A lot of firms have been using the attack as an excuse... somehow, terrorists have even inhibited the buying of guitars since The Guitar Center announced potential losses blamed on the attack!
Seriously, there may be some truth to things. A business on the brink of bankrupcy depends on the leniency of creditors for continued existence. If creditors think that consumers will purchase less, as has happened after the attack, then they may be reluctant to make further loans. Firms on the margin live week to week and even a short term dip in purchases may push them to far into the red. Fabio > The day after the 9/11 attack, Midway Airlines basically closed shop, > suspending all of its flights and announcing 1,700 layoffs. They had > already filed for Chaper 11 bankruptcy protection; it almost seemed as if > they used the attack as an excuse to close shop earlier than expected. In > fact, the failing company may, perversely, be staying afloat due to the > attacks -- today, their CEO announced that they'd resume operation, and > expect to receive $12 million in federal grant money and another $28 > million in federal loans. > > Now, Mademoiselle magazine is folding. It hasn't made a profit "for years" > (according to the article I'm reading, cited below), but stayed open. The > attacks changed their tune: > > ``Mademoiselle was having a weak year, but once the Sept. 11 disasters took > place, we had to make some very difficult economic decisions,'' company > spokeswoman Maurie Perl said. > > ``We expect, as with most businesses, it will be a difficult fourth > quarter, and we forecast it will be a difficult business year in 2002, > which caused us to make some very difficult, but final decisions, with > Mademoiselle,'' she added. > > What possible reason would businesses NOT expecting a bailout have for > closing shop now? Steve Brill's Contentville also closed up, but they gave > a more realistic reason -- "we simply were unable to entice enough people > for us to see our way to a viable enterprise." Are failing companies just > using the attacks as an excuse? If they were failing before, why didn't > they close up then? > > Any thoughts? > > Dan Lewis > > > Some relevent links (I'm probably posting this to my website, so I have the > URLs handy): > * Midway suspends future flights: > http://us.news2.yimg.com/f/42/31/7m/dailynews.yahoo.com/h/nm/20010912/bs/air > lines_midwayairlines_dc_1.html > * Midway To Get Federal Aid Money: > http://dailynews.yahoo.com/h/wxii/20011001/lo/916790_1.html > * Conde Nast to shut down Mademoiselle magazine: > http://biz.yahoo.com/rf/011001/n01353510_3.html > * Contentville's statement: > http://www.contentville.com/ >
