a huge red flag that is warning us that our day of reckoning is approaching more rapidly than many had anticipated.

(Originally published on The Economic Collapse Blog)

Retail Apocalypse Gains Momentum As David Stockman Warns ‘Everything Will Grind To A Halt’ After March 15th

J.C. Penney and Family Christian Stores are the latest retail giants to announce widespread store closings. As you will see below, J.C. Penney plans to close between 130 and 140 stores, and Family Christian is closing all of their 240 stores. In recent months the stock market has been absolutely soaring, and so most people have simply assumed that the “real economy” must be doing well. But that is not the case at all. In fact, the retail apocalypse that I have been documenting for quite some time appears to be gaining momentum.

J.C. Penney is not in as rough shape as Sears is just yet, but it is definitely on a similar trajectory. In the end, they are both headed for bankruptcy. That is why it wasn’t too much of a surprise when J.C. Penney announced that they are getting rid of about 6,000 workers and closing at least 130 stores

J.C. Penney (JCP) plans to close 130 to 140 stores and offer buyouts to 6,000 workers as the department-store industry sags in competition with online sellers and nimble niche retailers.

The company said Friday that it would shutter 13% to 14% of its locations and introduce new goods and services aimed at the shifting preferences of its customer base.

Meanwhile, many observers were quite surprised when Family Christian Stores decided to fold up shop for good. They were known as the largest Christian retailer on the entire planet, but now after 85 years they are going out of business forever

Family Christian, which bills itself as the “world’s largest retailer of Christian-themed merchandise,” announced Thursday it is closing after 85 years.

The non-profit company, employing more than 3,000 people in 240 stores in 36 states, said in a brief statement that the retailer had been facing declining sales since filing for bankruptcy protection in 2015 and had no choice but to shut down.

These two announcements are part of larger trend that we have been witnessing all over the country. As I have documented previously, Macy’s announced that it would be closing 100 stores earlier this year, and about the same time Sears said that it would be closing another 150 stores.

Back in 2010, Sears had a staggering 3,555 stores.

Before their recent announcement, Sears was down to 1,503 stores, and now this latest round of cuts will leave them with somewhere around 1,350.

Of course it won’t be too long before Sears has zero stores, and my regular readers know that I have been talking about the demise of Sears for a very long time.

The cold, hard truth of the matter is that the “real economy” is a total mess, and that is one of the primary reasons why these ridiculous stock market valuations that we are seeing right now are not sustainable.

One expert that agrees with my assessment is former Reagan Administration White House Budget Director David Stockman. In a recent interview, he explained why he believes that “everything will grind to a halt” after March 15th…

Stockman, who wrote a book titled “Trumped” predicting a Trump victory in 2016, says, “I don’t think there is a snowball’s chance in the hot place that’s going to happen. This is delusional. This is the greatest suckers’ rally of all time. It is based on pure hopium and not any analysis at all as what it will take to push through a big tax cut. Donald Trump is in a trap. Today the debt is $20 trillion. It’s 106% of GDP. . . .Trump is inheriting a built-in deficit of $10 trillion over the next decade under current policies that are built in. Yet, he wants more defense spending, not less. He wants drastic sweeping tax cuts for corporations and individuals. He wants to spend more money on border security and law enforcement. He’s going to do more for the veterans. He wants this big trillion dollar infrastructure program. You put all that together and it’s madness. It doesn’t even begin to add up, and it won’t happen when you are struggling with the $10 trillion of debt that’s coming down the pike and the $20 trillion that’s already on the books.”

Then, Stockman drops this bomb and says:

“I think what people are missing is this date, March 15th 2017. That’s the day that this debt ceiling holiday that Obama and Boehner put together right before the last election in October of 2015. That holiday expires. The debt ceiling will freeze in at $20 trillion. It will then be law. It will be a hard stop. The Treasury will have roughly $200 billion in cash. We are burning cash at a $75 billion a month rate. By summer, they will be out of cash. Then we will be in the mother of all debt ceiling crises. Everything will grind to a halt. I think we will have a government shutdown. There will not be Obama Care repeal and replace. There will be no tax cut. There will be no infrastructure stimulus. There will be just one giant fiscal bloodbath over a debt ceiling that has to be increased and no one wants to vote for.”

In that same interview, Stockman also predicted that “markets will easily correct by 20% and probably a lot more“, and he noted the glaring disconnect between current stock prices and how the U.S. economy is actually performing

“The S&P 500 has been trading at 26 times earnings while earnings have been dropping for the past six or seven quarters. There is no booming recovery coming. There is going to be a recession and there will be no stimulus baton to bail it out. That is the new fact that neither Trump nor the Wall Street gamblers remotely understand.”

It is very difficult to argue with Stockman on this.

There are some people out there that seem to think that Donald Trump can miraculously turn the U.S. economy around just because he is Donald Trump.

It doesn’t work that way.

We are 20 trillion dollars in debt, and we are currently adding about a trillion dollars a year to that total. There is no possible way that Trump can cut taxes, increase military spending, build a border wall, spend much more on veterans and spend an extra trillion dollars on rebuilding our crumbling infrastructure.

We are flat broke as a nation and there simply is not money available to do everything that Donald Trump wants to do.

So we shall see what happens after March 15th. Unfortunately, I happen to agree with Stockman that economic reality is about to come knocking and Trump and his supporters are about to get a very rude wake up call.

(Originally published on The Economic Collapse Blog)

It’s A Retail Apocalypse: Sears, Macy’s And The Limited Are All Closing Stores

retail-apocalypse-public-domain

It has only been two weeks since Christmas, and already we are witnessing a stunning bloodbath of store closings. Macy’s shocked the retail industry by announcing that they will be closing about 100 stores. The downward spiral of Sears hit another landmark when it was announced that another 150 Sears and Kmart stores would be shutting down. And we have just learned that The Limited is immediately closing all stores nationwide. If the U.S. economy is doing just fine, then why are we experiencing such a retail apocalypse? All over America, vast shopping malls that were once buzzing with eager consumers now resemble mausoleums. We have never seen anything quite like this in our entire history, and nobody is quite sure what is going to happen next.

Not too long ago I walked into a Macy’s, and it was eerily quiet. I stumbled around the men’s department looking for something to buy, but I was deeply disappointed in what was being offered. After some time had passed, an employee finally noticed me and came over to help, but they didn’t have anything that I was looking for.

And it is a sad thing, because over the past several years when I have gone into Macy’s looking to spend money, most of the time I have come out of there without spending a penny. Macy’s has made some very bad decisions recently, and I am hoping that they can still turn things around. But for the moment, they are closing stores and cutting jobs. The following comes from the New York Times

Struggling with sagging sales over another crucial holiday shopping season, Macy’s announced on Wednesday that it was eliminating more than 10,000 jobs as part of a continuing plan to cut costs and close 100 stores.

Macy’s, the country’s largest department store chain, said sales at its stores had fallen 2.1 percent in November and December compared with the same period in 2015. Terry J. Lundgren, the company’s chairman and chief executive, said in a statement that while the trend was “consistent with the lower end of our guidance, we had anticipated sales would be stronger.”

Another legendary retailer that really does not have any hope left is Sears. Every year they just keep closing even more stores, and because they are losing so much money they don’t have anything to invest in the stores that remain. As a result, the state of many Sears locations is downright embarrassing at this point

But the retailer, famous for selling everything from shoes to vacuum cleaners to whole houses, is facing its biggest crisis ever. It’s closing hundreds of stores. Others are in shambles, with leaking ceilings and broken escalators. In some, employees hang bedsheets to shield shoppers from sections that stand empty.

Since the early portion of 2013, sales are down an astounding 37 percent for the company. Sears is currently more than 1.6 billion dollars in debt, and they are losing more than a billion dollars a year.

They keep closing stores in a desperate attempt to stop the bleeding, but it hasn’t worked.

In 2010, Sears had 3,555 stores.

Last year, Sears had 1,503 stores, and now a whole bunch more are being shut down.

But everyone can see where this is going. As I have stated repeatedly, Sears is going to zero, and many of the experts completely agree with me

“They are going out of business,” said Van Conway, an expert in bankruptcy and debt restructuring and CEO of Van Conway & Partners. “This snowball is 90% of the way to the bottom of the hill.”

Of course Sears is still surviving for the moment, and that is more than can be said for The Limited.

Back in the old days, it seemed like every mall had one of their stores. I remember passing it on my way to Orange Julius and Herman’s World of Sporting Goods.

But now they are shutting down every single location and will be online only

American malls just got emptier.

The Limited, a once-popular women’s clothing brand that offers casual attire and workwear, no longer has any storefronts.

On Saturday, a message on the store’s website read, “We’re sad to say that all The Limited stores nationwide have officially closed their doors. But this isn’t goodbye.” The website will still be up and running and will continue to ship nationwide, the company said.

In addition to Macy’s, Sears and The Limited, other huge names in the retail industry have also fallen on hard times and have had to shut stores over the past 12 months. The following comes from the Washington Post

The retail environment has proved challenging for a variety of stores: Sports Authority went out of business in 2016, shuttering more than 460 locations in U.S. malls and strip malls. PacSun, Aeropostale and American Apparel each have filed for bankruptcy protection in the past year and are aiming to reorganize and revive their businesses.

So why is this happening?

Without a doubt, our shopping habits have changed. And in the online world, many of these retailers are being absolutely crushed by competition from Amazon and other tech companies that developed online infrastructure before they did. I know that my wife and I actually prefer to shop online for many things when possible, and I anticipate that the share of retailing done online will only continue to grow in this country.

But let us also not underestimate the impact that the stagnating economy is having on ordinary consumers. Thanks to the last eight years, approximately two-thirds of all Americans are living paycheck to paycheck. More than a third of all Americans have a debt that is at least 180 days past due, and the rate of homeownership has been hovering near the lowest level that we have seen in about 50 years. As you read this article, more than 95 million Americans are not in the labor force, and that number has grown by 18 percent under Barack Obama. Homelessness in New York City and other major cities is at a record high, and as a nation we have accumulated the largest mountain of debt in the history of the world.

Let us hope that things can be turned around, but if current trends continue the retail apocalypse is just going to go from bad to worse, and we will continue to see lots of headlines about more stores closing down.

About the author: Michael Snyder is the founder and publisher of The Economic Collapse Blog and The Most Important News. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.

Does Black Friday Still Matter?

Bored - Public Domain

Once upon a time, “Black Friday” was a major event in the United States. Yes, the mainstream media is still endlessly hyping it up, and major retailers are still rolling out their “incredible deals”, but it appears that most Americans are tiring of this particular gimmick. Or perhaps it is just that U.S. consumers don’t have as much discretionary income as they once did. As you will see below, retail traffic this Black Friday was “much, much slower” than anticipated. And expectations were not great anyway – the number of shoppers was down last year, and it was being projected that there would be another decline in 2015. Yes, there were still a few fights on Black Friday, but mostly the “holiday” was marked by giant piles of unsold merchandise sitting around collecting dust. The inventory to sales ratio in the U.S. has surged to levels not seen since the last recession, and so the truth is that most retailers were hoping for much more contrived chaos on Black Friday than we actually witnessed.

Personally, I wish that this whole phenomenon would just simply disappear, because it definitely doesn’t bring out the best in the American people.

Who wants to see fellow citizens trampling one another and fighting with one another for cheaply made electronics that aren’t even manufactured in this country anyway?

Black Friday was always a disgusting spectacle, and now it appear to be fading.

Let’s start with Thanksgiving sales. More stores than ever are opening on Thanksgiving Day itself, and according to SunTrust that was a total “bust” this year…

We believe Thanksgiving shopping was a bust. We note that traffic seemed below last year both on- and off-mall. Members of our team who went to the malls first had no problem finding parking or navigating stores. Crowds were tame and, with some exceptions there seemed to be more browsing than buying and less items purchased. We heard many people discussing that deals were not that compelling compared to years past. Interestingly, many retailers closed at midnight- which contributed to a sharp decline in traffic shortly thereafter. Off-mall, members of our team visited Walmart and Target for the openings and had no problem finding parking. Customers at both were focused on electronics. Lines, even early, were about half of what they were last year and quickly dissipated. The only off-mall big box retailer we visited with consistently long lines and customers making multiple item purchases was Kohl’s — where buys were focused on deals not available online.

Once Black Friday rolled around, things didn’t get any better. For example, one analyst said that traffic at the Mall of America didn’t “look much busier than an average Saturday morning”

At the Mall of America in Minneapolis, the largest in the country, Edward Yruma, managing director at KeyBanc Capital Markets, said he’s seeing less traffic than years past as well. He was there from 6 p.m. to 1 a.m. last night and arrived again at 8 a.m. this morning.

It doesn’t look much busier than an average Saturday morning,” said Yruma.

And in North Carolina, retailers saw “much less traffic than was anticipated”

Jeff Simpson, a director at Deloitte Consulting LLP’s retail practice, surveyed shopping centers in North Carolina and saw smaller crowds than expected for Black Friday.

Across the board, much less traffic than was anticipated,” he said. “Much, much slower.”

Of course this wasn’t much of a surprise. A global recession has already begun, and investors were dumping retail stocks ahead of Thanksgiving in anticipation of a horrible shopping season. The following comes from the New York Post

Wall Street, fearful that consumers are running out of cash heading into the crucial Christmas retail season, are selling off retail stocks and everything else sensitive to consumer spending.

So why are consumers running out of cash?

Well, it is because the middle class is dying, poverty in America is exploding and the cost of living continues to soar.

Just look at what is happening to healthcare costs. It turns out that employees that work for medium and large companies in the U.S. are now paying more than double for health insurance than they were a decade ago…

Employees of midsize and large companies in 2015 paid an average of $4,700 for their health insurance, up from $2,001 in 2005, according to recent analysis from Aon Hewitt.

For much more on how the cost of living is absolutely crippling families all over this nation, please see my previous article entitled “Inflation Is Crushing The Middle Class“.

Meanwhile, things continue to get worse around the rest of the globe as well. The number of unemployed job seekers just hit a brand new record high in France, Puerto Rico is on the verge of a major debt default, and on Friday there was an absolutely massive stock market decline in China

In China, equities saw a significant sell off as a result of investigations by the Chinese securities regulatory body into several brokerages for breaking regulations. The Shanghai Composite closed 199 points, or 5.48 percent, lower; the Shenzhen Composite closed 6.1 percent lower, the Chinext was down 6.1 percent, and the CSI300 Index saw a decline of 5.38 percent.

Chinese brokerages took major hits, with Citic Securities, Founder Securities, and China Merchants closing 10.1, 10, and 9.98 percent lower after news broke that the China Securities Regulatory Commission (CSRC) has launched investigations into these firms to weed out short selling and speculation.

I hope that you enjoyed this Thanksgiving as much as you possibly could, because all of the underlying economic numbers are absolutely screaming that hard times are ahead.

This year, Americans are going to spend an average of $130 on “self-gifting” and more than $800 on the holiday season overall. People are spending money that they don’t have on things that they don’t need, and meanwhile very few of us are actively preparing for what promises to be a very challenging 2016.

So yes, let us enjoy the time that we have with our families, but let us also not be completely oblivious to the huge changes that are literally happening all around us.

(Originally published on The Economic Collapse Blog)

Retailer Gap to close 175 stores across North America

Closed Sign - Photo by JamesAlan1986

The retailer Gap is to close 175 stores across North America over the next few years as it attempts to turn around the business.

A “limited number” of European shops would also close, the San-Francisco-based company said in a statement.

In addition, Gap will also cut about 250 jobs from its head office.

It has been struggling with falling sales as it competes with the likes of Europe’s H&M and Zara.

Like-for-like sales for the Gap brand fell by 15% in April, compared with a 3% rise in the same month last year.

(Read the rest of the story right here…)

Teen retailer Wet Seal closing two-thirds of its stores

Closed Sign - Photo by JamesAlan1986

Teen fashion purveyor Wet Seal has announced it will close 338 stores — two-thirds of the company’s retail locations — in a move that will result in layoffs that will affect about 3,695 employees.

The decision isn’t exactly a surprise, as the retailer has struggled to compete with larger fast-fashion competitors such as H&M that offer more on-trend merchandise. Wet Seal, which last year announced it would close its Arden B locations, has reported annual losses in 2012 and 2013 as sales tumbled lower.

(Read the rest of the story here…)

Sears closing 235 stores nationwide

Sears - Photo by Belus Capital Advisors

Sears was once a sparkling star of the retail world going back to the days before there was such a thing as a chain store, but this week the company reported another quarterly loss and the shuttering of 235 under-performing stores this year.

In its third quarter results announced on Thursday, Sears Holdings, the parent of the namesake department store and Kmart, announced a loss of $296 million compared to $310 million in the same period a year ago, ABC NEWS reported.

Sears Holdings was formed in 2005 when Sears and Kmart merged. The number of stores it will close increased from the 130 stores it announced about three months ago.

(Read the rest of the story here…)

The Retail Apocalypse Accelerates: Collapsing Holiday Sales Are A Signal That A Recession Is Coming

Sears - Photo by Belus Capital Advisors

Retail sales during the four day Thanksgiving weekend were down a whopping 11 percent from last year. This is a “make or break” time of the year for many retailers, and if things don’t turn around during the coming weeks we could see a tsunami of store closings in January and February. As you read this article, there is already more than a billion square feet of retail space sitting empty in the United States. Many have described the ongoing collapse of the retail industry as an “apocalypse”, and this apocalypse appears to be accelerating. Yes, the shift to online retailers is a significant factor, but as you will see below even online retailers struggled over the holiday weekend. The sad truth of the matter is that U.S. consumers are tapped out and are drowning in debt at this point, so they simply do not have as much money to spend as they once did.

According to the National Retail Federation, 5.2 percent fewer Americans shopped online or at retail stores over the past weekend. Those that did shop spent an average of 6.4 percent less money than consumers did last year.

So if less people shopped, and they spent less money on average, that means that total retail sales must have been way down.

And indeed they were. As the New York Times has reported, total retail sales were down an astounding 11 percent…

Sales, both in stores and online, from Thanksgiving through the weekend were estimated to have dropped 11 percent, to $50.9 billion, from $57.4 billion last year, according to preliminary survey results released Sunday by the National Retail Federation. Sales fell despite many stores’ opening earlier than ever on Thanksgiving Day.

And though many retailers offered the same aggressive discounts online as they did in their stores, the web failed to attract more shoppers or spending over the four-day holiday weekend than it did last year, the group said. The average person who shopped over the weekend spent $159.55 at online retailers, down 10.2 percent from last year.

No wonder there was less violence on Black Friday this year.

Traffic at retailers was way down.

Of course some analysts are trying to put a positive spin on all of this. For example, the CEO of the National Retail Federation says that this could actually be a sign that the economy is improving

As the WSJ reports, NRF’s CEO Matt Shay attributed the drop to a combination of factors, including the fact that retailers moved promotions earlier this year in attempt to get people out sooner and avoid what happened last year when people didn’t finish their shopping because of bad weather.

Also did we mention the NRF is perpetually cheery and always desperate to put a metric ton of lipstick on a pig? Well, hold on to your hats folks:

He also attributed the declines to better online offerings and an improving economy where “people don’t feel the same psychological need to rush out and get the great deal that weekend, particularly if they expected to be more deals,” he said.

And of course the sprint vs marathon comparisons, such as this one: “The holiday season and the weekend are a marathon not a sprint,” NRF Chief Executive Officer Matthew Shay said on a conference call. Odd how that metaphor is never used when the (seasonally-adjusted) sprint beats the marathoners.

So there you have it: a 11% collapse in retail spending has just been spun as super bullish for the US economy, whereby US consumers aren’t spending because the economy is simply too strong, and the only reason they don’t spend is because they will spend much more later. Or something.

The retail industry is absolutely brutal at this point. It is flooded with very large competitors that are chasing fewer and fewer disposable dollars.

In order to thrive, retailers need financially healthy consumers. But over time, U.S. consumers have been getting deeper and deeper into debt. The chart posted below shows that consumer credit in the United States has doubled since the year 2000…

Consumer Credit 2014

Meanwhile, the long-term trend for real median household income since the year 2000 has been down…

Real Median Household Income 2014

In order for Americans to spend money, they have to make money first.

Unfortunately, the quality of our jobs continues to plummet.

As I have written about previously, 50 percent of all American workers currently make less than $28,031 a year at their jobs. And here are some more numbers from a report that the Social Security Administration recently released…

-39 percent of American workers made less than $20,000 last year

-52 percent of American workers made less than $30,000 last year

-63 percent of American workers made less than $40,000 last year

-72 percent of American workers made less than $50,000 last year

So in order for a typical American family to bring in $50,000 a year or more both parents usually have to work.

Sometimes they both have to work more than one job.

And with the cost of living constantly rising, family budgets are being squeezed more than ever. That is why families have less money to spend at retail stores these days. For even more on the current financial condition of American families, please see my previous article entitled “Are You Better Off This Thanksgiving Than You Were Last Thanksgiving?

It is time for retailers in America to face the fact that economic conditions have fundamentally changed. U.S. consumers simply are not in as good shape as they used to be.

In addition, online retailers are going to continue to steal sales from traditional retail locations. This means that more stores are going to close and more retail space is going to be abandoned.

As I mentioned above, more than a billion square feet of retail space is aleady sitting vacant in the United States. And retail consultant Howard Davidowitz is projecting that up to half of all shopping malls in the U.S. may shut down within the next couple of decades

Within 15 to 20 years, retail consultant Howard Davidowitz expects as many as half of America’s shopping malls to fail. He predicts that only upscale shopping centers with anchors like Saks Fifth Avenue and Neiman Marcus will survive.

In the years ahead, it is going to become normal to see boarded up strip malls and abandoned shopping centers all over the country.

The golden age of retail is over, and now most retailers will have to work incredibly hard to survive the apocalypse that is unfolding right before our eyes.

(Originally published on The Economic Collapse Blog)

Sears Is Headed Straight For Death

Sears - Photo by Belus Capital Advisors

Sears is in huge trouble.

The department store has been bleeding cash, posting its ninth straight quarterly loss this morning.

Sears CEO Eddie Lampert said that the company would close even more stores and cut costs in the coming months to combat the “unacceptable” losses.

Earlier this year, former Sears executive Steven Dennis wrote that he believed a turnaround was impossible.

“The uncomfortable and sad reality is this: Sears has zero chance of transforming itself into a viable retail entity,” Dennis said.

(Read the rest of the story here…)

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