When local governments act like corporations, what happens? Jefferson County, Alabama, for one, home to Birmingham, is billions of dollars in debt.
Two commissioners in Jefferson County are pressing the county to file for bankruptcy court protection, as the county grapples with about $4 billion in debt related to a controversial series of bond transactions earlier in the decade.Controversial, you say? I'm sure.
Here's a fascinating side effect of bankruptcy filings--we get to learn the semi-interesting names of creditors. From North Carolina:
Raleigh's Carolina Wine Co. left vino lovers across the country with empty glasses when it suddenly shut down this year.Those creditors, including the governor, are each owed between "$100 in wine to $47,000."But the company's bankruptcy filing reveals that it had widespread and, in some cases, famous clients.
This is intriguing: a number of malls nationwide are cutting hours, instead of closing stores. Barnes and Noble is changing hours across the country. "General Growth, which is trying to avoid filing for bankruptcy protection, is changing the hours at many of its malls across the country, including Baltimore-area locations White Marsh Mall, Owings Mills Mall, Towson Town Center, Mondawmin Mall and The Mall in Columbia. The malls will close a half-hour earlier Monday through Thursday and close an hour earlier Friday and Saturday. On Sunday, the malls will open an hour later."
The failure of a large chain like Circuit City means a competitive segment has an opening to be filled. After all, Best Buy can't be the only option for electronics retailing forever.
And so the market will slowly see companies begin to fill that void, starting in Connecticut, where PC. Richard & Son is expanding, opening a store in Norwalk. P.C. Richard is a 100-year old company that has grown slowly and locally in the New York metropolitan area. Now with 52 stores, it has the mass to continue its expansion into places where competition is light.
Expect to see more reports like this as the economy settles down and smaller companies decide to challenge the remaining national brands.
Here's an appropriate recession-era gimmick: a store where everything is free. Sure, it's an art installation, but Free Store is living up to its name, complete with transactions and sales receipts. Patrons are encouraged to drop off their own merchandise for the store to "sell," replenishing the supply. The store, in lower Manhattan, is open through the end of March.
The Economist has a story this week exploring the booming business of discount stores in the recession. Not only is Dollar General expanding, but Dollar Tree had record sales in 2008 and 99¢ Only Stores rang up $1.2 billion in sales. The article notes that discount stores, which typically exist in distressed or rural areas, are rapidly advancing into city centers including Los Angeles and Chicago.
An interesting (if not unexpected) side effect of slow retail sales is its impact on job opportunities. As of December, the sector had 1.54 million unemployed retail workers and just under 300,000 job openings--more than twice the rate of a year ago. And the sector is attracting job-seekers new to retail, compounding the competition for jobs. With the average retail position paying $9.69 an hour, the growing applicant pool underscores the severity of the recession.
