Sunday, December 21, 2008

Suckers

You and me, that is, and anyone who didn't set up their own Ponzi-ish scheme during the past 8 years. I think an appropriate symbol of this era comes from Steve & Barry's, a chain store I never went to, which filed for bankruptcy earlier in the year.

Even as its business imploded, it claimed annual sales of about $1.1 billion and sales gains of 20 percent in stores open one year or more. But the company’s strategy of operating on razor-thin margins and of adding stores in distressed locations with special payments from landlords became tenuous in recent months as the economy weakened.


It really was an awesome business model. Sell things at prices to low to cover your operating costs, and then make it up by taking big upfront payments from malls to open more stores which couldn't cover their costs.