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Who'll Go Bankrupt Next?

Circuit City, Linens 'n Things, and Levitz are all victims of the economic crisis - and the question in everybody's mind is: who's next?

Yahoo! Finance has a somber article about 15 companies that are in such
precarious financial conditions that they might not survive 2009. For example:

Sbarro. (Privately owned; about 5,500 employees). It's not the pizza that's the problem. Many of this chain's 1,100 storefronts are in malls, which is a double whammy: Traffic is down, since consumers have put away their wallets. Sbarro can't really boost revenue by adding a breakfast or late-night menu, like other chains have done. And competitors like Domino's and Pizza Hut have less debt and stronger cash flow, which could intensify pressure on Sbarro as key debt payments come due in 2009.

Krispy Kreme. (KKD; about 4,000 employees; stock down 50%). The donuts might be good, but Krispy Kreme overestimated Americans' appetite - and that's saying something. This chain overexpanded during the donut heyday of the 1990s - taking on a lot of debt - and now requires high volumes to meet expenses and interest payments. The company has cut costs and closed underperforming stores, but still hasn't earned an operating profit in three years. And now that consumers are cutting back on everything, such improvements may fail to offset top-line declines, leading Krispy Kreme to seek some kind of relief from lenders over the next year.

http://finance.yahoo.com/news/15-Companies-That-Might-Not-usnews-14279875.html


where are these malls with no shoppers? my daughter and i went to the mall this weekend, we could hardly get a parking space and traffic was backed up going into the mall. this was columbiana center in columbia, sc. i don't see the missing shoppers. where are they?
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Krispy Kreme pulled all their stores in the Houston area in 05 citing franchise issues too. I've been bugging them why they hadn't had new franchises reopen in the fourth largest city in this country and they couldn't answer that. No wonder they're losing money. It's one thing to pare down operations but completely pull out of markets, especially large ones, seems ridiculous. And we all loves us our fried breads down South. It pains me to think I wouldn't be able to get those sinfully good little rings when I travel to Krispy Kreme friendly areas.
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You have to wonder about the companies going bankrupt. In Canada, I've shopped at Linens ‘n Things a few times - their prices are outrageous! I mean, I went looking for spatulas and other kitchen utensils and they were the platinum versions - I mean, $30.00 for a spatula to flip an egg that I could buy for the cheap at a dollar store or for a few dollars more at a Wal-Mart/Zellers or other department store.

Yes they may have sold quality products - but so many of these types of stores opened up because the competitors opened similar shops.

There is a limit to quality - why would I spend $500+ on a bed-in-the-bag set when you can find comparable quality for less at Sears?

Radio Shack was the same story - their prices were crazy. I worked there for a few years, and remember buying one of those 32k data bank thingies. The cost of the item was around $20.00 at the time, but they were selling it for over $100.00. Yes, I understand that they need to make a profit but their prices were always 30% or more than everyone else in town for the same item (I'm thinking things like TV, DVD/VCR etc.,).

I feel bad for those that lose their jobs when these companies go bankrupt, but had they (the company) better thought out their business plan and had done some additional market research then they could have spared themselves the cost of launching some of their ventures and concentrated more on their primary product lines or stores.

One company I worked for when I started in IT divested themselves of all their non-core holdings - they were a gas company that had holdings in plastics, chemicals and even some odd ball industries!

They survived, and thrived!

Mo
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Claire's laid me off last month when they closed the two stores I worked in. Two days ago, 44 DMs were laid off. Best job I ever had, and I was looking forward to many more years with them.
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@ skidworth: You're in Columbia, SC? So am I - and while I would completely agree with you about Columbiana Center (actually I stay away from it because the whole area is TOO congested), I wonder if you've checked out Richland Mall lately - I was there this past Sunday and even after the stated opening time, of the woefully few stores still left only Barnes & Noble even bothered opening ... very eerie. As I recall, the last time I was at Dutch Square it was pretty darned empty, too. Those dying companies are definitely around, I think ...

(and I've just gotta say, of the companies on that yahoo list the only one I'd truly mourn would be Krispy Kreme; I don't go there often but man, there are some times you just NEED one of their doughnuts!)
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@Dave: How insightful & on-topic, tell us more! So tired of the Haters.

Now, on that list can Blockbuster really claim it's all due to the economy? They were too slow & stupid to adapt to the times, let alone survive much longer regardless of any other factors. Kinda sucks to think Six Flags could go under, so many good times had at the one in Maryland. If they last through this Summer I'll be sure to take my nephew, just in case it's the last time.
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All these companies expanded too fast, bought out my favorite stores and closed or forced out locally run family owned stores, and carried crap merchandise for years.

No sympathy.
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I am still waiting for krispy kreme to come to my town. We used to have a Winchell's but now it's just generic donut shops with names like Happy Donut, owned by the same family that has a manicure shop and a dry cleaners next door.
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