The massive baby boomer generation was once a demographic coveted by marketers. Just as the recession was beginning to make itself known in 2008, baby boomers alone spent a whopping $2.65 trillion.
The ensuing years have been far less heady times for the 77 million people who are considered "boomers."
The nasty economy, skyrocketing health-care costs, the busted housing market, longer life expectancies, looming retirement, and fears about the financial viability of Social Security give these folks more and more reasons to keep their wallets closed.
With this group's financial security increasingly threatened over the past several years, stocks geared toward these consumers have become far riskier bets.
Boom Times Going Bust
According to a recent Associated Press poll, 43% of the boomers surveyed were "very" or "extremely" worried about their ability to pay for medical costs. Losing financial independence was a major concern to 41% of participants.
Think about it: A great deal more of the money previously dedicated to boomers' accumulation of fun stuff and trinkets will now flow toward more high-priority areas, such as health-care expenses.
As a result, companies that specialize too closely in this once lucrative, luxury-loving demographic could be headed for a rough patch. Here are three boomer-oriented stocks that could go bust.
Harley Davidson (HOG) is no easy rider: Although the company reversed several years' worth of dwindling annual sales with an anemic 1.6% increase in revenue in 2010, headier future growth could be cut short by its aging core fan base and the nasty economic headwinds.
Talbots (TLB) is still dowdy: This retailer hasn't reported an annual increase in sales since the fiscal year ended January 2006. A poor economy is no time to execute a long-awaited turnaround, and Talbots' history of fashion misses probably won't give budget-conscious boomer women a reason to open their wallets.
Liz Claiborne (LIZ) can't escape from the big chill: Apparel manufacturer Liz Claiborne hasn't reported an annual profit or sales increase since the year ended January 2005. In 2010, sales fell 14.3% and it reported an annual loss of $2.67 per share. Even worse, it's saddled with a major debt load; its debt-to-capital ratio was a staggering 137.8% in the last 12 months.
Boomer Stocks Are a Bummer
Add in recent market volatility and the potential for a continued bearishness in the near term, and baby boomers continue to have many reasons to put off certain spending, especially discretionary purchases.
Motley Fool analyst Alyce Lomax owns no shares of any of the companies mentioned.