ICSC doesn't report the final weekly figures until tomorrow and the full December snapshot won't come until January. Early indications are that a last-minute burst of shopping failed to materialize meaning it very likely will be another month of negative same-store sales figures.
According to ShopperTrak RCT U.S. store foot traffic fell 24 percent from a year ago in the final pre-Christmas weekend. Soon after Christmas, the Wall Street Journal did a report that retailers are bracing for major changes in the new year.
The first retail casualty of the weak holiday season could be Goody's Family Clothing Inc., a Southeast apparel retailer. The 287-store chain emerged from bankruptcy court in October but its holiday sales were below plan and financing it was counting on didn't materialize, according to a person familiar with the situation. The retailer is negotiating with lenders to avoid potential liquidation, say two people familiar with the matter.
A representative for Goody's was unavailable to comment. But in October, Chief Executive Paul White was upbeat about its prospects, saying "we are energized by the opportunity in front of us and are focused on continuing to fulfill the Goody's mission."
Other retailers are saying they will trim inventory and reduce the number of suppliers. That, in turn, will cause a ripple effect, prompting a number of weaker manufacturers, small brands and underfunded fashion labels to fail. New retail formats and concepts stores are likely to be curtailed in the coming year. And luxury-goods makers already are working to cut the long lead times between orders and store delivery as a way to reduce risk.
"We will have a lot fewer stores by the middle of 2009," says Nancy Koehn, professor of business administration at Harvard Business School. "It's happening very, very quickly because of the financial crisis and the recession."