100% Sure Way To Profit From The 2009 Retail Collapse

North American retailers will be facing an apocalyptic plague of bankruptcies, store closures and takeovers starting right after the holiday season as the latest retail results for the critical end of year sales seem to be the worst in almost half a century. Some analysts are calling for anywhere between 12,000 and 20,000 large "big box" stores and a total of almost a quarter million other retailers to be closed in 2009, joining Linens ‘n Things Inc., Circuit City Stores Inc., Sharper Image Corp. and Steve & Barry’s LLC, which are already sought bankruptcy protection. Talbots Inc., AnnTaylor Stores Corp., and Sears Holdings Corp. are already in the process of closing down a vast number of underperforming locations.

February of 2009 will most likely become known as the Bloodbath Month as many chain retailers will file financial reports in that month, and this year they will be accompanied by bankruptcy protection filings as well. The retail pain will be spread across the spectrum of brick and mortar operations: department stores, specialty stores, grocery stores, drugstores, and all sorts of other major chains.

The effect this will have on shopping centers across North America will be devastating. Many of these malls will not be able to operate in the absence of their big box anchor stores and will be forced to close, eliminating some of the other individual and smaller chain retailers who might have otherwise been able to maintain their presence in the malls.

In the avalanche of all these lemons, how would it be humanly possible to make lemonade? By analyzing the retail data, it is evident that there is one aspect of retailing which has not been devastated by the collapse of the American economy, but is actually thriving: Discount stores! Wal-Mart shares gained 16 percent in 2008 while many other companies suffered drops of over 90%! So why not open your own discount store?

No, I have not gone insane and I am not suggesting that you start to get into competition with the juggernaut based in Bentonville, Arkansas. There are many minor niches which can be exceptionally profitable if you know what you're doing and you can act fast.

This is not a long range plan. In order to make a killing you should plan to have your own discount store open very quickly, no later than March 2009. There will be endless empty stores which can be leased for a fraction of what they would have fetched even a year ago, and the landlords will be very willing to provide all sorts of incentives to get you in there, including leasehold improvements to your specification, and several months of free rent!

The way you benefit from the huge upcoming retail bankruptcies is by buying their distressed stock. No, I'm not expecting you to march checkbook in hand to the headquarters of a national chain and offer to buy all their stock, but there are literally hundreds of liquidation retailers and etailers which do just that and then blow the stock out at pennies on the dollar. It's absolutely incredible how cheap you can buy this stuff for right now! You can buy a few cases, a few pallets, or a few truckloads, fill your store, and then watch the customers rush in! You won't need enormous financing, as you'll find that if you play your (credit) cards right you might be able to finance your entire startup on the available balance of a couple of Visa cards, and make enough profit to break even in the first month!

The key is price, price, price. You have to not just undersell your local competition, you have to blow them away. Keep your margins relatively thin and make the big money on volume. Price-challenged consumers in your region will make a U-turn away from the stores which charge twice as much as you do for the same item and will become your loyal shoppers. It's not at all unusual to be able to sell a product which is available in conventional retail stores for $9.95 in your retail outlet for $1.99 and still be doubling your money on it!

Don't forget groceries. Although people may not be able to afford all the toys and trinkets, they will still have to eat! Check out "banana box" liquidators who will sell you perfectly good (if maybe package-scrunched) food for 10% to 20% of their retail price. Imagine the volume you can do in those items!!!

So... what are you waiting for? This recession won't last forever, and you have to strike while the iron is hot. Get out there and get that discount store open now!

More by this Author


Comments 29 comments

Netters profile image

Netters 7 years ago from Land of Enchantment - NM

WOW! Great idea! Thank you.


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

Let me know when your store opens! :)


TKIMWRSVC profile image

TKIMWRSVC 7 years ago from United States

I so have to add this as a link to my own hub about what I think can help out with the immediate future. Awesome concepts and I hope you are wrong to be honest.


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

I hope I'm wrong too. I have a lot of people I know who work in retail and they could all be out of a job!


Shirley Anderson profile image

Shirley Anderson 7 years ago from Ontario, Canada

Wow. I just rec'd an email today about a lot of the chains closing up locations but I had hoped that it was misinformation.

While I'm not going to open a discount store myself, I think you've given folks a great heads up on a great idea. Now, I'm going to feel obliged to buy something in them to help the enterprising entrepreneurs out. :)

Bravo, Hal.


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

Thanks! Maybe we should organize Hubbers to form a buying cooperative for a liquidation chain of stores across North America. We could call it THE HAL-F PRICE HUB! (OK, jus' kiddin'...) :)


pgrundy 7 years ago

So Hal, where is your store and when does it open? I'm in West Michigan, so I could actually shop there--although it will be a drive the savings will make it well worth while! lol!

Seriously, great hub. I knew an old guy once who fished expired baked goods out of Kroger's dump bin. Actually he had a friend on the inside who got him all the stuff. He sold it for pennies on the dollar out of his garage. I always thought that was kind of 'icky'--expired pink Kroger birthday cakes next to the motor oil, but hey, you do what you hafta do to keep on keepin' on...


Jerilee Wei profile image

Jerilee Wei 7 years ago from United States

You are so right and we're looking forward to the auctions. Great hub!


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

pgrundy, I've had too much experience with expired food products and it's all been negative, so I'll pass on that! :) Actually, there are many grocery items, all packaged and canned, that are available from a wide variety of liquidation outlets, and they're all within date (if maybe by just a bit), and the prices are astoundingly low!

Jerilee Wei, I'll see you at the auctions! I hope we don't get into a bidding war! :)


Shirley Anderson profile image

Shirley Anderson 7 years ago from Ontario, Canada

*groan* on the co-op name.  We could have computers at the cash registers, all set to the HP site so the consumers can click on our ads, maybe leave comments while they're waiting for their groceries to be rung up.  This little plan of yours just might be more brilliant than I first realized.


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

Shirley, I think it's rather interesting that here at Hub we are sitting on a worldwide readership of thousands of people, many of them interested in making a good living through a recession, and that it could be relatively simple to harness all this widespread potential and channel it into a massive liquidation sourcing and distribution network unlike any other on Earth. Something to think about... hmm...


Shirley Anderson profile image

Shirley Anderson 7 years ago from Ontario, Canada

I can hear the cogs turning, Hal. :) Forgive my unsophisticated thought process but while this sounds like it is brimming with potential, it also sounds like it would take a lot of money.

Why is it that I think you mapped out a cursory business plan before you even finished typing your comment?


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

Way back in the day when I was running media companies, they called me "Business Plan, Just Add Water." I usually come up with BPs on the fly and have been known to have 100 pages on the desk the next morning. I most definitely have something brewing in my crazed and addled brain. And although it would most definitely require the participation, commitment and time of as many Hubbers as possible, they would all benefit from it financially without putting out one dollar of their own funds. And, BTW Shirley, if your thought processes are unsophisticated, I have a backache from carting around all those Olympic Gold Medals around my neck! :)


Shirley Anderson profile image

Shirley Anderson 7 years ago from Ontario, Canada

I'm laughing at your last sentence...quite the visual.

So, what do you intend to do with this great idea? I assume your first step is to appeal to the masses required to bring it all to fruition.


FunFacter profile image

FunFacter 7 years ago from Canada

Just a bit of advice for the ones who are implenting on this hub.Try the most to stock Inferior Goods (margarine) instead Of Normal Goods (butter) as inferior goods have increase demand in an economy during a recession as people have less money to spend and they would choose to buy a margarine instead of butter which is opposite during a boom.


Shirley Anderson profile image

Shirley Anderson 7 years ago from Ontario, Canada

Good advice, FunFacter.


mdvaldosta profile image

mdvaldosta 7 years ago from Valdosta, GA

Bet those folks selling Ramon Noodles and Chicken Noodle Soup are doing great about now...


Wayne Litchford profile image

Wayne Litchford 7 years ago from Nashville, TN

Your hub covered information I hadn't thought about. The closing of so many stores with household names. Sounds like a bad situation. How do you think this will affect the American economy?


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

Shirley, what I'd love to do is to appeal to every single Hubber that they could make some great money by participating in this network. But then I'd have to write a Hub attacking myself for over-promoting in a Hub and I'd have to be very unkind to myself. :)

FunFacter, yes, by all means this is not the time to get into the discount Rolex trade. Good ol' Timexes (and other basic value goods) are the only ones that will fly off the shelf!

mdvaldosta, I know of one liquidation store owner who gets noodle cups by the pallet and can't bring them in fast enough!

Wayne Litchford, I'm afraid that the upcoming 2009 retail implosion, combined with the soon to be spike in petroleum prices which will be triggered by the Arab reaction to Israel's Gaza massacres, are going to take the US economy to levels where 2008 will be considered "the good ol' days..." :(


Shirley Anderson profile image

Shirley Anderson 7 years ago from Ontario, Canada

Yes, Hal, but if you write the self-promo, then write the self-incrimination, there can only be exhonoration....and plenty of free PR. That formula seems to work well for some U.S. presidents, so why not you?


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

Because I am but a humble mere man (heheh) and I most certainly wouldn't want to be sitting in the White House getting the blame for what I have no way of controlling in the next four years. :)


Shirley Anderson profile image

Shirley Anderson 7 years ago from Ontario, Canada

Well, when you put it that way, I just can't think of any convincing argument to the contrary. Quickly, anyway. I may be back when a flash of brilliance hits me.


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

If drafted, I will not run; if nominated, I will not accept; if elected, I will not serve. :)


Shirley Anderson profile image

Shirley Anderson 7 years ago from Ontario, Canada

So noble!

Now, what are you going to do with your brilliant plan? I hate to see a good business model go to waste.


Shirley Anderson profile image

Shirley Anderson 7 years ago from Ontario, Canada

By the way, would you join a club that would have you as a member?


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

Any club that would have standards so low as to admit me would have to be either involved in illegal activities or have a Membership Director so illiterate that he couldn't even spell his own name, so... no. :)


Shirley Anderson profile image

Shirley Anderson 7 years ago from Ontario, Canada

Have you considered the fact that you could probably become the club president and have the others do your bidding to assist in your achieving retail domination? And, of course, riches.


JennifersJumpers profile image

JennifersJumpers 7 years ago

Great hub. I am trying to do as you suggest, but in the area of sewing and selling girls clothing. I can beat the boutique prices by 50% sometimes. I remember when I couldn't get a customer, now it's not so hard since people have become "price loyal" and not "brand loyal." I have purchased fabric at liquidation sales and I am sewing like a mad man! Do you think that someone could rent out some of those empty retail buildings and then sublet to a small vendor like me? If I want a kiosk in my local mall it still costs $2000.00 per month. I am waiting for the price to do down. They must be crazy.


Hal Licino profile image

Hal Licino 7 years ago from Toronto Author

Shirley Anderson: There is more to life than riches, as Madoff and Co. are learning the hard way. Although I would like to be the Club Prez just for fun! :)

JennifersJumpers: You definitely seem to be in the right market segment at the right time. As for the ridiculous mall rents, just go into the mall manager, inform him that if he wants to fill one of his gaping holes with a quality tenant who has a thriving business, he'd better pull his head out of "Boomtown 2005" and come up with reasonable lease terms. You'd be surprised how many of them will come around to a forceful argument along these lines and give you what you want.

    Sign in or sign up and post using a HubPages Network account.

    0 of 8192 characters used
    Post Comment

    No HTML is allowed in comments, but URLs will be hyperlinked. Comments are not for promoting your articles or other sites.


    Click to Rate This Article
    working