The Bizz 8-01-2008

Recession or not, retailers are in trouble
Article Launched: 07/31/2008 08:39:49 PM PDT

Are we in a recession?

Experts and politicians argue this question every day. In the meantime, large retailers keep filing for bankruptcy protection.

Mervyns LLC, Shoe Pavilion Inc., Steve & Barry's LLC, Shaper Image Inc., Linens `n Things Inc., Levitz Furniture Inc., Wickes Furniture Co. and Metromedia Restaurant Group - which owns Bennigan's and Steak & Ale and Tavern restaurants - have all recently filed Chapter 7 or Chapter 11 bankruptcy documents.

Rumors are flying that Circuit City could be next.

"This is the beginning of a wave," said Harlan Platt, professor of finance and corporate-turnaround expert at Northeastern University in Boston. "In every economic boom, investor enthusiasm leads to overexpansion. In recessions and slow periods, companies on the fringe begin to fail."