Horrendous Holiday Sales Likely to Force 73,000 Stores to Close in the First Half of 2009

U.S. retailers did not get the Christmas miracle that they were hoping for, with holiday sales shaping up to be the worst in four decades. Retailers now face a rash of store closings, bankruptcies and takeovers beginning in the early new year.

According to the International Council of Shopping Centers, retailers may close an astounding 73,000 stores in the first half of 2009 alone. Talbots Inc. (NYSE: TLB) and Sears Holdings Corp. (NasdaqGS: SHLD) have already revealed that they will be closing down under-performing locations.

Dozens of retailers have sought bankruptcy protection this year as the credit crisis and recession dramatically cut sales. Amongst those who have already filed for bankruptcy protection are Linens n' Things Inc., Sharper Image Corp. (OTC: SHRPQ.PK), Circuit City Stores Inc. (OTC: CCTYQ.PK), and Steve & Barry's LLC.

Burt Flickinger, managing director of Strategic Resource Group, a retail industry consulting firm in NYC, warns that investors will begin seeing a wide variety of retail chains seeking bankruptcy protection in February when they file financial reports:

“You’ll see department stores, specialty stores, discount stores, grocery stores, drugstores, major chains either multi- regionally or nationally go out. There are a number that are real causes for concern," he said in an interview with Bloomberg Radio on Monday.

Utilizing data from the U.S. Bureau of Labor Statistics, the ICSC predicts that 148,000 stores will close in 2008, which would be the largest number since 151,000 closings in 2001 during the last recession. The total number of retail stores will decline by 3 percent this year, also taking into account new locations that were opened this year. An additional 73,000 stores are anticipated to shut their doors in the first half of 2009, said the ICSC.