It's getting cold out there, Part One

A few weeks ago, I noted an article that reported that by the end of November, there had already been a record number of commercial bankruptcies in the US, and the year wasn't even over. I also quoted from that article an economist who said he

expects a wave of retail bankruptcies in the first quarter of 2009, as struggling businesses run out of gas after hanging on for the holiday shopping season.

The intervening time has only made things look even worse. Bloomberg News reported today that

U.S. retailers face a wave of store closings, bankruptcies and takeovers starting next month as holiday sales are shaping up to be the worst in 40 years. ...

More than a dozen retailers, including Circuit City Stores Inc., Linens ‘n Things Inc., Sharper Image Corp. and Steve & Barry’s LLC, have sought bankruptcy protection this year as the credit squeeze and recession drained sales. Investors will start seeing a wide variety of chains seeking bankruptcy protection in February when they file financial reports, said Burt Flickinger.

“You’ll see department stores, specialty stores, discount stores, grocery stores, drugstores, major chains either multi-regionally or nationally go out,” Flickinger, managing director of Strategic Resource Group, a retail-industry consulting firm in New York, said today in a Bloomberg Radio interview. “There are a number that are real causes for concern.” ...

Retailers’ fourth-quarter earnings may fall 19 percent on average, the seventh consecutive quarterly decline, according to Ken Perkins, president of Retail Metrics, a Swampscott, Massachusetts-based consulting firm.

The Commerce Department says the US economy shrank at an annual rate of 0.5% in the third quarter of 2008, it's worst performance since 2001 - and economists expect it will continue to shrink for an additional three quarters. Personally, barring some massive public investment in the economy and one far bigger than what has been proposed, I think they're being optimistic.

Footnote: Flickinger said that in the long run, this is will help the retail industry.

“We’ll be going from a Dickens-esque worst of times this December to the best of times in future Decembers because we’ll rationalize out all the redundant retailers and retail space in shopping centers,” Flickinger said.

Yup. Shuttered stores, disrupted communities, bankruptcies, people losing their jobs, their incomes, their health insurance, even their homes - it's all good news if you'll only look at the long-run big picture for business. Yup, indeed.