DEPARTMENT STORE RESULTS IMPLODING

The government issued their monthly retail sales this past week and four of the biggest department store chains in the country announced their quarterly results. The year over year retail sales increase of 2.4% is pitifully low in an economy that is supposedly in its sixth year of economic growth with a reported unemployment rate of only 5.3%. If all of these jobs have been created, why aren’t retail sales booming?

The year to date numbers are even worse than the year over year numbers. With consumer spending accounting for 70% of our GDP and real inflation running north of 5%, it’s pretty clear most Americans are experiencing a recession, despite the propaganda data circulated by the government and Fed. The only people not experiencing a recession are corporate executives enriching themselves through stock buybacks, Wall Street bankers using free Fed Bucks while rigging the the markets in their favor, politicians and government bureaucrats reaping their bribes from billionaire oligarchs, and the media toadies who dispense the Deep State approved propaganda to keep the ignorant masses dazed, confused, and endlessly distracted by Cecil the Lion, Bruce/Caitlyn Jenner, Ferguson, and blood coming out of whatever.

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You won’t hear CNBC, Bloomberg, the Wall Street Journal or any corporate mainstream media outlet reference the fact retail sales growth is at the exact same levels as when recession hit in 2008 and 2001. Their job is to regurgitate the message of economic recovery and confidence in the future, despite overwhelming evidence to the contrary.

Retail sales are actually far worse than the 2.4% reported number. Excluding the subprime debt fueled auto sales, retail sales only grew by 1.3% in the last year. The automakers are practically giving vehicles away as their lots are stuffed with inventory. The length of auto loans and the average amount of auto loans are now at all-time highs. The percentage of subprime auto loans is surging to record levels, as defaults begin to rise. The percentage of vehicles being leased is also at an all-time high. To call these “auto sales” strains credibility. These people are either perpetually renting their vehicles or just driving them until the repo man shows up.

Continue reading “DEPARTMENT STORE RESULTS IMPLODING”

CONSUMERS NOT FOLLOWING ORDERS

Last week the government reported personal income and spending for April. After months of blaming non-existent consumer spending on cold weather, shockingly occurring during the Winter, the captured mainstream media pundits, Ivy League educated Wall Street economist lackeys, and Keynesian loving money printers at the Fed have run out of propaganda to explain why Americans are not spending money they don’t have. The corporate mainstream media is now visibly angry with the American people for not doing what the Ivy League propagated Keynesian academic models say they should be doing.

The ultimate mouthpiece for the banking cabal, Jon Hilsenrath, who does the bidding of the Federal Reserve at the Rupert Murdoch owned Wall Street Journal, wrote an arrogant, condescending, putrid diatribe, directed at the middle class victims of Wall Street banker criminality and Federal Reserve acquiescence to the vested corporate interests that run this country. Here are the more disgusting portions of his denunciation of the formerly middle class working people of America.

We know you experienced a terrible shock when Lehman Brothers collapsed in 2008 and your employer responded by firing you.

We also know you shouldn’t have taken out that large second mortgage during the housing boom to fix up your kitchen with granite counter-tops.

You should feel lucky you’re not a Greek consumer.

Fed officials want to start raising the cost of your borrowing because they worry they’ve been giving you a free ride for too long with zero interest rates.

We listen to Fed officials all of the time here at The Wall Street Journal, and they just can’t figure you out.

Please let us know the problem.

The Wall Street Journal was swamped with thousands of angry responses from irate real people living in the real world, not the elite, QE enriched, oligarchs living in Manhattan penthouses, mansions on the Hamptons, or luxury condos in Washington, D.C. Hilsenrath presumes to know how the average American has been impacted by the criminal actions of sycophantic Ivy League educated central bankers and their avaricious Wall Street owners.

Continue reading “CONSUMERS NOT FOLLOWING ORDERS”

J.C. PENNEY HAD SUCH A GREAT CHRISTMAS SEASON THEY ARE CLOSING 40 STORES & FIRING 2,250 EMPLOYEES

Yeah. Major retailers always close stores when sales and profits are great. Funny how they decided to announce this one day after the 20% surge in their stock price based on a miniscule increase in comp store sales. The avalanche of store closing announcements from other retailers to follow.

JC Penney to close 40 stores in 2015

Krystina Gustafson |

J.C. Penney said Thursday it will close about 40 stores over the next year.

The closures, which represent nearly 4 percent of the 1,060 Penney U.S. stores, will affect about 2,250 employees, according to spokesman Joey Thomas.

Penney’s stock was down 1.8 percent in morning trading Thursday.

Most locations will close on or about April 4, Thomas said.

“We continually evaluate our store portfolio to determine whether there’s a need to close or relocate underperforming stores,” Thomas said. “Reviews such as these are essential in meeting our long-term goals for future company growth.”

The announcement comes one day after the retailer said that its same-store sales rose 3.7 percent during the crux of the holiday season.

Analysts have been calling for J.C. Penney, along with other retailers that they consider to have too many locations, to downsize their store counts.

By shuttering underperforming stores, retailers are able to cut costs in an environment when more sales are taking place online.

Just Wednesday, struggling teen company Wet Seal said it is closing 338 retail stores effective immediately. Last month, Sears announced that it would accelerate its store closing plan from 130 underperforming stores to 235.

Belus Capital Advisors analyst Brian Sozzi said these announcements would be far from the last.

“You will hear more, big-time store closure announcements within the next month,” he wrote in an email.

Retailers typically announce pending store closings in January. Last year, Penney’s announced 33 closings during the month.

Thomas said that eligible employees who do not remain with the company will receive benefits and, when possible, assistance in finding a job at a nearby store. The retailer will also offer an on-site career training class.

TWO RETAILERS DOWN, WET SEAL & RADIOSHACK CLOSE BEHIND

Delia’s and Deb Shops filed for bankruptcy in December. That’s 438 more vacant storefronts across America. Now Wet Seal will close at least 338 more stores, and likely all 500 when they file for bankruptcy in the next couple weeks. Then the biggie. RadioShack will end up closing 5,000 locations when they file for bankruptcy in the very near future. Once the financial results are reported in February for all the major retailers you will see announcements from Sears, JC Penney, Macys and many others closing hundreds or thousands of more stores. Sure sounds like a consumer driven economic recovery.

Wet Seal may be too late to stave off bankruptcy

By Andria Cheng

Published: Jan 7, 2015 12:16 p.m. ET

Teen retailer is closing most of its stores and laying off staff

NEW YORK (MarketWatch)—Teen retailer Wet Seal Inc. said Wednesday it is shutting two-thirds of its stores as it races to shore up liquidity and keep its operations afloat. But it may be too late to avoid the fate of former rivals Delia’s and Deb Shops, which filed for bankruptcy protection in December.

Already, a lender on some of the company’s senior convertible notes has issued a default notice with a deadline of Jan. 12. Unless Wet Seal meets its obligations or strikes a new agreement, the company is facing bankruptcy, said former bankruptcy attorney David Tawil of hedge fund Maglan Capital.

“I don’t think that there is a good chance (of it surviving) unless there is a trick up someone’s sleeve that we haven’t seen yet,” Tawil told MarketWatch. “It has been a long time coming.”

Wet Seal didn’t respond to a request seeking comment.

Wet Seal said the store closings came after it failed to get concessions from its landlords. The retailer, once a destination for teen and college girls, has lost sales to other fast-fashion players such as Forever 21 and H&M.

The teen sector has generally underperformed the broader retail segment, and other companies including Aéropostale Inc. ARO, +2.23% and Pacific Sunwear PSUN, +4.55% also are expected to shut stores this year. The sector is battling the trend in which teens are shifting spending to electronics and other items over fashion.

Read: here are some fashion stocks to buy and to avoid in 2015.

Wet Seal CEO Ed Thomas, who returned in September after heading the company from 2007 to 2011, has admitted the company has gotten “off-track,” skewing toward a younger customer with too much basic merchandise.

Thomas has promised to return the chain to “a fast-fashion model with emphasis on fashion product” that provides “constant newness.” The company will focus on fashion assortments over basics and define its target customer as 18-24-year-old women.

But that may be too late. Wet Seal has lost money in eight of the past 10 quarters, and is expected to lose money the next two quarters, according to Retail Metrics. Its comparable sales dropped 11 of the past 13 quarters. Holiday-quarter sales are expected to slump another 9.7%, after a 14.% drop in the third quarter, Retail Metrics data showed. Cash and cash equivalents tumbled 37% to $19.1 million as of Nov. 1 from a year earlier.

Some employees on Wednesday posted signs in store windows, with the hashtag #forgetwetseal, complaining that the company didn’t give them any prior notice of the closures and they weren’t paid for unused vacation and sick time.

“It’s possible but very unlikely” it will survive, said Retail Metrics President Ken Perkins.

It will be an uphill battle, he said.

SEARS MOVES CLOSER TO BANKRUPTCY AS WALL STREET CHEERS $628 MILLION LOSS

Even as the worst run retailer in America inches ever closer to bankruptcy the Wall Street shysters and the captured MSM continue to tout this piece of shit retailer as a good investment. I looked at their income statement and balance sheet. Here are the lowlights:

Revenue plunged by 13% ($1.1 billion) as the company dismantles itself, selling off the only decent businesses like Lands End.
Gross margin declined by 1.1% as they keep cutting prices to move their Chinese produced crap.
They only lost $628 million versus ONLY $547 million last year in one quarter. Year to date, this fine retailer has lost $1.65 billion after nine months. They are guaranteed to lose more than $1 billion in the 4th quarter, as they spiral towards bankruptcy.
Their balance sheet is a disaster. They have burned through $700 million of cash in 9 months and only have $300 million left.
They have $2.1 BILLION of debt due within 12 months.
They have slashed their inventory by 28% since last year. That bodes well for 4th quarter sales.
They now have $4.9 BILLION of debt and $126 MILLION of equity. Sounds like a great investment.
They still owe their retired workers $1.3 BILLION in pension and healthcare benefits.

This company is a pathetic joke and the Wall Street shysters and their propaganda peddler cohorts in the MSM have the balls to put out a press release saying they beat expectations, so all is well. This company is experiencing a death rattle. It’s over. The fat lady is singing. They are dead retailer walking. The bankruptcy filing is already being worked on by that genius Eddie Lampert.

Sears loss widens, but tops Wall Street views

By Chelsey Dulaney

Published: Dec 4, 2014 6:46 a.m. ET

Sears Holdings Corp.’s loss widened in its October quarter on a 13% drop in revenue, as the one-time fixture of the U.S. retail landscape continues to dismantle itself in an attempt to shore up its finances.

The results, however, came in above Wall Street’s expectations.

In recent years, Eddie Lampert, Sears’s chairman and chief executive, has sought to refocus the retailers operations, spinning off business lines like Lands’ End and assets like a big stake in Sears Canada to the company’s shareholders. Sears has recently turned to a spate of financing moves that leaned heavily on Mr. Lampert’s hedge fund in an effort to raise much-needed cash.

The efforts came as Sears worked to reassure vendors that have been rattled by its financial performance ahead of the holiday season, when retailers typically spend heavily securing inventory for the key selling season. Euler Hermès Group SA, which insures suppliers against nonpayment from retailers, told policyholders that it would cancel coverage on Sears, and vendor finance providers have tightened terms, vendors have said.

Sears said Thursday that it has raised $2.2 billion this year, in part from a loan from Mr. Lampert’s hedge fund and the sale of some of the company’s stake in Sears Canada. In November, Sears said it was also weighing whether to spin off up to 300 of its 712 company-owned stores into a separate entity in which Sears shareholders would be entitled to buy stakes.

As of Nov. 1, Sears had cash balances of $326 million, down from $384 million in domestic-only cash balances a year earlier. Sears said its domestic inventory was down $1.1 billion as of Nov. 1 from a year earlier, excluding the Lands’ End business, driven in part by improved productivity and store closures.

For the quarter ended Nov. 1, Sears posted a loss of $548 million, or $5.15 a share, compared with a loss of $534 million, or $5.03 a share a year earlier. Excluding costs of closing stores, certain tax matters and other items, the company’s adjusted per-share loss was $2.71.

Revenue fell 12.9% to $7.21 billion.

Analysts polled by Thomson Reuters had recently expected a loss of $3.31 a share on revenue of $6.88 billion. Sears had said last month that its top and bottom lines in the quarter were little changed from a year ago.

Gross margin slipped to 22.2% from 23.3% a year earlier, while total expenses fell 12%.

Overall, same-store sales fell 0.1% at domestic stores during the quarter. Sears said its Sears full-line domestic same-store sales fell 0.7%, but noted they would have grown 1% excluding the impact of consumer electronics. The company’s Kmart stores posted a 0.5% uptick in same-store sales, led by strength in apparel and outdoor living items.

SEARS BANKRUPTCY MARCH PICKS UP SPEED

You know things are bad when a retailer closes stores before Christmas. Sears is throwing in the towel before the fun and riots of Black Friday arrive. They’ve closed a couple hundred stores and fired 20,000 people in the last few years. Only 1,900 more stores and 200,000 more employees to go. Sears will declare bankruptcy. It might be in 2015 or 2016, but they will declare bankruptcy.

They are run by a Wall Street shyster and have been dying for the last decade. Wall Street reacted to the news by bumping the stock up. That’s the America we inhabit. They are even closing their store in the King of Prussia Mall. If you can’t make a profit in one of the most successful malls in America, you can’t make a profit anywhere.

More SPACE AVAILABLE signs coming to a mall near you.

Sears to close stores, lay off about 5,500: Seeking Alpha

Thu Oct 23, 2014 3:03pm EDT

A sign for the Sears department store is seen at Fair Oaks Mall in Fairfax, Virginia, January 7, 2010.

Credit: Reuters/Larry Downing

(Reuters) – Sears Holdings Corp (SHLD.O) is shuttering more than 100 stores and laying off at least 5,457 employees, investor website Seeking Alpha reported on Thursday, indicating the struggling retailer may be stepping up store closures.

Sears said in August it had closed 96 stores in the six months since February and planned to close a total of 130 underperforming stores during the full fiscal year. It added at the time that it may shutter additional stores beyond the 130 target.

Sears spokesman Chris Brathwaite declined to comment on the number of planned closures, saying the company would provide an update when it reports quarterly earnings next month. Reducing operations to the best performing stores is key to Sears’ revival strategy, he said.

“While this has resulted in store closures where appropriate – decisions that we do not take lightly – we continue to have a substantial nationwide footprint with a presence in many of the top malls in the country,” Brathwaite said.

Sears shares rose 5.9 percent to $36.46 on Nasdaq at mid-afternoon.

Since August the company has moved to close at least 46 Kmart stores, 30 Sears department stores and 31 Sears Auto Centers, Seeking Alpha said, citing local media reports and liquidation notices.

Sears is closing stores to cut costs as it shifts to an “asset-light” business model. The company lost nearly $1 billion during the first half of the fiscal year in a downturn that has worried some vendors and prompted a series of moves by the company to generate cash.

On Monday Sears said it would raise as much as $625 million through an unsecured loan and equity warrants, about half of which will be purchased by Chief Executive Eddie Lampert and his hedge fund. It was the company’s third fundraising in a little over month.

It also said on Monday that it would lease seven stores to discount fashion chain Primark for an undisclosed amount, reflecting its effort to use generate rental income from better performing retailers.

Sears had 1,077 Kmart stores and 793 Sears stores in the United States as of Aug. 2. The company had 226,000 U.S. employees as of Feb. 1.

JESUS CHRIST HIMSELF COULDN’T SAVE SEARS

Here is the best of Jim Quinn regarding Sears:

“Jesus Christ himself couldn’t save Sears. Has anyone on TBP actually bought anything at a Sears/Kmart in the last five years? They are the worst run retailer in America. They are dead and don’t even know it. These morons have added 247 new stores since 2006 but have managed to decrease their annual sales by $10 billion. Eddie Lampert is truly a retail genius. Over the next five years you will see a battle of retail zombies. Every big box retailer is part of the walking dead.

Sears will be the first victim and the stronger zombies – Home Depot, Lowes, and Wal-Mart will destroy them by underpricing appliances and tearing their heart out. Target, Kohls, and Wal-Mart already destroyed their apparel and general merchandise business.

A forward thinking realist would take a look at his 4,038 stores and close the 1,000 worst performing stores and try to conserve cash for the rough years ahead. They will not do this. They will go out in a blaze of glory with the biggest retail bankruptcy in history. There will be 4,038 rat infested vacant hulks rotting in our communities for decades.”

Jim Quinn – May 2011

“Eddie Lambert bought K-Mart and Sears as asset plays. One problem – the asset values of the properties have been cut in half. The fact that Sears and K-Mart are the worst managed retailers in America hasn’t helped. Sears started the year with $1.3 billion in cash and has burned through $600 billion in twelve months. This Lambert is a fucking genius. He is butt brothers with Jimmy Cramer. They worked together at where else but – GOLDMAN “THE VAMPIRE SQUID” SACHS. Cramer has been pumping this stock for years. Let’s assess his brilliance as an investment guru.

The stock traded at $192 per share in early 2007. Jim Cramer rated it a buy at this level. Today it trades at $34 a share. That is a NEGATIVE 82% return in just under five years. That is about par for the course for Jim Cramer. It traded at $95 earlier this year. It dropped 27% yesterday alone.

Here’s the deal. These bozos opened 247 new stores since 2006 and now they announced they are closing 120 stores. That is a piss in the ocean. If they really got serious and closed their 1,000 worst stores, they would have a chance to survive. But the ego of Eddie Lambert will not allow that decision to happen. He thinks he is smart. He’s a graduate of Goldman University for Christ’s sake. His reluctance to accept the facts will result in the bankruptcy of this piece of shit retailer and will leave the rotting carcasses of 4,000 rat infested hulks across suburbia. This stock is going to zero.”

Jim Quinn – December 2011

“Time to buy Sears stock. It’s a can’t miss. Jim Cramer’s buddy, Eddie Lampert, has now appointed himself CEO of Sears. This douchebag has had control of Sears for ten years and he’s run it into the fucking ground. They are lucky to have JC Penney around, so they can claim they aren’t the worst run retailer on earth. Their quarterly sales declined again. Their sales have been in decline since the day Lampert took over. He was touted by the MSM as the next Warren Buffett. What an investing genius. He has managed to drive the Sears stock price from $180 to $40 in just five years. Sears will lose $800 million during a year where the economy was supposedly expanding. Imagine how well they will do in 2013 as the economy flounders in recession. Expect the store closing announcements in the spring. I just know Eddie will turn this around. I sure hope the former CEO’s “Health Problems” clear up with his $5 million severance package.”

Jim Quinn – January 2013

“There are 2,500 Sears/Kmart stores in the country. There are hundreds of thousands of employees. Not for too much longer.”

COMING TO A MALL NEAR YOU

SEARS EMPLOYEES

Jim Quinn – February 2013

That brings us to this morning. Sears stock is plunging as suppliers are worried about getting paid. When your suppliers lose confidence in your ability to pay, you’re toast.

Sears Halted, Plunges After Report Vendors Halts Shipments

Is this the beginning of the end for Eddie Lampert’s exercise in financial engineering that is Sears Holdings Corp? Bloomberg reports that three of the biggest insurance firms for Sears’ suppliers are seeking to reduce coverage… which has led to:

*SEARS VENDOR SAID TO HALT SHIPMENTS AS INSURERS REDUCE COVERAGE
*SEARS VENDOR WITHHOLDING SHIPMENTS IS MEDIUM-SIZED SUPPLIER

The stock has been halted twice on volatility limits and is down 10% for now. SRAC 5Y CDS are offered at ~39% upfront, implying around a 87% probability of default.

As Bloomberg reports,

Three of the biggest insurance firms for Sears Holdings Corp.’s suppliers are seeking to reduce coverage, prompting at least one medium-sized vendor to halt shipments to the department-store chain, people with knowledge of the matter said.

Euler Hermes Group, one of the top providers of credit insurance to vendors, has been sending out cancellation notice , according to the people, who asked not to be identified because the information isn’t public. Coface SA has indicated that it intends to do the same, two of the people said. Atradius Credit Insurance, another of the insurers, said it’s scaling back coverage, though the firm hasn’t yet pulled policies.

The situation has spurred one supplier to withhold products from Sears after a recommendation from its credit department, according to an e-mail obtained by Bloomberg News. The vendor, a closely held company, asked not to be named.

Suppliers rely on credit insurance to protect themselves against not getting paid for products they ship to retailers. For Sears, which has posted 30 straight quarters of declining sales, the shrinking support from insurers may make it harder to stock products and execute a comeback.

David Huey, the president and regional director of U.S., Canada and Mexico for Atradius in Baltimore, said the firm is decreasing its Sears supplier coverage “as the problems have become more obvious.”

“We’ve reduced as we’ve seen the risk increase,” he said in an interview. Though no policies have been canceled, “it could happen,” he said. “We’re reviewing it regularly.”

* * *

Do you hear that?

The fat lady has started singing. More Space Available signs coming to a mall near you.

RETAIL DEATH RATTLE GROWS LOUDER

The definition of death rattle is a sound often produced by someone who is near death when fluids such as saliva and bronchial secretions accumulate in the throat and upper chest. The person can’t swallow and emits a deepening wheezing sound as they gasp for breath. This can go on for two or three days before death relieves them of their misery. The American retail industry is emitting an unmistakable wheezing sound as a long slow painful death approaches.

It was exactly four months ago when I wrote THE RETAIL DEATH RATTLE. Here are a few terse anecdotes from that article:

The absolute collapse in retail visitor counts is the warning siren that this country is about to collide with the reality Americans have run out of time, money, jobs, and illusions. The exponential growth model, built upon a never ending flow of consumer credit and an endless supply of cheap fuel, has reached its limit of growth. The titans of Wall Street and their puppets in Washington D.C. have wrung every drop of faux wealth from the dying middle class. There are nothing left but withering carcasses and bleached bones.

Once the Wall Street created fraud collapsed and the waves of delusion subsided, retailers have been revealed to be swimming naked. Their relentless expansion, based on exponential growth, cannibalized itself, new store construction ground to a halt, sales and profits have declined, and the inevitable closing of thousands of stores has begun.

Retail store results for the 1st quarter of 2014 have been rolling in over the last week. It seems the hideous government reported retail sales results over the last six months are being confirmed by the dying bricks and mortar mega-chains. In case you missed the corporate mainstream media not reporting the facts and doing their usual positive spin, here are the absolutely dreadful headlines:

Wal-Mart Profit Plunges By $220 Million as US Store Traffic Declines by 1.4%

Target Profit Plunges by $80 Million, 16% Lower Than 2013, as Store Traffic Declines by 2.3%

Sears Loses $358 Million in First Quarter as Comparable Store Sales at Sears Plunge by 7.8% and Sales at Kmart Plunge by 5.1%

JC Penney Thrilled With Loss of Only $358 Million For the Quarter

Kohl’s Operating Income Plunges by 17% as Comparable Sales Decline by 3.4%

Costco Profit Declines by $84 Million as Comp Store Sales Only Increase by 2%

Staples Profit Plunges by 44% as Sales Collapse and Closing Hundreds of Stores

Gap Income Drops 22% as Same Store Sales Fall

Ann Taylor Profit Crashes by 75% as Same Store Sales Fall

American Eagle Profits Tumble 86%, Will Close 150 Stores

Aeropostale Losses $77 Million as Sales Collapse by 12%

Big Lots Profit Tumbles by 90% as Sales Flat & Exiting Canadian Market

Best Buy Sales Decline by $300 Million as Margins Decline and Comparable Store Sales Decline by 1.3%

Macy’s Profit Flat as Comparable Store Sales decline by 1.4%

Dollar General Profit Plummets by 40% as Comp Store Sales Decline by 3.8%

Urban Outfitters Earnings Collapse by 20% as Sales Stagnate

McDonalds Earnings Fall by $66 Million as US Comp Sales Fall by 1.7%

Darden Profit Collapses by 30% as Same Restaurant Sales Plunge by 5.6% and Company Selling Red Lobster

TJX Misses Earnings Expectations as Sales & Earnings Flat

Dick’s Misses Earnings Expectations as Golf Store Sales Plummet

Home Depot Misses Earnings Expectations as Customer Traffic Only Rises by 2.2%

Lowes Misses Earnings Expectations as Customer Traffic was Flat

Of course, those headlines were never reported. I went to each earnings report and gathered the info that should have been reported by the CNBC bimbos and hacks. Anything you heard surely had a Wall Street spin attached, like the standard BETTER THAN EXPECTED. I love that one. At the start of the quarter the Wall Street shysters post earnings expectations. As the quarter progresses, the company whispers the bad news to Wall Street and the earnings expectations are lowered. Then the company beats the lowered earnings expectation by a penny and the Wall Street scum hail it as a great achievement. The muppets must be sacrificed to sustain the Wall Street bonus pool. Wall Street investment bank geniuses rated JC Penney a buy from $85 per share in 2007 all the way down to $5 a share in 2013. No more needs to be said about Wall Street “analysis”.

It seems even the lowered expectation scam hasn’t worked this time. U.S. retailer profits have missed lowered expectations by the most in 13 years. They generally “beat” expectations by 3% when the game is being played properly. They’ve missed expectations in the 1st quarter by 3.2%, the worst miss since the fourth quarter of 2000. If my memory serves me right, I believe the economy entered recession shortly thereafter. The brilliant Ivy League trained Wall Street MBAs, earning high six digit salaries on Wall Street, predicted a 13% increase in retailer profits for the first quarter. A monkey with a magic 8 ball could do a better job than these Wall Street big swinging dicks.

The highly compensated flunkies who sit in the corner CEO office of the mega-retail chains trotted out the usual drivel about cold and snowy winter weather and looking forward to tremendous success over the remainder of the year. How do these excuse machine CEO’s explain the success of many high end retailers during the first quarter? Doesn’t weather impact stores that cater to the .01%? The continued unrelenting decline in profits of retailers, dependent upon the working class, couldn’t have anything to do with this chart? It seems only the oligarchs have made much progress over the last four decades.

Retail CEO gurus all think they have a master plan to revive sales. I’ll let you in on a secret. They don’t really have a plan. They have no idea why they experienced tremendous success from 2000 through 2007, and why their businesses have not revived since the 2008 financial collapse. Retail CEOs are not the sharpest tools in the shed. They were born on third base and thought they hit a triple. Now they are stranded there, with no hope of getting home. They should be figuring out how to position themselves for the multi-year contraction in sales, but their egos and hubris will keep them from taking the actions necessary to keep their companies afloat in the next decade. Bankruptcy awaits. The front line workers will be shit canned and the CEO will get a golden parachute. It’s the American way.

The secret to retail success before 2007 was: create or copy a successful concept; get Wall Street financing and go public ASAP; source all your inventory from Far East slave labor factories; hire thousands of minimum wage level workers to process transactions; build hundreds of new stores every year to cover up the fact the existing stores had deteriorating performance; convince millions of gullible dupes to buy cheap Chinese shit they didn’t need with money they didn’t have; and pretend this didn’t solely rely upon cheap easy debt pumped into the veins of American consumers by the Federal Reserve and their Wall Street bank owners. The financial crisis in 2008 revealed everyone was swimming naked, when the tide of easy credit subsided.

The pundits, politicians and delusional retail CEOs continue to await the revival of retail sales as if reality doesn’t exist. The 1 million retail stores, 109,000 shopping centers, and nearly 15 billion square feet of retail space for an aging, increasingly impoverished, and savings poor populace might be a tad too much and will require a slight downsizing – say 3 or 4 billion square feet. Considering the debt fueled frenzy from 2000 through 2008 added 2.7 billion square feet to our suburban sprawl concrete landscape, a divestiture of that foolish investment will be the floor. If you think there are a lot of SPACE AVAILABLE signs dotting the countryside, you ain’t seen nothing yet. The mega-chains have already halted all expansion. That was the first step. The weaker players like Radio Shack, Sears, Family Dollar, Coldwater Creek, Staples, Barnes & Noble, Blockbuster and dozens of others are already closing stores by the hundreds. Thousands more will follow.

This isn’t some doom and gloom prediction based on nothing but my opinion. This is the inevitable result of demographic certainties, unequivocal data, and the consequences of a retailer herd mentality and lemming like behavior of consumers. The open and shut case for further shuttering of 3 to 4 billion square feet of retail is as follows:

There is 47 square feet of retail space per person in America. This is 8 times as much as any other country on earth. This is up from 38 square feet in 2005; 30 square feet in 2000; 19 square feet in 1990; and 4 square feet in 1960. If we just revert to 2005 levels, 3 billion square feet would need to go dark. Does that sound outrageous?

Annual consumer expenditures by those over 65 years old drop by 40% from their highest spending years from 45 to 54 years old. The number of Americans turning 65 will increase by 10,000 per day for the next 16 years. There were 35 million Americans over 65 in 2000, accounting for 12% of the total population. By 2030 there will be 70 million Americans over 65, accounting for 20% of the total population. Do you think that bodes well for retailers?

Half of Americans between the ages of 50 and 64 have no retirement savings. The other half has accumulated $52,000 or less. It seems the debt financed consumer product orgy of the last two decades has left most people nearly penniless. More than 50% of workers aged 25 to 44 report they have less than $10,000 of total savings.

The lack of retirement and general savings is reflected in the historically low personal savings rate of a miniscule 3.8%. Before the materialistic frenzy of the last couple decades, rational Americans used to save 10% or more of their personal income. With virtually no savings as they approach their retirement years and an already extremely low savings rate, do retail CEOs really see a spending revival on the horizon?

If you thought the savings rate was so low because consumers are flush with cash and so optimistic about their job prospects they are unconcerned about the need to save for a rainy day, you would be wrong. It has been raining for the last 14 years. Real median household income is 7.5% lower today than it was in 2001. Retailers added 2.7 billion square feet of retail space as real household income fell. Sounds rational.

This decline in household income may have something to do with the labor participation rate plummeting to the lowest level since 1978. There are 247.4 million working age Americans and only 145.7 million of them employed (19 million part-time; 9 million self-employed; 20 million employed by the government). There are 92 million Americans, who according to the government have willingly left the workforce, up by 13.3 million since 2007 when over 146 million Americans were employed. You’d have to be a brainless twit to believe the unemployment rate is really 6.3% today. Retail sales would be booming if the unemployment rate was really that low.

With a 16.5% increase in working age Americans since 2000 and only a 6.5% increase in employed Americans, along with declining real household income, an inquisitive person might wonder how retail sales were able to grow from $3.3 trillion in 2000 to $5.1 trillion in 2013 – a 55% increase. You need to look no further than your friendly Too Big To Trust Wall Street banks for the answer. In the olden days of the 1970s and early 1980s Americans put 10% to 20% down to buy a house and then systematically built up equity by making their monthly payments. The Ivy League financial engineers created “exotic” (toxic) mortgage products requiring no money down, no principal payments, and no proof you could make a payment, in their control fraud scheme to fleece the American sheeple. Their propaganda machine convinced millions more to use their homes as an ATM, because home prices never drop. Just ask Ben Bernanke. Even after the Bernanke/Blackrock fake housing recovery (actual mortgage originations now at 1978 levels) household real estate percent equity is barely above 50%, well below the 70% levels before the Wall Street induced debt debacle. With the housing market about to head south again, the home equity ATM will have an Out of Order sign on it.

We hear the endless drivel from disingenuous Keynesian nitwits about government and consumer austerity being the cause of our stagnating economy. My definition of austerity would be an actual reduction in spending and debt accumulation. It seems during this time of austerity total credit market debt has RISEN from $53.5 trillion in 2009 to $59 trillion today. Not exactly austere, as the Federal government adds $2.2 billion PER DAY to the national debt, saddling future generations with the bill for our inability to confront reality. The American consumer has not retrenched, as the CNBC bimbos and bozos would have you believe. Consumer credit reached an all-time high of $3.14 trillion in March, up from $2.52 trillion in 2010. That doesn’t sound too austere to me. Of course, this increase is solely due to Obamanomics and Bernanke’s $3 trillion gift to his Wall Street owners. The doling out of $645 billion to subprime college “students” and subprime auto “buyers” since 2010 accounts for more than 100% of the increase. The losses on these asinine loans will be epic. Credit card debt has actually fallen as people realize it is their last lifeline. They are using credit cards to pay income taxes, real estate taxes, higher energy costs, higher food costs, and the other necessities of life.

The entire engineered “recovery” since 2009 has been nothing but a Federal Reserve/U.S. Treasury conceived, debt manufactured scam. These highly educated lackeys for the establishment have been tasked with keeping the U.S. Titanic afloat until the oligarchs can safely depart on the lifeboats with all the ship’s jewels safely stowed in their pockets. There has been no housing recovery. There has been no jobs recovery. There has been no auto sales recovery. Giving a vehicle to someone with a 580 credit score with a 0% seven year loan is not a sale. It’s a repossession in waiting. The government supplied student loans are going to functional illiterates who are majoring in texting, facebooking and twittering. Do you think these indebted University of Phoenix dropouts living in their parents’ basements are going to spur a housing and retail sales recovery? This Keynesian “solution” was designed to produce the appearance of recovery, convince the masses to resume their debt based consumption, and add more treasure into the vaults of the Wall Street banks.

The master plan has failed miserably in reviving the economy. Savings, capital investment, and debt reduction are the necessary ingredients for a sustained healthy economic system. Debt based personal consumption of cheap foreign produced baubles & gadgets, $1 trillion government deficits to sustain the warfare/welfare state, along with a corrupt political and rigged financial system are the explosive concoction which will blow our economic system sky high. Facts can be ignored. Media propaganda can convince the willfully ignorant to remain so. The Federal Reserve can buy every Treasury bond issued to fund an out of control government. But eventually reality will shatter the delusions of millions as the debt based Ponzi scheme will run out of dupes and collapse in a flaming heap.

The inevitable shuttering of at least 3 billion square feet of retail space is a certainty. The aging demographics of the U.S. population, dire economic situation of both young and old, and sheer lunacy of the retail expansion since 2000, guarantee a future of ghost malls, decaying weed infested empty parking lots, retailer bankruptcies, real estate developer bankruptcies, massive loan losses for the banking industry, and the loss of millions of retail jobs. Since I always look for a silver lining in a black cloud, I predict a bright future for the SPACE AVAILABLE and GOING OUT OF BUSINESS sign making companies.

WHY RETAILERS ARE CLOSING THOUSANDS OF STORES – SUMMARIZED IN ONE CHART

It’s too bad 98% of the people in this country are math challenged. The storyline of retail recovery is false. It will continue to be false based on pure mathematics and demographics. The fact is that REAL retail sales, adjusted for population growth, are at the same level as 1999 and still 5.3% below the debt induced peak in June 2005. That doesn’t sound catastrophic until you take into account that delusional retail CEO’s across the land added 3 BILLION square feet of new retail space since 1999, bringing total retail square footage up to 15 BILLION. That is approximately 50 square feet of retail space per person in the U.S.

Retailers judge themselves upon sales per square foot. If you add 25% more square feet and achieve the same level of sales, guess what happens to profits? When you see the MSM crowing about Home Depot’s tremendous sales and profits, they fail to mention that they are still lower than they were in 2007. Retail sales have peaked for this cycle and are headed down. With 10,000 Boomers per day turning 65 years old with no savings, the future for retail gets bleaker by the day. There have been quite a few announcements of store closings by major well known retailers in the last few months, but we are only in the 2nd inning of this ball game. It won’t be over until the 15 Billion square feet is whittled down to 10 Billion square feet. If you were thinking of buying JC Penney, Sears or RadioShack stock, you might want to think twice about it.

The best investment today would be in the company that makes SPACE AVAILABLE signs.

THE GREAT RETAIL RECOVERY

Retailers and restaurants always close stores by the thousands when the economy is growing, unemployment is plunging, and incomes are rising. Right?

Use your brains people. Stop believing the storylines. Open your eyes and see what is happening. Count the number of Space Available signs on your next road trip through suburban hell.

Does the story peddled by the government and legacy media match the reality you see with your own eyes?

This list of store closings is just the tip of the iceberg. There are tens of thousands to go over the next five years.

Guest Post by Tony Sanders

Jobs Recovery? 17 Retailers Shutting Down Stores (And Not All From Internet Competition)

This is the worst employment recovery in American history from a credit bubble. And the news just keeps getting worse and worse, particularly for service workers at retail shops. You can’t blame Amazon.com for stealing sales from Red Lobster, Ruby Tuesday’s, Sbarro’s or Quizno’s, however.

Here are 17 companies that have closed stores or will close stores soon:

* Office supply company Staples has announced plans to close 225 stores by 2015, which is about 15 percent of its chain. Staples already closed 40 stores last year.

* Office Depot, Staples’ main competitor, which bought OfficeMax last year, is expected to announce its own round of store closings soon.

* Radio Shack has announced plans to close 20 percent of its stores this year, which is as many as 1,100 stores. The company, which operates around 4,000 stores, reported that its sales fell by 19 percent last year.

* Albertsons closed 26 stores in January and February according to Supermarket News. Analysts expect many more Albertsons could soon be shuttered because Albertsons owner hedge fund Cerberus Capital Management just bought Safeway Inc. Some Safeway stores could soon shut down as well.

* Abercrombie & Fitch, the clothing retailer, is planning to close 220 stores by the end of 2015. The company is also planning to shut down an entire chain it owns, Gilly Hicks, which has 20 stores, 24/7 Wall Street reported.

* Barnes & Nobles is planning to shut down one third of its stores in the next year: about 218 stores. The chain has already closed its iconic flagship store in New York City.

* J.C. Penney is closing about 33 stores and laying off about 2,000 employees.

* Toys R Us has plans to close 100 stores according to The Record newspaper in New Jersey.

* The Sweetbay Supermarket chain will close all 17 of the stores it operates in the Tampa Bay area, The Herald Tribune newspaper reported. Many of the stores might open as Winn-Dixie Stores. Sweetbay closed 33 stores in Florida last year.

* Loehmann’s chain of discount clothing stores in the New York City area has entirely shut down. Loehmann’s once operated 39 stores, The New York Times reported, and was considered an institution by generations of New Yorkers.

* Sears Holdings, which owns both Sears and Kmart, to close another 500 stores this year, according to industry analyst John Kernan to CNN. Sears has already shut down its flagship store in Chicago.

* Quiznos has filed for bankruptcy, USA Today reported, and could close many of its 2,100 stores.

* Sbarro which operates pizza and Italian restaurants in malls, is planning to close 155 locations in the United States and Canada. That means nearly 20 percent of Sbarro’s will close. The chain operates around 800 outlets.

* Ruby Tuesday announced plans to close 30 restaurants in January after its sales fell by 7.8 percent. The chain currently operates around 775 steakhouses across the US.

* Red Lobster will sell an unknown number of stores. The chain is in such bad shape that the parent company, Darden Restaurants Inc., had to issue a press release stating that the chain would not close. Instead Darden is planning to spin Red Lobster off into another company and sell some of its stores.

* Ralph’s, a subsidiary of Kroger, has announced plans to close 15 supermarkets in Southern California within 60 days.

* Safeway closed 72 Dominick’s grocery stores in the Chicago area last year.

The culprit? Among other factors, personal consumption growth YoY has declined from 9.04% in March 2000 to 3.45% in January 2014. And real median household income has plunged as well.

And if I want fresh half-and-half for my White Russians (aka, Caucasians), I go to my neighborhood Ralph’s like Jeffrey Lebowski (not Amazon.com). I hope they didn’t close Lebowski’s neighborhood Ralph’s!!

DO I EVER TIRE OF BEING RIGHT?

I penned the paragraph below a couple weeks ago. Since then, Sears/Kmart has been announcing closings across the land. Today it is being confirmed that Radio Shack will be shuttering 500 more stores, after shuttering 500 last year. Only 6,000 more to go. This was so predictable, a BLS economist could have seen it coming. Of course, Jim Cramer says it’s a buy.

“Quarter after quarter there will be more announcements of store closings. Macys just announced the closing of 5 stores and firing of 2,500 retail workers. JC Penney just announced the closing of 33 stores and firing of 2,000 retail workers. Announcements are imminent from Sears, Radio Shack and a slew of other retailers who are beginning to see the writing on the wall. The vacancy rate will be rising in strip malls, power malls and regional malls, with the largest growing sector being ghost malls. Before long it will appear that SPACE AVAILABLE is the fastest growing retailer in America.” – Famous Retail Guru – Admin – The Retail Death Rattle – 1-14-14

One year ago I wrote an article called Disastrous Results, detailing the coming bankruptcy of Radio Shack.

The chickens are coming home to roost. There will be 500 more vacant shells in malls across America. Liquidation is in the foreseeable future. Book it Dano.

THE RETAIL DEATH RATTLE

“I was part of that strange race of people aptly described as spending their lives doing things they detest, to make money they don’t want, to buy things they don’t need, to impress people they don’t like.” ― Emile Gauvreau

If ever a chart provided unequivocal proof the economic recovery storyline is a fraud, the one below is the smoking gun. November and December retail sales account for 20% to 40% of annual retail sales for most retailers. The number of visits to retail stores has plummeted by 50% since 2010. Please note this was during a supposed economic recovery. Also note consumer spending accounts for 70% of GDP. Also note credit card debt outstanding is 7% lower than its level in 2010 and 16% below its peak in 2008. Retailers like J.C. Penney, Best Buy, Sears, Radio Shack and Barnes & Noble continue to report appalling sales and profit results, along with listings of store closings. Even the heavyweights like Wal-Mart and Target continue to report negative comp store sales. How can the government and mainstream media be reporting an economic recovery when the industry that accounts for 70% of GDP is in free fall? The answer is that 99% of America has not had an economic recovery. Only Bernanke’s 1% owner class have benefited from his QE/ZIRP induced stock market levitation.

Source: WSJ

The entire economic recovery storyline is a sham built upon easy money funneled by the Fed to the Too Big To Trust Wall Street banks so they can use their HFT supercomputers to drive the stock market higher, buy up the millions of homes they foreclosed upon to artificially drive up home prices, and generate profits through rigging commodity, currency, and bond markets, while reducing loan loss reserves because they are free to value their toxic assets at anything they please – compliments of the spineless nerds at the FASB. GDP has been artificially propped up by the Federal government through the magic of EBT cards, SSDI for the depressed and downtrodden, never ending extensions of unemployment benefits, billions in student loans to University of Phoenix prodigies, and subprime auto loans to deadbeats from the Government Motors financing arm – Ally Financial (85% owned by you the taxpayer). The country is being kept afloat on an ocean of debt and delusional belief in the power of central bankers to steer this ship through a sea of icebergs just below the surface.

The absolute collapse in retail visitor counts is the warning siren that this country is about to collide with the reality Americans have run out of time, money, jobs, and illusions. The most amazingly delusional aspect to the chart above is retailers continued to add 44 million square feet in 2013 to the almost 15 billion existing square feet of retail space in the U.S. That is approximately 47 square feet of retail space for every person in America. Retail CEOs are not the brightest bulbs in the sale bin, as exhibited by the CEO of Target and his gross malfeasance in protecting his customers’ personal financial information. Of course, the 44 million square feet added in 2013 is down 85% from the annual increases from 2000 through 2008. The exponential growth model, built upon a never ending flow of consumer credit and an endless supply of cheap fuel, has reached its limit of growth. The titans of Wall Street and their puppets in Washington D.C. have wrung every drop of faux wealth from the dying middle class. There are nothing left but withering carcasses and bleached bones.

The impact of this retail death spiral will be vast and far reaching. A few factoids will help you understand the coming calamity:

There are approximately 109,500 shopping centers in the United States ranging in size from the small convenience centers to the large super-regional malls.
There are in excess of 1 million retail establishments in the United States occupying 15 billion square feet of space and generating over $4.4 trillion of annual sales. This includes 8,700 department stores, 160,000 clothing & accessory stores, and 8,600 game stores.
U.S. shopping-center retail sales total more than $2.26 trillion, accounting for over half of all retail sales.
The U.S. shopping-center industry directly employed over 12 million people in 2010 and indirectly generated another 5.6 million jobs in support industries. Collectively, the industry accounted for 12.7% of total U.S. employment.
Total retail employment in 2012 totaled 14.9 million, lower than the 15.1 million employed in 2002.
For every 100 individuals directly employed at a U.S. regional shopping center, an additional 20 to 30 jobs are supported in the community due to multiplier effects.

The collapse in foot traffic to the 109,500 shopping centers that crisscross our suburban sprawl paradise of plenty is irreversible. No amount of marketing propaganda, 50% off sales, or hot new iGadgets is going to spur a dramatic turnaround. Quarter after quarter there will be more announcements of store closings. Macys just announced the closing of 5 stores and firing of 2,500 retail workers. JC Penney just announced the closing of 33 stores and firing of 2,000 retail workers. Announcements are imminent from Sears, Radio Shack and a slew of other retailers who are beginning to see the writing on the wall. The vacancy rate will be rising in strip malls, power malls and regional malls, with the largest growing sector being ghost malls. Before long it will appear that SPACE AVAILABLE is the fastest growing retailer in America.

The reason this death spiral cannot be reversed is simply a matter of arithmetic and demographics. While arrogant hubristic retail CEOs of public big box mega-retailers added 2.7 billion retail square feet to our already over saturated market, real median household income flat lined. The advancement in retail spending was attributable solely to the $1.1 trillion increase (68%) in consumer debt and the trillion dollars of home equity extracted from castles in the sky, that later crashed down to earth. Once the Wall Street created fraud collapsed and the waves of delusion subsided, retailers have been revealed to be swimming naked. Their relentless expansion, based on exponential growth, cannibalized itself, new store construction ground to a halt, sales and profits have declined, and the inevitable closing of thousands of stores has begun. With real median household income 8% lower than it was in 2008, the collapse in retail traffic is a rational reaction by the impoverished 99%. Americans are using their credit cards to pay their real estate taxes, income taxes, and monthly utilities, since their income is lower, and their living expenses rise relentlessly, thanks to Bernanke and his Fed created inflation.

The media mouthpieces for the establishment gloss over the fact average gasoline prices in 2013 were the second highest in history. The highest average price was in 2012 and the 3rd highest average price was in 2011. These prices are 150% higher than prices in the early 2000’s. This might not matter to the likes of Jamie Dimon and Jon Corzine, but for a middle class family with two parents working and making 7.5% less than they made in 2000, it has a dramatic impact on discretionary income. The fact oil prices have risen from $25 per barrel in 2003 to $100 per barrel today has not only impacted gas prices, but utility costs, food costs, and the price of any product that needs to be transported to your local Wally World. The outrageous rise in tuition prices has been aided and abetted by the Federal government and their doling out of loans so diploma mills like the University of Phoenix can bilk clueless dupes into thinking they are on their way to an exciting new career, while leaving them jobless in their parents’ basement with a loan payment for life.

The laughable jobs recovery touted by Obama, his sycophantic minions, paid off economist shills, and the discredited corporate legacy media can be viewed appropriately in the following two charts, that reveal the false storyline being peddled to the techno-narcissistic iGadget distracted masses. There are 247 million working age Americans between the ages of 18 and 64. Only 145 million of these people are employed. Of these employed, 19 million are working part-time and 9 million are self- employed. Another 20 million are employed by the government, producing nothing and being sustained by the few remaining producers with their tax dollars. The labor participation rate is the lowest it has been since women entered the workforce in large numbers during the 1980’s. We are back to levels seen during the booming Carter years. Those peddling the drivel about retiring Baby Boomers causing the decline in the labor participation rate are either math challenged or willfully ignorant because they are being paid to be so. Once you turn 65 you are no longer counted in the work force. The percentage of those over 55 in the workforce has risen dramatically to an all-time high, as the Me Generation never saved for retirement or saw their retirement savings obliterated in the Wall Street created 2008 financial implosion.

To understand the absolute idiocy of retail CEOs across the land one must parse the employment data back to 2000. In the year 2000 the working age population of the U.S. was 213 million and 136.9 million of them were working, a record level of 64.4% of the population. There were 70 million working age Americans not in the labor force. Fourteen years later the number of working age Americans is 247 million and only 144.6 million are working. The working age population has risen by 16% and the number of employed has risen by only 5.6%. That’s quite a success story. Of course, even though median household income is 7.5% lower than it was in 2000, the government expects you to believe that 22 million Americans voluntarily left the labor force because they no longer needed a job. While the number of employed grew by 5.6% over fourteen years, the number of people who left the workforce grew by 31.1%. Over this same time frame the mega-retailers that dominate the landscape added almost 3 billion square feet of selling space, a 25% increase. A critical thinking individual might wonder how this could possibly end well for the retail genius CEOs in glistening corporate office towers from coast to coast.

This entire materialistic orgy of consumerism has been sustained solely with debt peddled by the Wall Street banking syndicate. The average American consumer met their Waterloo in 2008. Bernanke’s mission was to save bankers, billionaires and politicians. It was not to save the working middle class. You’ve been sacrificed at the altar of the .1%. The 0% interest rates were for Jamie Dimon and Lloyd Blankfein. Your credit card interest rate remained between 13% and 21%. So, while you struggle to pay bills with your declining real income, the Wall Street bankers are again generating record profits and paying themselves record bonuses. Profits are so good, they can afford to pay tens of billions in fines for their criminal acts, and still be left with billions to divvy up among their non-prosecuted criminal executives.

Bernanke and his financial elite owners have been able to rig the markets to give the appearance of normalcy, but they cannot rig the demographic time bomb that will cause the death and destruction of our illusory retail paradigm. Demographics cannot be manipulated or altered by the government or mass media. The best they can do is ignore or lie about the facts. The life cycle of a human being is utterly predictable, along with their habits across time. Those under 25 years old have very little income, therefore they have very little spending. Once a job is attained and income levels rise, spending rises along with the increased income. As the person enters old age their income declines and spending on stuff declines rapidly. The media may be ignoring the fact that annual expenditures drop by 40% for those over 65 years old from the peak spending years of 45 to 54, but it doesn’t change the fact. They also cannot change the fact that 10,000 Americans will turn 65 every day for the next sixteen years. They also can’t change the fact the average Baby Boomer has less than $50,000 saved for retirement and is up to their grey eye brows in debt.

With over 15% of all 25 to 34 year olds living in their parents’ basement and those under 25 saddled with billions in student loan debt, the traditional increase in income and spending is DOA for the millennial generation. The hardest hit demographic on the job front during the 2008 through 2014 ongoing recession has been the 45 to 54 year olds in their peak earning and spending years. Combine these demographic developments and you’ve got a perfect storm for over-built retailers and their egotistical CEOs.

The media continues to peddle the storyline of on-line sales saving the ancient bricks and mortar retailers. Again, the talking head pundits are willfully ignoring basic math. On-line sales account for 6% of total retail sales. If a dying behemoth like JC Penney announces a 20% decline in same store sales and a 20% increase in on-line sales, their total change is still negative 17.6%. And they are still left with 1,100 decaying stores, 100,000 employees, lease payments, debt payments, maintenance costs, utility costs, inventory costs, and pension costs. Their future is so bright they gotta wear a toe tag.

The decades of mal-investment in retail stores was enabled by Greenspan, Bernanke, and their Federal Reserve brethren. Their easy money policies enabled Americans to live far beyond their true means through credit card debt, auto debt, mortgage debt, and home equity debt. This false illusion of wealth and foolish spending led mega-retailers to ignore facts and spread like locusts across the suburban countryside. The debt fueled orgy has run out of steam. All that is left is the largest mountain of debt in human history, a gutted and debt laden former middle class, and thousands of empty stores in future decaying ghost malls haunting the highways and byways of suburbia.

The implications of this long and winding road to ruin are far reaching. Store closings so far have only been a ripple compared to the tsunami coming to right size the industry for a future of declining spending. Over the next five to ten years, tens of thousands of stores will be shuttered. Companies like JC Penney, Sears and Radio Shack will go bankrupt and become historical footnotes. Considering retail employment is lower today than it was in 2002 before the massive retail expansion, the future will see in excess of 1 million retail workers lose their jobs. Bernanke and the Feds have allowed real estate mall owners to roll over non-performing loans and pretend they are generating enough rental income to cover their loan obligations. As more stores go dark, this little game of extend and pretend will come to an end. Real estate developers will be going belly-up and the banking sector will be taking huge losses again. I’m sure the remaining taxpayers will gladly bailout Wall Street again. The facts are not debatable. They can be ignored by the politicians, Ivy League economists, media talking heads, and the willfully ignorant masses, but they do not cease to exist.

“Facts do not cease to exist because they are ignored.” – Aldous Huxley

SHOCKING NEWS

Who coulda predicted this development? I hate to tell the new CEO, who was the old CEO, before he was replaced by another CEO, that 33 stores ain’t gonna cut it. He should have added a zero to the 33. That would be their only hope. This piece of shit is going down in flames.

The Wall Street shysters will be telling you to buy the stock tomorrow on this wonderful news, just like they told you to buy it at $40 a few years ago.

Next up. Sears will be announcing they are closing 50 to 100 stores as they reposition themselves for long term growth. And the beat goes on.

Ghost Malls get spookier by the day.

The Blistering Recovery Continues: Week After Macy’s, JC Penney Fires 2000, Closes 33 Stores

Submitted by Tyler Durden on 01/15/2014 16:14 -05000

A week ago, Macy’s fired 2500 and announced the closure of five stores. Moments ago, the company which we have been warnings since late 2012 is a meltin ice cube that ends with bankruptcy, JCPenney, which a week ago provided the following glib summary “JCPenney reported today that the Company is pleased with its performance for the holiday period“, turns out was merely joking and just echoed the Macy’s sentiment, announcing the termination of some 2,000 jobs and the closure of 33 stores.

JCPenney today announced that as part of its turnaround efforts, the Company will be closing 33 underperforming stores across the country in order to focus its resources on the Company`s highest potential growth opportunities.

These actions are expected to result in an annual cost savings of approximately $65 million, beginning in 2014. In connection with this initiative, the Company expects to incur estimated pre-tax charges of approximately $26 million in the fourth quarter of fiscal 2013 and approximately $17 million in future periods.

Remaining inventory in the affected stores will be sold over the next several months, with final closings expected to be complete by early May. The closings will result in the elimination of approximately 2,000 positions. Eligible associates who do not remain with the Company will receive separation benefits packages. Meanwhile, the Company is continuing its plans to open a new store location later this year at the Gateway II development in Brooklyn, N.Y.

“As we continue to progress toward long-term profitable growth, it is necessary to reexamine the financial performance of our store portfolio and adjust our national footprint accordingly,” said Myron E. (Mike) Ullman, III, chief executive officer of JCPenney. “While it`s always difficult to make a business decision that impacts our valued customers and associates, this important step addresses a strategic priority to improve the profitability of our stores and position JCPenney for future success.”