Blog 4

Since our country has entered a recession many retail stores have felt the effects. Some stores are even filing bankruptcy and going under because of the hard times. Stores like Circuit City, Linen n’ Things, and Sharper Image are filing bankruptcy and closing their doors and lying off workers. Which whenever a company use to file bankruptcy it was pretty much like them going into rehab, where they could regroup and relaunch the company. However, that is not the case for stores going bankrupt right now. People feel that as long as it takes for creditors and borrowers to hash out all the finances most companies find it easier to just shut down and move on. With credit and home equity loans in crisis more people have to pay with cash and thus the consumer spending is settling on a low plateau. Also with the credit being so bad more stores have to go towards liquidizing in order to save the business or even some money.
If stores aren’t filing Chapter 11 they are closing unproductive stores in areas that struggling, stores such as Cache, Macy’s and even Home Depot. Which I find shocking about Home Depot closing some of its doors because during a time of a recession more people are willing to do things themselves such as do it yourself home improvements then hiring a contractor to do the work for you. Also businesses such as hair salons, car maintenance, and restaurants are taking a big hit. Why go to get your hair do, you oil changed, or have your food served to you when you can do all of that stuff for yourself at home for cheaper? Well when it comes to retail it will take a hit a little less hard then these stores. Most people cannot actually make fabrics nor have the time to make clothes themselves. However, instead of splurging those people are going to spend less on clothes and just get the necessities or staple items.
If this recession continues to be so bad people might even become desperate enough to buy their own fabrics and make their own clothes. Until that time retailers are going to have to step up their game and realize that people are looking for certain things such as comfort, quality, and staple pieces. Also another way for certain retailers to make some money in this recession is to add accessories and shoes at a decent cost to offset the decrease in clothing sales.

http://www.slate.com/id/2209406/
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