![]() It expects that earnings for 2009 will be below the current fiscal year. 31.Ĭhildren's clothing chain Gymboree is cutting salaries by up to 10 percent for senior management and corporate staff to prepare for what it believes will be a deepening spending slump. "We believe that the environment for consumer spending is likely to get worse before it gets better," said Brad Anderson, chief executive of Best Buy - which has seen little benefit so far from the bankruptcy of Circuit City, its largest rival, which is closing more than 150 of its approximately 700 U.S. The nation's largest consumer electronics chain also said its third-quarter profits skidded 77 percent. In a sign of how grim the future looks for consumer spending, even fairly healthy companies are making big shifts in their plans in order to respond to the deteriorating climate.īest Buy announced Tuesday it will slash capital expenditures by half in 2009 and will offer voluntary severance packages to virtually all its 4,000 corporate employees. I covered my bases," said Reed, who said she bought for fewer people this year, spending $2,000 instead of last year's $3,000. Reed says she and her husband have secure jobs, but she's worried about the overall economy. Kerri Reed, 34, a Lyndhurst, N.J., hairdresser who was outside Macy's flagship store in Manhattan on Wednesday with her husband, a police officer, and their two boys, 8 and 11, said she finished her shopping and doesn't plan to go back after Christmas. 31, and may have to "significantly curtail" its business or pursue other options. Finlay Fine Jewelry Corp., which operates stores such as Bailey Banks & Biddle, warned Wednesday it may not have enough cash to finance its operations through the end of its fiscal year Jan. Circuit City and KB Toys have filed for Chapter 11 bankruptcy protection in recent weeks. "This is more about survival."īut the casualties from the holidays are rising. "The retailers are doing everything possible to be lean and clean by the end of Christmas, because the shoppers are not going to be there" in January, said New York-based retail consultant Walter Loeb. Penney featured 300 early morning specials on items from pajamas to handbags. Many retailers are in panic mode as they try to liquidate inventory in a season that's expected to show the first drop in sales in nearly 40 years.įor the last weekend before Christmas, Sears stores offered up to 70 percent off on fine jewelry and up to 60 percent off on outerwear, while Macy's dangled early morning discounts of up to 75 percent. ![]() What's worse, the industry expects a rise in returns after the holidays as shoppers seek to convert their unwanted gifts to much-needed cash as they struggle with rising layoffs, tightening credit and shrinking retirement funds. ![]() But January and beyond looks scarier for even relatively healthy merchants as the passing of the holidays give shoppers no reason at all to spend. NEW YORK - Retailers are accelerating their use of survival tactics - slashing prices further and pulling merchandise off shelves to send to liquidators - as the number of holiday shopping days dwindles. ![]()
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