Circuit City goes the Chapter 11 route. While most of its stores will stay open through Christmas, the company will continue drowning unless a miracle benefits them.
Placing this in larger context, we’re less than two weeks away from the start of Christmas shopping season — the time when retail businesses earn the majority of their profits. We could be seeing desperation from businesses here: Circuit City can’t keep many stores open despite the profit to be made in a couple weeks, and DHL can’t keep shipping despite the Christmas gift packages that will surely flood the market. Or are the upcoming retail sales projections from these companies just so weak that they don’t see enough demand to justify maintaining full time operations? Is this desperation or foreshadowing?
The case for foreshadowing is grim but accurate. The US economy shed 1.2 million jobs this year. A real test will be November’s job growth (or lack thereof) numbers — will they receive a bounce from retail’s traditional hiring of temporary labor for the holiday season… Or is retail not hiring right now? We’ll know in December.
The fact that the Dow Jones Index is still below 9000 points, losing about a third of its value in the past year, also bolsters the case for foreshadowing. Americans are looking at the thousands of dollars missing from their retirement funds right now, which doesn’t place one in the jolly holiday shopping mood.
So, how much are you willing to spend this Christmas shopping season? Or are you looking for crafts to make and pie recipes to test en masse? I’m uncreative (unless behind a drumset) and can’t really cook, so I’m thinking the greeting cards route…