Former Home Depot CEO throws red flag over ‘complex economy’, predicts wave of bankruptcies

Former Home Depot CEO Bob Nardelli is ringing alarm bells over the US’ “very complex” economy, predicting that a lot of bankruptcies are about to hit and that middle market companies are under “tremendous pressure.”

(Video Credit: Fox Business)

“I think we’re going to see a lot of bankruptcies. Like Bed Bath & Beyond. We got Walmart not only laying people off but closing stores. We got Accenture laying people off. We got Amazon closing distribution centers. So I think there’s a tremendous-mixed message,” Nardelli grimly remarked during an appearance on “Cavuto: Coast to Coast.”

He went on to point out that the current “complexity” of the economy is “different than anything I have seen in my 52 years.”

At least 803 stores are set to close down this year as retailers are forced into cost-cutting measures amid rampant inflation thanks to the Biden administration.

In a stunning revelation by UBS analysts, over 50,000 retail locations could permanently close their doors over the next five years. That means that the US store count of 940,000 would drop by approximately 5% by the end of 2027. Those are numbers bordering on cataclysmic and no one seems to be paying attention to them.

The number of closed businesses is “already up significantly” in 2023 compared to last year, due to heavyweights such as Bed Bath & Beyond, Foot Locker, and bankrupt Tuesday Morning cutting back significantly on their footprints.

Bed Bath & Beyond has instituted a plan that calls for shutting down 480 stores by the end of the year. The company has suffered massive losses, the death of its CFO, and an activist investor selling a huge stake in the company. They are reportedly on the brink of bankruptcy.

Foot Locker followed suit in March, announcing that it will close 400 low-performing stores in shopping malls by 2026 as it shifts its focus to new concept stores. That’s a very, very bad sign for the economy.

Tuesday Morning has filed bankruptcy and is closing 265 stores in a second wave of closures, according to the Daily Mail.

Walmart is looking to cut back its real estate presence as well, shuttering five big box stores and its last two remaining pick-up locations due to poor revenue.

Up to 74 Gap stores are also set to be closed in 2023, while Party City is getting ready to downsize, with 12 locations currently up for auction across the nation amid bankruptcy negotiations and 10 more sitting on the chopping block.

Big Lots will also close down seven stores this year and will be moving outlets to smaller towns.

Macy’s is closing four stores in the first quarter of 2023, with malls in California, Colorado, Hawaii, and Maryland getting hit. The retail giant plans to shutter 125 locations over three years.

The RealReal will close four stores and two consignment offices across the nation as it looks to cut $2 million in costs.

After shuttering over 150 stores since 2020, JCPenney is also reportedly planning to close its locations in Oswego, New York, and Elkhart, Indiana this year.

Amazon is also closing several of its Fresh grocery outlets and Go convenience stores and many other stores are laying off thousands of workers.

That’s without the IT industry where there is still an employment bloodbath going on or a record number of personal bankruptcies looming.

Many retailers are shutting down in crime-ridden big blue cities. It’s just not sustainable to allow shoplifters to strip them of massive amounts of product and subject employees to skyrocketing crime rates. If they can’t make money there’s no point in staying.

Nardelli is asserting that Congress’ inability to work together to raise the debt ceiling limit has put intense pressure on businesses. He told Cavuto he is “definitely worried.”

“I’m seeing inventory builds in a lot of the businesses, both public and private. Neil, you remember when we spoke in ‘07, ’08, and ’09, there was a singular focus on the banks, right? Their meltdown took everything down,” Nardelli commented on Friday.

“Today, the banks are doing great. But now we have this mixed messaging. Retail is not doing so well. Banks are doing well. Transportation is up 13.9% over the last 12 months. I think we’re in a very complex environment. And, of course, this debt issue only adds to that. It adds to the certainty of uncertainty, what’s going to happen,” he warned.

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