Republicans Continue to Fight Against the Unemployed

For some reason, the Republican Party continues to fight against Obama's legislation at all costs. This week, the push has been to oppose the bill that would extend unemployment benefits to millions of Americans who are preparing to see them end.
I am admittedly shocked that the Republican Party would be so stubborn as to brand itself as the political party that hates the unemployed. In fact, there are some Republican leaders who've argued that extending unemployment benefits reduces the incentive for the unemployed to go out and find work. That's simply amazing.

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Retailers That Will Dominate Store Closings

Macy's

Macy's recently closed ten stores. For the November/December holiday season, same-store sales fell over 7%. Macy's still has more than 340 stores and more than 175,000 employees. The retailer will probably need to cut another ten to twenty stores if the first quarter is worse than the holidays.

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Retailers That Will Dominate Store Closings

Which Will Chop Locations?

Several estimates from retail analysts predict that tens of thousands of retail outlets will close this year. Some put the number as high as 70,000 in the first half of 2009. The largest fifteen or twenty retailers will chop locations, not go out of business. But, they won't be able to keep the doors of all their operations open.

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24/7 Wall St.'s predictions of retailers that will dominate store closings.

Retailers That Will Dominate Store Closings

Sears

Sears owns K-Mart and Sears stores. In December, K-Mart reported relatively flat sales, but same-store sales for Sears were off almost 13%. If Sears wants to have positive earnings, it can't carry that kind of baggage. The company has nearly 4,000 full-line and special item outlets. Sears has 337,000 employees worldwide. It is certainly possible that Sears would cut 200 or 300 locations which could mean the loss of 7,000 or more jobs.

Retailers That Will Dominate Store Closings

GAP & Old Navy

GAP turned in stunningly poor holiday results. Same-store sales were off 14% for December. The company cut earnings forecasts. The firm's Old Navy brand was hit hard as it has been all year. Same-store sales at the unit were off 16%. Gap has 3,100 stores worldwide. Closing Old Navy is still a real option, especially if the retail environment gets worse. Old Navy accounts for a about a third of Gap's sales. If it is closed, 30,000 people could lose their jobs

Retailers That Will Dominate Store Closings

Nordstrom

Nordstrom had about as bad a December as any other large retailer. Same-store sales were down almost 11%. Nordstrom said it would not hit its earnings guidance. The firm has 166 stores and 55,000 workers. If same-store sales drop 15% this quarter, it is not hard imagining that twenty stores would close and 5,000 people could be laid off.

Retailers That Will Dominate Store Closings

Abercrombie & Fitch

Abercrombie & Fitch same-store sales were off 24% in December. If the number begins to run above 30%, Wall St. has to ask if the company is even viable. ANF has 1,000 stores and an extended bad period would certainly mean 100 or more of those would be shuttered.

Retailers That Will Dominate Store Closings

Zale's

Zale's same-store sales dropped 22% in December. That drop was more extreme than November's which was 13%. Zale trades at $3 and has lost 90% of its market cap over the last year. The stock trades at a level where a number of investors believe it will go bankrupt. That would put more than 1,000 stores and over 15,000 jobs at risk.

Retailers That Will Dominate Store Closings

Tiffany's

Tiffany's is having a harder time than many retailers because sales of luxury goods tend to be hit hard in a deep recession. Fourth-quarter domestic same-store sales are expected to be down as much as 35%. International sales are also expected to drop. The company has 184 stores almost 9,000 people. Could Tiffany have to cut stores and personnel by 15%? Definitely.

Retailers That Will Dominate Store Closings

Signet Jewelers

Signet Jewelers had a same-store sales drop of almost 16% in the fourth quarter. Signet announced it would suspend its dividend to preserve cash. For the firm's fiscal quarter which ended November 1, revenue fell 7% to $629 million. Signet had a modest operating loss of $14 million. The firm's balance sheet is in relatively good shape. Signet has about 2,000 outlets operating under a variety of names. It has more than 17,000 employees. Right now, Signet might get by with a modest downsizing of 5% or 10%.

Retailers That Will Dominate Store Closings

Coach

Coach recently dropped its profit outlook and said same-store sales for December were down 13%. The rich are not getting richer. But, the market has not entirely turned away from the company. Shares trade at almost $18, down from a 52-week high of just over $37. That may seem awful, but the stock is not off as much as some others in the sector. Coach has over 500 stores and specialty outlets and 5,600 workers. Its finances are considered solid so it might get away with cutting 10% of its locations, or 50 outlets.
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Retailers That Will Dominate Store Closings

President Obama has done a good job of painting the Republicans as the Scrooges of our economy. While most Americans have jobs, many of us are empathetic toward those who don't. Every other person in corporate America fully understands that living paycheck to paycheck means that your pink slip could quickly end your financial security. So, perhaps Obama can win some political points by fighting hard on behalf of those who are out of work.

One advantage the president has used to its fullest is his own face and voice. He has been holding one press conference after another, stealing headlines from Republicans who don't have the same star appeal in the media. He is also doing a very good job of linking the economic downturn to the plight of the middle class. Even amateur politicians are aware that the middle class determines the fate of most political leaders.

Republicans continue to argue that extending unemployment benefits is too expensive in a nation with a $12 trillion debt. The problem for their party, however, is that they've had no problem spending money on silly wars or cutting taxes for the rich. Given that the wealthiest one percent of all Americans control 42 percent of our wealth, I would presume we could solve quite a few financial problems by increasing their contribution to the public good.

The massive momentum that Republicans built early in the year seems to be waning as we approach midterm elections. If the president can tweak out some good economic news, he might be able to keep some Democratic seats in Congress. I argue that the Republican strategy of alienating our nation's unemployed during their most difficult time is going to be remembered as a selfish, myopic and arrogant political move.

Dr. Boyce Watkins is the founder of the Your Black World Coalition and a Scholarship in Action resident of the Institute for Black Public Policy. To have Dr. Boyce's commentary delivered to your e-mail, please click here.