The signs that smaller retailers are struggling are unavoidable at malls across America: “Going out of business” sales at many Wilsons Leather stores. “Up to 70 percent off” at KB Toys.At the once-sizzling Paradise Valley Mall in Phoenix, the space formerly occupied by Bombay Co., the furniture chain that went bankrupt last year, is empty. Wilsons just finished liquidating its inventory. KB Toys, Ann Taylor and American Eagle feature bold posters advertising steep discounts.
“I don’t think it brings much business when all these stores are closed,” said Michelle Green, a sales clerk at Fred Meyer Jewelers.
Around the country, mall centers are starting to feel the recoil from a rapid expansion in recent years that allowed retailers to aim stores at almost every niche, from shoppers who wanted Talbots clothes for their children to those who craved Bombay’s little wood tables.
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Because of the expansionary period in the last few years, chain stores have become ubiquitous. Now that we are in a contractionary period, the over supply of these chain stores are becoming more and more apparent. Along with the peak in gas prices, aggregate demand has decrease and consumers will only buy the products that they need most right now. One figure in the article noted that we are undergoing "economic Darwinism." Stores can only slash prices so much and some have closed down temporarily because of the lack of business. Currently, the malls and their stores are taking a large hit due to the current lack of demand.
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