About 220,000 stores may close this year in America, says our guest, retail consultant Howard Davidowitz of Davidowitz & Associates.
As more Americans save and spend less, it’s clear there’s too much retail space. Just visit Web site deadmalls.com and track retail’s growing body count. And luxury retailers? They’re on “life support,” Davidowitz says.
Among the brandname stores Davidowitz says are in trouble:
- Nordstrom
- Neiman Marcus
- Tiffany
- Jeweler Zale Corp.
- Saks
- J.C. Penney
- Sears
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Posted Feb 19, 2009 11:58am EST by Tech Ticker
Source: Yahoo Finance
“Worst Is Yet to Come:” Americans’ Standard of Living Permanently Changed
There’s no question the American consumer is hurting in the face of a burst housing bubble, financial market meltdown and rising unemployment.
But “the worst is yet to come,” according to Howard Davidowitz, chairman of Davidowitz & Associates, who believes American’s standard of living is undergoing a “permanent change” – and not for the better as a result of:
- An $8 trillion negative wealth effect from declining home values.
- A $10 trillion negative wealth effect from weakened capital markets.
- A $14 trillion consumer debt load amid “exploding unemployment”, leading to “exploding bankruptcies.”
“The average American used to be able to borrow to buy a home, send their kids to a good school [and] buy a car,” Davidowitz says. “A lot of that is gone.”
Going forward, the veteran retail industry consultant foresees higher savings rate and people trading down in both the goods and services they buy – as well as their aspirations.
The end of rampant consumerism is ultimately a good thing, he says, but the unraveling of an economy built on debt-fueled spending will be painful for years to come.
Posted Feb 17, 2009 12:53pm EST
Source: Yahoo Finance