Disney to shutter 98 stores; Home Depot closing 15

— -- Home Depot hd and Disney dis each announced plans Thursday to close stores across the nation, the latest in a string of closings and further evidence that the slowdown in consumer spending is having a chilling effect on retailers.

"This is just the beginning," says retail analyst Jennifer Black of Jennifer Black & Associates. "We're so overstored."

Home Depot, the world's largest home improvement chain, says it's closing 15 underperforming stores and scuttling earlier plans to open 50 others. Disney is closing about 98 stores as it takes back control of its stores from Children's Place, whose subsidiary had run the Disney Store chain.

The announcements coincided with news on Thursday that consumer spending rose a weak 0.1% in March on an inflation-adjusted basis.

Hundreds of other store closings have been announced by retailers this year. But Home Depot has been especially hard hit by the real estate crisis. With far fewer houses being sold and less money for discretionary home purchases, both contractors and do-it-yourself customers are pulling back on purchases.

"There's always going to be some healthy paring back," says Bear Stearns analyst Chris Horvers. "This is something much larger with Home Depot."

Home Depot says it still plans to open 36 new stores in the USA in 2009, which represents a 1.9% store growth rate. Horvers says Lowe's low, which has about 400 fewer stores, plans to add stores at about an 8% growth rate, a pace that analysts have warned could lead to more store closings.

Sales at Disney stores fell in three of the past four quarters. Hoop Retail Stores, the subsidiary of Children's Place that was running the U.S. Disney stores, is in bankruptcy proceedings.

Other store closings:

•Talbots tlb will close its 78 men's and children's stores by September.

•Ann Taylor ann plans to close 117 stores between 2008 and 2010 to help make the retailer "a stronger, leaner company that can be more agile in responding to economic realities," CEO Kay Krill says.

•Fifteen furniture chains closed last year, up from 10 in 2006 and five in 2005, according to Furniture/Today, a trade publication. Two of the largest, Wickes and Domain, closed this year.

•Pacific Sunwear will close its 154 remaining Demo stores.

Dan Butler of the National Retail Federation cautions, however: "Closing underperforming stores happens all the time. You really have to look at store openings and store closings."

Still, Black notes that weak consumer spending has forced retailers to cut costs. That includes studying how each store performs. When the economy was robust, she says, some retailers overexpanded and now have some stores dragging down overall operating margins.

"Some of these companies really maxed out the number of stores they could open," Black says.