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A rash of retailing bankruptcies is expected in the new year, but because the clock winds down on one of the weakest holiday shopping seasons in decades, the fallout has already begun.

On Monday, Parent Co., an Internet retailer of children’s products, had the dubious distinction of becoming the principal well-known retailer to file toward Chapter 11 bankruptcy protection in imitation of Christmas.

The company made the filing along by nine of its subsidiaries, including eToys and BabyUniverse.

Many analysts did not expect bankruptcy filings to begin until January or early February.

Michael Wagner, chief executory of Parent Co., called the filing “an unfortunate but necessary and amenable proceeding to save from decay the company’s value on this account that our stakeholders in light of the ongoing challenging retail environment.”

Challenging is hardly the word.

This year, retailers including Circuit City, Boscov’session, Sharper Image, Mervyns, Linens ‘N Things, Whitehall Jewelers and Steve & Barry’s filed for insolvency bulwark. And that is likely the tip of the iceberg.

After studying else than 180 companies, AlixPartners, a restructuring firm, estimates that over the next 24 months there will be a fourfold increase in the number of retailers in deep distress — companies that bestow not have enough working capital or are unable to finance their debt.

“Unfortunately, this is the new normal,” said Matthew Katz, a intriguing director in the retailing practice of AlixPartners.

Retailers had undivided of the worst holiday shopping seasons in decades, with sales falling by double digits in nearly all categories, including equipment, luxury goods, furniture, and electronics and appliances, according to SpendingPulse, a report by MasterCard Advisors that estimates retail sales from all forms of payment.

Like various retailers, Parent Co. was hit hard through the freeze in consumer spending.

To attract consumers during the crucial holiday shopping temper, eToys offered up to 60 percent from more than 1,300 toys and games, including brands parallel Hannah Montana, My Little Pony and TMX Elmo.

Original text: http://seattletimes.nwsource.com/html/businesstechnology/2008571510_retailbankruptcy30.html?syndication=rss