By  on January 23, 2009

Calling all retailers with strength, smarts and resiliency: more than $25 billion in sales is up for grabs, according to a study released Thursday.

The volume includes $9.6 billion from Steve & Barry’s, Mervyns, Goody’s Family Clothing Inc., Value City, Circuit City, Charming Shoppes Inc., Linens-N-Things and other retailers that liquidated or closed stores. It also includes $17 billion from underperformers such as Gap Inc., Saks Inc., Neiman Marcus Inc., Limited Brands Inc., J. Crew Group Inc., Sears Holdings Corp., Bon-Ton Stores Inc. and Eddie Bauer Holdings Inc., according to the report by Deutsche Bank, “Retail Industry ’09 Outlook: Retail Shakeout to Drive Leaders Ahead of Recovery.”

Bill Dreher, a retail analyst at Deutsche Bank and an author of the study, said the underperforming retailers do “not have a strong value proposition. They are being outflanked by their competition and have a poor capital structure, which further inhibits their ability [to succeed].”

At a time when most retail analysts are reducing their estimates, Dreher and Deutsche Bank are going against the current and raising estimates “because we’ve identified $9.6 billion of sales from bankruptcies and liquidations and another $17 billion waiting to happen,” he said.

Diminished consumer spending will worsen in the next three to six months, Dreher said.

“The winners are going to dine on the corpses of their competitors,” he added. “Consumer spending will be down 6.5 percent in 2009. Even with spending down, it’s the consolidation to the leaders that will drive business at Macy’s, Kohl’s and J.C. Penney.”

Dreher compared the consolidation of regional department stores with the disappearance of regional discounters such as Bradlees, Caldor and Aimes during the last economic downturn. “For the last 10 years, department stores have been ridiculous with promotions,” Dreher said. “It will moderate as these consolidations occur.”

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