An avalanche, I tell you.

A couple of business article caught my attention this morning.

First, there is this article from the Chicago Sun-Times;

Avalanche of store closings coming, study says.
August 26, 2009
BY SANDRA GUY

"As many as 10,000 retail stores will close nationwide this year, led by clothing stores, electronics and food-and-beverage stores, and department stores, in that order, a study released Tuesday shows.

If the forecast holds, the store closings this year will be nearly double that of last year, when store closings stood at 5,100, said Sandra Reese, a principal at Grant Thornton LLP's offices in Chicago. Last year, the biggest store closings occurred in electronics, followed by home improvement-furnishings stores and in third place, apparel stores..."

"...clothing-store closings are expected to soar 270 percent, to 3,000 store closings this year from a year ago, while department store closings are expected to increase 61 percent, to 422, this year.

Though bookstores represented only a fraction of the total, their closings are forecast to jump 500 percent from last year, to 400 stores.

The only store category that is forecast to close fewer stores is home improvement, where store closings are projected to decline 57 percent, to 480 stores this year."

Those are some eye-popping statistics.

Twice as many store closings.

Clothing store closings 270%

Bookstores closings 500%

Furniture and home improvement (which had it's biggest avalanche last year) closings 57%.

**********

Speaking of bookstores, Borders announced their earnings. (From ICV2).

Sales Decline Accelerates at Borders
$45 Million Loss
Published: 08/25/2009 01:27pm

"Borders Group reported a $45.6 million loss from continuing operations in its second quarter (ending August 1) on sales down nearly 18%. Borders same store sales were down 17.9%; Waldenbooks sales were down 10.8%; total consolidated sales were $616.8 million, down 17.7%. A big chunk of the losses came from various adjustments, many related to the company’s restructuring.

Borders CEO Ron Marshall attributed the tough quarter to the costs of reducing inventory in Borders’ weak categories (CDs and DVDs among them) and increasing inventory and emphasis in stronger categories (e.g., its additions of toys and games in the kids department, see “Borders Adds Toys and Games”).

The sales decline was worse on a year over year basis than it was in Q1 (see “Sales Decline 12% at Borders”). Barnes & Noble sales were also down by a greater percentage in Q2 than in Q1, although at much lower percentages (see “Barnes & Noble Sales Slip 5%”).

The amount of inventory reduction, $208 million, vs. the year ago period was roughly consistent with where it was at the end of Q1."

It appears to me that Borders is doing exactly the thing I was warning about a few days ago.

Things aren't working well, so they're making radical changes.

The time to make changes is when things are going well. The time to burnish your core business is when things are going wrong. They're doing the opposite.

They're correct that they need to change their business model, but -- from all accounts -- their bookshelves are looking skimpier and skimpier while they open 'new' concept stores and bring in outside product. (toys?!)

It's as if you really hated your job, and you hear they're hiring on the other side of the country, so you pack the spouse, the two kids and the dog in your old beater, and take off.

You get halfway across the country before your car breaks down at a rest stop and the next thing you know you are on the corner with a cardboard sign saying, "Must feed kids and dog."

As unpleasant as it may seem, the better thing to do would be to stick to your bad job, cut back in everything else you do, try to save a little ahead.

If worse comes to worse and you lose your job, at least you are in familiar territory, don't have to move in the middle of a crisis, and can make use of available help.

It looks to me as those Borders zigged with it should have zagged, and is now zagging when they should be zigging.

(Don't you hate it when I use technical terms?)