In Great Recession, everything must go

by Joe Ferullo

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My neighbor Ed is doing okay -- he runs his own business and he's hanging on through tough times. But, he tells me, things would be better were he only going out of business.

Doesn't sound right, I know, but my neighbor had a story to tell about the way life has changed for small businesses during a big recession.

I was over at his house about a week ago, and mentioned things look grim on Ventura Boulevard, the main shopping stretch in our part of Los Angeles. Every day, a new store tacked up a huge banner that read "going out of business" or "store liquidation."

Ed smiled and said the situation wasn't quite that bad.

Those sad signs? Just a new trick to bring in business. These days, people hold on to every dollar they've got -- and will only spend when they think the bargains are too bold to pass up. That's why stores like the Gap hand out coupons awarding you forty percent off, or hold 2-for-1 sales. Only deep discounts draw those wallets out into the light of day.

It's the same, Ed said, with "going out of business" signs. Nine times out of ten, he told me, the stores are hanging in there -- but the only way they can really boost traffic is to do something drastic. And "everything must go" tells shoppers you can walk into my place and rob me blind. Please. Walk into my place.

But, like everything else, the buyer has to beware. Apparently, my part of Southern California is being hit by a band of crooked carpet salesmen, Ed says.

Here's how they work: some legitimate outfit -- like a chain furniture store -- goes out of business. Before they can lock up the doors, these carpet guys move in. They keep up the signs of the old, established store -- and keep dispalying their old "going out of business" banners. Then they insanely overcharge for the cut-rate carpets they carry -- and watch shoppers merrily haul them all away, each convinced he's gotten a big steal from a big store in trouble.

I ran into Ed again just this weekend, walking my dog. We talked a bit more about those signs -- and he said he was, reluctantly, ready to make his move. His store needed the jolt. But he was going with the tamer "store liquidation" method. Sounds nearly as drastic, but it's not a lie, he noted. He did indeed need to "liquidate" inventory, to make room for new merchandise he'd then be able to buy once he, well, sold off enough of the old stuff to reanimate his cash flow. You get the drift.

He walked back toward his house, and I went on to the boulevard with my dog. We turned right, and came upon a brash, brassy jewelry store that was once a low-key local florist. The jewelers had balloons and bunting outside and a huge sign that read: "Auction!" An ad from the newspaper taped up in the window blared out "Forced to Quit Forever!"

I leaned in for a closer read and discovered that this store was doing fine, and was actually selling left-over "jewelry inventory from stores" -- that is other stores -- which were (big type) "FORCED TO QUIT FOREVER!"

Next to those words, in even bolder type, a headline naturally screamed: Everything Must Go!

In the Great Recession, of course it must.

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