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Weak consumer data and a weak retailer combined to keep most of Wall Street in the red on Monday, though the technology sector managed a gain.
Mortgages were not a problem, but real estate investment trust loans, tanker loans, a possible New York City bankruptcy, midsize- to small-business loans, credit card loans, emerging market loans and weak retailer balance sheets (WT Grant had already gone bankrupt) all threatened the banking system in the midst of a prolonged and deep recession.
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With unemployment high and the economy weak, retailers won't risk chasing away frugal shoppers by raising prices.
Mr. Freddo said the company now had an opportunity to replace weak retailers with strong ones, but brokers said that might be hard.
This Christmas shopping season will be a test and one that may have a disruptive outcome for weaker retailers.
And for the weakest retailers -- those contemplating bankruptcy -- the incentive for their lenders is to file early and get ahead of other retailers who might have fire sales that depress the value of everyone's inventories of clothing, housewares and the like.
It's been a rocky year for women's contemporary apparel and accessory retailer Bebe, which eked out a 2% sales gain in a generally weak retail sector.
The clothing retailer narrowed its loss in the fourth quarter but warned Wednesday that it expects 2008 guidance to miss analyst expectations in a weak retail environment.
Beemer said the retail icon is taking market share from rivals such as Best Buy. Circuit City, a weaker electronics retailer, recently succumbed to the pressure of a weak economy and filed for bankruptcy protection.
Soriana was a distant fourth just a few years ago; the weakest Mexican retailer was predicted to fold first.
In addition to consumers' concerns about a weak economy, retailers are facing another headwind during holiday shopping season, there's no Tickle-Me-Elmo or similar hit-toy sending shoppers to stores in droves.
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CEO of Professional Science Editing for Scientists @ prosciediting.com