"The increasingly competitive industry conditions under which we operate has negatively impacted our results of operations and cash flows and may continue to in the future. These factors raise substantial doubt about our ability to continue as a going concern," Blockbuster said in a regulatory filing late Tuesday.

"It is possible that a successful and efficient implementation of an exchange or any of the other strategies we are pursuing will require us to make a pre-packaged, pre-arranged or other type of filing for protection under Chapter 11 of the U.S. Bankruptcy Code."

As a result of reducing merchandise and markdowns, as well as adding fresher products, gross margin, or the profit after deducting the cost of its goods, soared to 52.5% from 35.7% in the same quarter a year ago.

AnnTaylor pointed to a sales rebound so far in its current quarter, with both its store brands achieving 10% increases in sales at stores open at least a year in February. The retailer expects a return to sales growth in 2010 based on growth in same-store sales in every quarter of the year.

"Our strategy for store closings is to optimize our cost per square foot," she said during a conference hosted by Bank of America/Merrill Lynch. "The goal is not closing stores per se."

Over the next three years, 25% of the leases on the stores in the company's stable of brands, including Pottery Barn home furnishings stores and Williams-Sonoma kitchen stores, will be coming to an end. Williams-Sonoma sees that as a major opportunity to negotiate more favorable lease costs or terms or to relocate or close stores entirely, executives said. That should help it return to historical levels of profitability for its retail stores, McCollam said.

Abercrombie & Fitch Co. said Wednesday that it will continue its uncharacteristically high levels of discounting through the spring in order to boost store sales.

Jonathan Ramsden, chief financial officer of the New Albany, Ohio, teen clothing retailer, said it is willing to sacrifice margins if necessary to improve sales. Average unit prices, which were down 14% in February on higher discounting, will continue to be "down quite significantly" for the first half of the year, Mr. Ramsden said.

The announcement affects 13 Kmarts in: Longmont, Colo.; Jacksonville, Fla.; Bainbridge, Ga.; Crestwood, Ill.; Woodstock, Ill.; Connersville, Ind.; Austin, Minn.; Cleveland; Dayton, Ohio; Eastlake, Ohio; Milford, Ohio; Wadsworth, Ohio; and Bremerton, Wash.

Four Sears stores will shut at malls in Waycross, Ga.; Wilson, N.C.; Columbia, Tenn.; and Houston.

And four smaller Sears locations, called Sears Essentials, will close in Londonderry, N.H.; Marlton, N.J.; South Plainfield, N.J.; and West Bend, Wis.

t's sad but true. After 55 years of serving the Washington area community, MyerEmco Audio Video will be closing its doors forever. As a family-operated business, we've outlasted many high-profile competitors - but we couldn't outlast this Great Recession. Our loss, however, is your gain. With products in every department at up to 50% off, the time to come in is now. We will provide regular updates on our site which you can see below. Markdowns will continue to increase as the days go by and inventory diminishes. Don't miss out!

Martin + Osa is depressing American Eagle's bottom line as the concept stores, meant to appeal to 28- to 40-year-olds, lost its president late last year and American Eagle Chief Executive Jim O'Donnell was a bit non-committal about the stores' future at a recent industry gathering.

The stores are making progress, with design and production processes having improved, Mr. O'Donnell told attendees at an industry conference on Jan. 13. "It is also important that we continue to differentiate the Martin + Osa brand within the competitive landscape as well as create an emotional connection with the customers."

But Mr. O'Donnell implied the money-losing unit may not yet have achieved its goal, saying, "We are still evaluating our plans and we'll provide additional information...during our fourth quarter earnings call."

The company listed debt of $500 million to $1 billion and assets of as much as $50 million in Chapter 11 documents filed yesterday in U.S. Bankruptcy Court in Richmond, Virginia.

The owner of the Hollywood Video chain exited its first bankruptcy in 2008. Its traditional stores are losing customers to Netflix Inc., which rents movies by mail, and Coinstar Inc., operator of Redbox movie-rental kiosks.

"One of the most significant industry-wide factors affecting the company’s performance since the 2007 bankruptcy cases has been the cannibalization of rentals by DVD dispensing kiosks operated by Redbox which offer low priced rentals and convenience," Steve Moore, Movie Gallery's Chief Restructuring Officer, said in court papers.

As part of the restructuring, Movie Gallery could attempt to close about two-thirds of its outlets—about 1,800 stores, these people said. That could create a significant number of layoffs, given the company currently employs 21,000.

The company previously filed for bankruptcy in October 2007, emerging in spring 2008 with private-investment firms Sopris Capital Advisors LLC and Aspen Advisors LLC as its principal owners, according to regulatory filings. The current equity holders' investments are likely to be wiped out in the bankruptcy. The owners also control large chunks of the firm's debt.

The Japanese retailer, which runs 7-Eleven convenience stores in Japan and the U.S., as well as upscale Japanese department stores Seibu and Sogo and Ito-Yokado supermarkets, said Wednesday it will shut its Seibu branch in the Yurakucho district on Dec. 25.

The decision follows last year's closure of Seven & i's much bigger Sogo store in Osaka, which was then transferred to Daimaru Inc., a unit of Japan's second largest department store operator J. Front Retailing Co. Seven & i also last year shut a Seibu store in Sapporo, northern Japan.

Movie Gallery has yet to decide on the number of store closures as it weighs its restructuring options. Closing about 1,000 outlets is one of several options under discussion. The company has already asked liquidators to bid for the inventory at an undisclosed number of its stores, according to those people.

A spokesman for Movie Gallery declined to comment.

Macy's recent store closures will be leaving malls already hurt by a wave of national chain closures since 2008, according to Equity Research Analyst Brian S. Sozzi. He added the exit of Macy's could cause others to vacate, creating a "dead mall" syndrome, which is when vacancy rates rise above 70%.

"All in all, the store closures were in cities with unemployment and median income levels significantly worse than state and national averages," Sozzi said. "People in these areas shifted what discretionary purchases they were making to better kept/promoted malls or big box stores able to drive low prices on a range of merchandise in a one-stop format."

The closures, affecting mostly Foot Locker and Lady Foot Locker outlets in the U.S., would bring to 190 the number of shutterings for the fiscal year ending Jan. 30. The company had 3,601 stores as of Oct. 31.

Aside from the economic downturn, the athletic apparel and footwear chain has been hurt by a longer-running fashion shift toward casual shoes and away from sneakers. Foot Locker has reacted by lowering costs, closing stores and weeding out poorly performing products.