[gibbitz]

What gets me here is that bust out 1 happened after one bad holiday season to a company that was doing great the previous year. Another company in New Jersey (Toys R Us) had a similar one mistake year and ended up owned by Bain Capital -- the people who profited from the bust out weren't even part of company. Why is it that retail companies only get one strike before their stocks are pillaged leaving them crippled? Is there another market as ruthless as this?

[nradov]

You are looking at only two companies, not a representative sample of retailers. ANF, for example, has multiple "strikes" but they're still around. Retailers only become vulnerable to takeovers when investors lose confidence in management's competence. All other industries are equally ruthless.

In general the US still has a surplus of retail space. There will probably be more major bankruptcies in the next few years, which is fine. Let them die and more innovative companies will take their place.