While industry executives and shoppers will remember 2008 as the year the party ended, figure 2009 to be the year of the hangover. Already, Circuit City, Linens 'N Things and Mervyn's stores are going away. Sharper Image is too, though the company will continue to sell some of its high-end gadgets through license agreements with other retailers.
More pain is on the way. One-third of U.S. women recently surveyed by America's Research Group said they plan no clothing purchases--none--in 2009. Normally, it's just 4%. That means the market is still far too saturated with stores.
Expect closings to rattle the likes of Lane Bryant, Gap, and Starbucks. It's the inevitable counterpunch to the days of retailers fighting hand over fist for market share during an era of loose credit and minuscule interest rates.
Those days are over, probably for a long time. While accelerating unemployment will only last so long, consumers' debt loads and credit access don't figure to recover to pre-party levels for quite awhile.
"I don't think we will live the same way for 10 years," says Howard Davidowitz, chairman of New York-based retail consultant and investment bank Davidowitz & Associates. "People are so scared they're starting to save."
Retailers at risk in 2009, he thinks, include outerwear specialist Eddie Bauer and teen-apparel-seller Pacific Sunwear, along with Zales, the big jewelry chain. All three shuttered at least 8% of their U.S. stores last year, with many more closings expected. The same is largely true of Charming Shoppes, the owner of Lane Bryant, Catherine and Fashion Bug, which closed 150 stores last year. With a mountain of debt and losses totaling more than $260 million during the most recent 12-month reporting period, the company will close another 100 locations this year. Chief Financial Officer Eric Specter insists there is no cash squeeze, pointing out that the bulk of the company's debt isn't due until 2014. "We will have no problems meeting our obligations," he says.
Another possible casualty: Sears Holdings, operator of Sears and Kmart stores. A key to hedge fund manager Eddie Lampert's 2005 merger of the two chains was in the underlying real estate. But with those values down 30% or so since then, slumping sales hit even worse.
"I'd be surprised if Sears-Kmart makes it through the year," says Britt Beemer, who runs retail market-research firm America's Research Group.
Non-apparel specialists like Starbucks and Sprint Nextel won't be going away, but they will close hundreds more stores during the coming year, Davidowitz predicts. Narrow specialties (Sprint's cellphones) and high prices (Starbucks' coffee) are tough sells as the consumer mood turns thrifty. What plagues Starbucks will also affect other upscale goody chains like Mrs. Fields' Cookies, and causal dining outlets like Applebee's and Cheesecake Factory. Any of the neighborhood outlets for those restaurant chains could be a casualty this year. For too many customers now, it's McDonald's or bust.
Davidowitz doesn't think a huge government stimulus will help. Better to let things bottom out naturally before regrouping. "Obama's plan will make it worse," he says. "We got into this by borrowing and stimulating, now he wants to borrow and stimulate more."
all credits goes to yahoo.com
Saturday 24 January 2009
Regulators close 1st Centennial Bank in California.. taken from yahoo.com
WASHINGTON (AP) -- Regulators on Friday shut down 1st Centennial Bank in California, the third U.S. bank to fail this year.
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BAC 6.24 +0.53
Chart for BK OF AMERICA CP
{"s" : "bac","k" : "c10,l10,p20,t10","o" : "","j" : ""}
California regulators closed the Redlands-based bank and appointed the Federal Deposit Insurance Corp. as receiver. 1st Centennial had assets of $803.3 million and deposits of $676.9 million as of Jan. 9.
The FDIC said 1st Centennial's insured deposits will be assumed by First California Bank, based in Westlake Village, Calif. Its six branches will reopen Monday as offices of First California.
The agency said patrons of 1st Centennial will continue to have full access to their deposits.
Regular deposit accounts are insured up to $250,000.
First California also will buy about $293 million of the failed bank's assets; the FDIC will retain the rest for eventual sale.
The FDIC estimated that the resolution of 1st Centennial will cost the federal deposit insurance fund $227 million.
1st Centennial was the third federally insured bank to fail and be shuttered by regulators this year amid the pressures of tumbling home prices, rising mortgage foreclosures and tighter credit. It's expected that many more banks won't survive this year's continued economic tumult, and some may have to merge with other institutions.
Twenty-five U.S. banks succumbed last year, far more than those that failed in the previous five years combined. Only three failed in 2007.
Regulators in November closed two big thrifts -- Downey Savings and Loan Association and PFF Bank & Trust -- based in Southern California, an area of the country that's been battered by the mortgage and housing crises.
Since October, the Treasury Department has been using most of the first half of the $700 billion federal bailout fund to buy stock in banks and other financial institutions, with the idea that cash injections will spur banks to get lending again.
Last week, the government extended a new multibillion-dollar lifeline to the country's biggest bank by assets, Bank of America Corp., providing an additional $20 billion in support from the bailout fund on top of the $25 billion it previously received.
The Treasury, the Federal Reserve and the FDIC also agreed to participate in a program to provide guarantees against losses on about $118 billion in various types of loans and securities backed by the bank's residential and commercial real estate loans.
High-level officials in Washington are trying to find the best way to prod banks into lending more money, reaching for a solution 18 months after the most severe credit crisis in decades sent investors fleeing. U.S. officials have been discussing the notion of establishing a new government-backed bank to remove bad loans and other toxic assets from banks' balance sheets. In theory, with those assets gone, banks would be freer to make more loans.
This week the House voiced bipartisan anger over the bailout program, demanding more prudent spending of the remaining $350 billion with tighter oversight. President Barack Obama said Friday that any legislation governing the use of the second half of the money must include new measures to ensure accountability and transparency.
Seattle-based thrift Washington Mutual Inc. failed in late September, the biggest bank collapse in U.S. history. It had $307 billion in assets.
The FDIC estimates that through 2013, there will be about $40 billion in losses to the deposit insurance fund, including an $8.9 billion loss from the failure of IndyMac Bank last July. The agency has raised insurance premiums paid by banks and thrifts to replenish its fund, which now stands at around $34.6 billion, below the minimum target level set by Congress and the lowest level since 2003.
The FDIC has in place a program to guarantee as much as $1.4 trillion in U.S. banks' debt for more than three years as part of the government's financial rescue plan. Under the program, which is meant to thaw the freeze in bank-to-bank lending, the FDIC is providing temporary insurance for loans between banks, guaranteeing the new debt in the event of payment default by the borrowing bank.
Of the roughly 8,500 federally insured banks and thrifts, the FDIC had 171 on its confidential list of troubled institutions as of Sept. 30 -- a nearly 50 percent jump from the second quarter and the highest tally since late 1995.
1st Centennial customers with questions can call the FDIC at 800-822-1918.
all credits goes to yahoo.com
Related Quotes
Symbol Price Change
BAC 6.24 +0.53
Chart for BK OF AMERICA CP
{"s" : "bac","k" : "c10,l10,p20,t10","o" : "","j" : ""}
California regulators closed the Redlands-based bank and appointed the Federal Deposit Insurance Corp. as receiver. 1st Centennial had assets of $803.3 million and deposits of $676.9 million as of Jan. 9.
The FDIC said 1st Centennial's insured deposits will be assumed by First California Bank, based in Westlake Village, Calif. Its six branches will reopen Monday as offices of First California.
The agency said patrons of 1st Centennial will continue to have full access to their deposits.
Regular deposit accounts are insured up to $250,000.
First California also will buy about $293 million of the failed bank's assets; the FDIC will retain the rest for eventual sale.
The FDIC estimated that the resolution of 1st Centennial will cost the federal deposit insurance fund $227 million.
1st Centennial was the third federally insured bank to fail and be shuttered by regulators this year amid the pressures of tumbling home prices, rising mortgage foreclosures and tighter credit. It's expected that many more banks won't survive this year's continued economic tumult, and some may have to merge with other institutions.
Twenty-five U.S. banks succumbed last year, far more than those that failed in the previous five years combined. Only three failed in 2007.
Regulators in November closed two big thrifts -- Downey Savings and Loan Association and PFF Bank & Trust -- based in Southern California, an area of the country that's been battered by the mortgage and housing crises.
Since October, the Treasury Department has been using most of the first half of the $700 billion federal bailout fund to buy stock in banks and other financial institutions, with the idea that cash injections will spur banks to get lending again.
Last week, the government extended a new multibillion-dollar lifeline to the country's biggest bank by assets, Bank of America Corp., providing an additional $20 billion in support from the bailout fund on top of the $25 billion it previously received.
The Treasury, the Federal Reserve and the FDIC also agreed to participate in a program to provide guarantees against losses on about $118 billion in various types of loans and securities backed by the bank's residential and commercial real estate loans.
High-level officials in Washington are trying to find the best way to prod banks into lending more money, reaching for a solution 18 months after the most severe credit crisis in decades sent investors fleeing. U.S. officials have been discussing the notion of establishing a new government-backed bank to remove bad loans and other toxic assets from banks' balance sheets. In theory, with those assets gone, banks would be freer to make more loans.
This week the House voiced bipartisan anger over the bailout program, demanding more prudent spending of the remaining $350 billion with tighter oversight. President Barack Obama said Friday that any legislation governing the use of the second half of the money must include new measures to ensure accountability and transparency.
Seattle-based thrift Washington Mutual Inc. failed in late September, the biggest bank collapse in U.S. history. It had $307 billion in assets.
The FDIC estimates that through 2013, there will be about $40 billion in losses to the deposit insurance fund, including an $8.9 billion loss from the failure of IndyMac Bank last July. The agency has raised insurance premiums paid by banks and thrifts to replenish its fund, which now stands at around $34.6 billion, below the minimum target level set by Congress and the lowest level since 2003.
The FDIC has in place a program to guarantee as much as $1.4 trillion in U.S. banks' debt for more than three years as part of the government's financial rescue plan. Under the program, which is meant to thaw the freeze in bank-to-bank lending, the FDIC is providing temporary insurance for loans between banks, guaranteeing the new debt in the event of payment default by the borrowing bank.
Of the roughly 8,500 federally insured banks and thrifts, the FDIC had 171 on its confidential list of troubled institutions as of Sept. 30 -- a nearly 50 percent jump from the second quarter and the highest tally since late 1995.
1st Centennial customers with questions can call the FDIC at 800-822-1918.
all credits goes to yahoo.com
Thursday 22 January 2009
Sunday 23 December 2007
the marketing pond
Do you feel like You are Drowning in a lake of bills? Every time you turn around someone is charging you a fee? The New Generation is here...... EVERYTHING FREE! http://www.marketingpond.com/ref.cgi/33049/
Sunday 7 October 2007
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