The drunken party is over, now it’s time for the hangover, and for some, a couple of cups of coffee might not be available anyway. Starbucks, the former darling of Wall Street, is closing up to 600 stores. [UPDATE: STARBUCKS PLANS TO CUT AN ADDITIONAL 1,000 HOME OFFICE STAFF] Circuit City, Linens ‘N Things, The Sharper Image, and Mervyn’s stores have also been thrown out of the bar. Clothing retailer Goody’s is shuttering several hundred stores, and a recent report in Forbes (the link doesn’t want to work so here’s the URL: http://www.forbes.com/2009/01/20/retail-bankruptcy-economy-biz-commerce-cx_tvr_0120closings_slide.html?thisSpeed=15000) highlights a boatload of retailers that are struggling. Most are examining their income statements and balance sheets, realizing that they operated on the premise that the good times never end. That’s a fatal strategy.
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.