why retailers are going bankrupt

(Image from http://www.stylefix.net/wp-content/uploads/2008/11/monopoly-bankruptcy.jpg)

Right now, many people are observing stores being shut down and having "going out of business" sales. I know, that back in my hometown in VA a few months ago, I saw a Linens n' Things store closing and having a huge sale before they went away. I am sure that you have seen other stores file for bankruptcy recently, such as Claire's, Sharper Image Inc, Mervyns, and Steve & Barry's to name a few.

I came across a website discussing such retailers going out of business, the being: http://www.zimbio.com/American+economy/articles/76/Mervyns+Linens+Things+Declare+BANKRUPTCY+File.
One thing that caught my attention in this article, was that it stated that "consumer spending, an early barometer of the economy, is down as shoppers cut discretionary spending amid fears of economic woes". It also talks about reason why these places probably went out of business.

If the retailer does not have something to differentiate itself from it's competitors then how can it succeed and triumph over competition? One reason that Linens n' Things might have gone bankrupt could be due to the fact that its prices were higher than its competition, yet the products were very similar. Perhaps if the store had offered something innovative and unique it would have drawn more consumers, yet it did not and so had closed its doors forever.

Another article that I found informative is http://www.newsneconomics.com/2008/12/hottest-trend-in-2009-declaring.html. This website talks about all the different places filing for bankruptcy and actually talks about why so many of them have to close. One thing caught my attention, and it states: "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."

This is very true, and it makes sense that once reduce their suppliers, the suppliers that get cut off will likely fail due to the fact that they are no longer necessary. The article also discusses that consumers are saving more as a result of the increased poor economy, and surely are spending less on new clothes.