The Next Recession Domino: Boutiques

3/12 - "While Wilson's might be among the first companies to feel the crunch of the recession (or, if you prefer, "reduced consumer confidence and, incidentally, reduced spending"), it will probably not be the last. Specialty stores and boutiques are probably looking at a tough year. "Mall" stores like Ann Taylor (NYSE: ANN), American Eagle (NYSE: AEO), Sephora, The Gap (NYSE: GPS), and PacSun (NASDAQ: PSUN) tend to pay premium prices for their spaces, have a rather limited range of stock, and charge more money for their products. All of this adds up to a vulnerable position when it comes to reduced consumer spending. Add in the fact that, ever since the late 1990's, malls have been declining as centers of commerce, and you've got a recipe for disaster. In fact, some analysts are predicting that retail bankruptcies this year could reach the highest level since 1991.

As for the next domino, if the current trends in mall shopping and small business problems continue, I'd watch out for a major downturn among Mall property management companies."