Brian Koerber and Jim Perez are the kind of shoppers bankrupt retailers love and solvent chains these days seek to entice.
Both shoppers walked out of Steve & Barry's discount clothing store at Century III Mall this week with bags of deals, courtesy of the Port Washington, N.Y., chain's going-out-of-business sale.
"It absolutely impacts where I'm shopping, with a sale like this," said Koerber, 33, of South Park. "You can't beat the deals. For $20, I got two pairs of jeans and three T-shirts."
With a week left until Christmas, retailers are doing all they can in an ailing economy to entice consumers with half-off or buy-one-get-one offers. But with bankrupt retailers such as Steve & Barry's, Circuit City, Linens 'n Things and Whitehall Jewelers hoping to dump as much merchandise as quickly as possible this season, solvent stores have an additional challenge, experts say.
"The bankruptcies are impacting other retailers tremendously," said Howard Davidowitz, chairman of retail consultant/investment bank Davidowitz & Associates Inc. of New York.
"Look at Bed Bath & Beyond. It's really being hurt by Linens 'n Things' bankruptcy, but the impact is for the short-term. Next year, Linens 'n Things will be gone."
Shoppers are waiting to make purchases, particularly when dealing with bankrupt retailers. They know that as the time nears for the doors to close forever, the markdown percentages increase.
"This is my third time shopping (the liquidation sale) at Linens 'n Things," said Angie Bedilion of Greensburg, as she entered the store Tuesday at Greengate Centre in Hempfield.
"I came here with my Mom because I was interested in a chair cushion, but it was only 10 percent off. I waited and finally bought it for half off, which I felt was a good price." Bedilion was back yesterday to check out some some exercise equipment.
While retail bankruptcies aren't unique, so many store chains selling off all of their inventory weeks or even days before year's end is somewhat out-of-the-ordinary, experts said.
The economic downturn has caused many consumers to pull back on spending, and for some retailers on the edge, even the prospect of increased holiday revenues couldn't fend off going-out-of-business sales. No fewer than 15 major retail chains filed for bankruptcy in the year's third quarter alone, including Circuit City and Linens 'n Things.
"The liquidation sales definitely are taking consumers away from solvent retailers," said George Whalen, president of Retail Management Consultants of San Marcos, Calif. "Linens 'n Things definitely is impacting Bed Bath & Beyond's sales, and Circuit City is impacting Best Buy."
The latest major retailer to seek U.S. Bankruptcy Court protection and hang huge going-out-of-business signs is KB Toys. The company is in its second trip to bankruptcy in four years.
KB Toys, which operates some 460 stores, has said it will try to find a buyer for its wholesale distribution unit as it conducts going-out-of-business sales.
Carol Dailey of Munhall wasn't aware KB Toys was closing until she got to the Century III store this week, saw the signs and enjoyed the 30 percent markdown.
"I didn't know they were closing until I got here, but I found some really good deals," Dailey said.
KB Toys, which started in 1922 as a family-owned business, previously filed for bankruptcy protection in 2004 and emerged one year later after selling itself to Prentice Capital Management Inc.
Bankruptcy sales notwithstanding, the overall tenor this holiday shopping season is, in a word, "horrendous," Davidowitz said. "We'll close 8,000 stores this year and 12,000 stores next year," he said. "Business is terrible."
The longtime retail watcher sees no quick solutions to the downturn and subsequent bankruptcy filings. "We have exploding consumer debt and exploding unemployment," Davidowitz said. "The consumer never has been in this much debt before."
Both Whalen and Davidowitz believe a number of other retailers will be hoisting liquidation sale signs after totaling their holiday sales.
"We'll see a significant number of retailers going out of business in February and March," Whalen said.
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