Business: Long government shutdown may finish companies like J.C. Penney, BlackBerrySource: Yahoo Finance
How long is too long before the shutdown of the federal government begins to batter U.S. gross domestic product and the fortunes of a number of industries? In the case of government suppliers, not long. Additionally, some large American public corporations already have reached a point where a further slip in sales could destroy them. A slowdown or reversal of the small national improvements in consumer spending would crater any chance that J.C. Penney Co. Inc. (JCP) and BlackBerry Ltd. (BBRY) have to steady their declines and would completely ruin their futures.
The holiday season will be a watershed for J.C. Penney. Low on cash and plagued by several quarters of falling revenue, the retailer needs to post big increases in sales during October, November and December. It is already bleeding customers, many of whom have left for rival retailers. Holiday sales across the retail industry are forecast to be lackluster. If the government is shuttered for several weeks, the financial effect will mangle consumer confidence and, in some cases, cause outright layoffs.