BernieHund: The Political Watchdog

Goody’s isn’t exactly a high-end store.  With 350 stores throughout the eastern section of the country, today the chain added its name to the list of retailers who are seeking bankruptcy reorganization.  And, we are still wondering if we are in a recession?

Goody’s clientele are among those who are most hurt by rising food prices and $4.00 a gallon gasoline.  It’s one of those everyday department stores for those who don’t know.  The shoppers are people who get paid every week or every other week for the most part.  The shoppers are those people who have to cut back on shopping if gas goes up another quarter a gallon.  Food and gas come before clothing and accessories.

Goody’shas struggled with tight credit markets, a strain on merchandise flow and a sizable number of underperforming stores, the Knoxville, Tennessee-based company said in a filing with the U.S. Bankruptcy Court in Delaware.

A slowdown in consumer spending has already sent a slew of retailers. including Linens ‘n Things and Sharper Image Inc, streaming into bankruptcy court. The pace shows no sign of slowing.

So far most of the retailers who are finding themselves in over their heads are mall type stores, the ones where Average Joe and Joanna shop. 

“I would expect more filings in the near-term and the mid-term,” said Richard Mikels, chairman of the bankruptcy practice at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo. “It’s going to be at all levels of the retail industry because of the consumer malaise in this country, including surprising job losses and the high cost of energy.”

Further, Mikels said: “A lot of retail companies are highly leveraged, and highly leveraged companies are going to have trouble because of the credit crunch.”

After Lehman’s dismal loss that was reported today and Goody’s Chapter 11 filing, it seems that we are being crushed from the top to the bottom by the RECESSION.