theTrumpet.com

This Christmas season was like something right out of a fairy tale for some shoppers. Reported bargains were astounding. Unfortunately, for retailers with too many stores and not enough customers, this holiday season was horrible. Expect to see a flurry of bankruptcies in 2009. Associated Press reports:

The most dramatic pullback in consumer spending in decades could transform the retail landscape, as thousands of stores and whole malls close down. And analysts expect prolonged woes in the industry as the dramatic changes in shopping behavior could linger for another two or three years amid worries about the deteriorating economy and rising layoffs. …

A number of stores couldn’t even make it to Christmas. … The survival prospects for many more stores are dimming as more sales data come in about the crucial holiday shopping season ….

About 160,000 stores will have closed this year and 200,000 more could close next year, said Burt P. Flickinger iii, managing director of consulting firm Strategic Resource Group. That would be the industry’s biggest contraction in 35 years. Flickinger expects 2,000 to 3,000 malls to close in March and April.

AlixPartners, a turnaround consulting firm, predicts that 25.8 percent of 182 major retailers it tracks are facing major financial distress or will face a significant risk of filing for bankruptcy next year or in 2010—the highest level in the 10 years that the firm has been compiling the figures. That compares with the 4 percent to 7 percent that it predicted would face financial woes in the previous two years.

Bloomberg reported that despite steep discounts, U.S. retail store traffic fell during what may be “the worst holiday-shopping season in four decades.”

But retail outlets are just one industry facing cutbacks. A bankruptcy wave is on its way. 2009 could easily be the toughest job market in a generation.

For more on what’s up ahead, read “2009: The Year the Economy Changed Your life.” •