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A Skinny Economy Signals Store Closures for Macy's

By Nikki Weingartner     Jan 8, 2009 in Business
The tally is in for many retailers across the nation and the numbers are looking rather bleak. As many companies relied upon December sales to provide some respite in today's plummeting economy, reports show it just didn't happen.
Major retail chains across the nation are usually sitting back this time of year calculating the amount of gains seen by holiday and post-holiday shoppers. Even when a shopping season is bleak, most retailers can rely on the holiday to recoup some of their losses.
However, it seems as though this year, the outcome is as bankrupt as the majority of people across the globe.
On Thursday, major chain retailers released their monthly "same-store sales" report, which is an indicator of a retailer's performance in sales for stores who were open for a time period of at lease a year, as explained in a money report on CNN.
Financial analysts missed their predicted 2.8 percent gain, with the nation's largest retailer, Wal-Mart Stores, seeing a 1.7 percent increase in sales. The sluggish growth in sales did not include fuel costs for the company. Wal-Mart's warehouse division, Sam's Club, saw a scant 0.1 percent increase. Compare these numbers to last year's 2.6 percent and 1.3 percent growth during the same time period and its a pretty safe assumption that people did not spend their money this year.
"Due to the difficult economy and severe winter weather in some regions, the holiday season was more challenging for retailers than expected," Eduardo Castro-Wright, vice chairman of Wal-Mart Stores, said in a statement.
Other losers:
Sears (SHLD, Fortune 500) logged a 7.3% drop
Macy's (M, Fortune 500) reported a 4% drop
Limited Brands (LTD, Fortune 500), owner of Victoria's Secret and Bath & Body Works chains, tumbled 10%
Gap (GPS, Fortune 500) sales fell 14%
For some, inclement weather was listed as one of the reasons for the severe decline. However, for retailers like Sears who rely heavily on the housing market, the financial crisis and customer credit problems were said to play a major factor in the plummet.
Despite the bleak proof, retailers continue to show public optimism and are hoping to make up some of those losses. Still, the two largest shopping months of the year which account for nearly half of these retailer's profits proved fatal for many with November's report showing the worst overall decline in sales since the report was initiated.
So it doesn't appear that the major discounts and incentives did the job for the big guys. Hardest hit seems to be Macy's, who released today that it was closing 11 of its stores across the nation, putting nearly 1,000 workers out of a job.
Macy's Inc. said Thursday it will close 11 underperforming stores in nine states _ affecting 960 employees
The good news is that clearance sales start next week and that is new for the upscale retailer.
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