This morning’s New York Times leads with an article about the wave of bankruptcies, likely bankruptcies, and major shrinkages among the nation’s retailers: Levitz and Sharper Image have filed, Linens ‘n Things with 500 stores may soon file, and Foot Locker, Ann Taylor and Zales have announced they will close a combined 357 stores.
It’s the inevitable shakeout driven by the recession and too many chains having been bought out by private equity firms that relied on too much debt.
Yet America’s economic development profession — and its loosey-goosey subsidies like Tax Increment Financing — continue to subsidize the construction of ever-more retail square footage, including predatory chains like Wal-Mart and market-share grabbers like Cabela’s and Bass Pro.
But as experts such as Big-Box Swindle author Stacy Mitchell remind us (hear her keynote and at our May 7-8 conference near Baltimore!), and as I detailed in The Great American Jobs Scam, we already have many times more retail space per capita than any other industrial nation, and several times more than we had a few decades ago.
If there is a silver lining to be found in this awful recession, let it be this: states amend their rules to say no economic development subsidies for retail unless the project is located in a neighborhood that is demonstrably underserved with basic retail such as groceries, pharmacies and clothing stores.