New York City The financial and retail communities are bracing themselves for more bad news on Wednesday when retailers will report their monthly sales for September. The expected dismal reports for a key month raise even more concerns for the holiday season and could mean even more stores closing amid deteriorating economic conditions, the Associated Press reported.
Burt P. Flickinger III, managing director of Strategic Research Group, said he now expects about 1,000 to 1,500 stores will close in the two months after Christmas, up from his original estimate of 200 to 300 stores, he told the AP. He now predicts retailers will shutter 5,000 to 10,000 stores from now until the end of 2010, up sharply from his earlier estimate of 1,500 to 2,500.
"September is normally a strong month, so it is going to be a train wreck for retailers for the holiday season," Flickinger said.
The deteriorating picture is forcing Wall Street analysts to cut their earnings forecasts for merchants for the second half of the year, particularly on those with mall-based stores. Adrianne Shapira, a retail analyst at Goldman Sachs, wrote in a note released Monday that she's reducing her second-half 2008 earnings estimates by an average of 3% across 12 of the 23 retailers she tracks, with a heavy emphasis on department stores.