The results that have come from the start of the subprime crisis for mortgages and the large amount of California foreclosures has only been made worse by the higher gas prices experienced by all. Even the local shops and businesses are feeling the pressure of it all. Mervyn's department store in California is filing for a Chapter 11 bankruptcy. One store closing would not be an issue but this chain of department stores has 129 stores in the state of California. If one is closing, they all could close eventually making the economy go crashing down even more.
If the workers of these stores find themselves without a job, there could be a rise in the number of foreclosures as a result. The company is saying they re not intending to close any other stores in the near future but with the Kohl's department store competition and the holiday season arriving soon, it could be faster than thought. If the economy is a problem, it filters down to all the smaller stores who can not keep up with the lower prices offered by the larger more funded department stores.
California foreclosure homes could be the main result of the problem areas in California and the decline of the retail market. Mervyn's is not sure whether they will be closing any stores but the city they are working in must be ready in case they do. Whenever a place as big as this moves away, it can cause a black hole effect on the economy and retail profits. Other areas have found that when this problem occurs, it is necessary to consider redevelopment of the area.