[–] POdPatriot 0 points 4 points 4 points (+4|-0) ago
This thread is making me miss my old hardware store - it's worn wooden floors, bins of nails and bolts measured into tiny paper bags, rolls of heavy window screen waiting to be cut to size, products the big box stores didn't carry, and the three or four old guys hanging around the counter on a Saturday morning who knew how to fix anything.
[–] bwarren2010 0 points 2 points 2 points (+2|-0) ago
Goodwill has taken a lot of store business
[–] wafoslaer 0 points 1 point 1 point (+1|-0) ago
So in some large city downtown areas there are very expensive stores - no customers or very few customers. I always thought - how could they stay in business? Well maybe the source of their money ( cabal, tax dollars, drug cartel dollars) has dried up and without real customers or products people can afford - their doors must close.
[–] Paladin_Diver 0 points 9 points 9 points (+9|-0) ago
The sad and untold part of this story is that the cashflow statement isn't the problem, the balance sheet is.
What that means (for those who aren't accountants) is that the leveraged corporate balance sheet is the reason for the store closings, not necessarily the location's ability to generate positive cashflow.
The corporate owners of these retailers loaded up on debt to juice the profits during good times. Those profits then were paid out as dividends, stock grants, etc.... The profits left the company, but the debt remained. Now any bump in the road causes these indebted companies to be in a position of forced liquidations.
Was that deep enough, or should I continue?
[–] G45Colt 0 points 6 points 6 points (+6|-0) ago (edited ago)
Loud and clear. In a nutshell - the boardroom and top officers of the company enriching themselves at the expense of the company. Ever notice how many CEOs are board members of other companies, and vise versa? In many cases, one small DS family.
[–] Paladin_Diver 0 points 3 points 3 points (+3|-0) ago
Absolutely. It is basically the DS playbook personified. And it doesn't happen in Adam Smith's worldview. It can only happen when the corruption is so deep that those who are supposed to prevent this crap are indeed the actual perpetrators.
[–] POdPatriot 0 points 2 points 2 points (+2|-0) ago
Thank you for this.
[–] Paladin_Diver 0 points 1 point 1 point (+1|-0) ago
Thank you. I was hoping I'd been clear enough in that simplified attempt at an explanation.
[–] LoyalTrumpArmy 0 points 2 points 2 points (+2|-0) ago
I just glanced the article. I don't know if I believe Bonton really had to go out of business. We live in a rich area where people can afford $70 for a shirt. Maybe people just wised up about getting ripped off. I will say this, I use to buy all my shoes from Bonton and in 2007, all the good shoe companies started outsourcing and you couldn't even find a pair that fits. One pair had nails coming up. They tried to go cheap and still charge high prices and that's probably what caused their downfall. Garbage in...garbage out.