Chapter 11 fever

Bankruptcies. Store closings. Downsizing. The dawn of 2001 saw a large and painful shakeout in the large-retailer market. From Bradlees and Montgomery Ward’s filing for protection to J.C. Penney, Sears, and OfficeMax cutting their losses, this year’s retail climate is unlike any in recent years, according to The New York Times.

Strong chains–Wal-Mart, Gap, Target–will benefit from the reduced competition and the opportunity to score inexpensive retail space from landlords desperate for tenants. But those stores with bankruptcy looming on the horizon might want to file for Chapter 11 earlier rather than later. More stores going under means more going-out-of-business sales, which depress the values of everyone’s inventories.

Photo © 2001 PhotoDisc.

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