Lots of people on Wall Street are fussing this morning about the announcement by Bank of America that it will be firing 35,000 people. I think that it’s far more troubling, however, to see what’s happening in toys.
KB Toys, a chain of toy stores seen in shopping malls across America, is filing for bankruptcy. Many KB Toys stores will also be closed – right in the middle of the winter holiday shopping season.
This announcement, coming when it does, at the time of year when toy stores make most of their profits, reveals that winter holiday shopping is at extremely low levels – as KB Toys put it, “a sudden and sharp decline in consumer sales due to macro-economic forces”. Even if they haven’t lost their jobs yet, people are making the sensible decision of spending less in anticipation of economic disasters yet to come. That means that the kids will have to make due with just one or two new toys instead of the standard twenty-five.
It isn’t just the kids who are going to have thinner stockings this year, though. After all, toy stores for adults like Circuit City are going bankrupt too.