More and more stores are expected to downsize operations this year.  Circuit City, Linens ‘N Things and Mervyn’s have already closed shop.  Experts are warning the public to expect more closures as the recession tightens its grip on US economy.

Stores like Gap, Starbucks and Lane Bryant probably won’t file for bankruptcy but financial specialists say that these companies will be close to one.  Consumers are simply refusing to spend their hard earned money and retailers are all fighting for a dwindling market share amid loose credits and low interest rates.

This trend will continue for quite some time and will unemployment can only last for so long, it will take some time for consumer debt loads and credit access to recover.

“I don’t think we will live the same way for 10 years,” says Howard Davidowitz, Chairman  of Davidowitz & Associates, a New York based retail consultant and investment bank.  “People are so scared they’re starting to save.”

He says retailers at risk in 2009 include: Eddie Bauer, Pacific Sunwear and Zales.  The three stores have already began closing outlets last year.  More closings are expected as the year wears on.  Charming Shoppes which owns Lane Bryant has already closed 150 stores late last year, is expected to close 100 more outlets this year.

Even stores like Sears and KMart are expected to feel the economic pinch.  Already, value is down 30% and the slump in sales will push the number even lower.  Companies like Sprint Nextel and Starbucks are also expected to close outlets.  Sprint because of their narrow target market and Starbucks because of prices.  Other high-priced stores like Mrs. Fields’ Cookies, Applebees and Cheesecake Factory are also expected to feel the economic slump as consumers will  begin to favor more thrifty alternatives like McDonald’s.

The nation’s second largest electronics store, Circuit City is asking a bankruptcy court’s permission to liquidate its U.S. assets to pay off $2 billion in outstanding debt.

The company has already closed 155 stores late last year as part of a reorganization strategy.  It is expected to close its remaining 567 stores at the end of March 2009.  The company is having a hard time finding a buyer even with the “going-out-of-business” sale because of the economic downturn the country is currently experiencing.  Consumers are simply refusing to spend money on electronics.

Five Sacramento stores closed earlier this week.  For Sacramento realtors this will mean more vacant spaces, and since Circuit City stores are relatively small, they say, it is going to be even tougher to find renters for those vacant spaces.

The closing of all 567 remaining stores will also mean more unemployment.  Circuit City locations employ an  average of 50 people each.  This will hit states badly whose local job employment rates has dropped significantly since the start of the financial crisis.

Probably the only one to rejoice with this news will be Circuit City competitor Best Buy, who may change their name to simply “Buy” after the closing of Circuit City.