Retailing can be an unforgiving business, especially in clothing, where fast-changing fashion trends and consumer tastes can make or break companies. Add dependence on tourism for customers, and retailing becomes even more of a high-wire act.

Hilo Hattie had largely thrived, but occasionally struggled, over 45 years of selling aloha attire mostly to tourists. However, yesterday it sought protection from creditors by filing for Chapter 11 bankruptcy.

Some local industry observers said there likely will be other Hawai'i retailers forced to reorganize through bankruptcy, or sell to larger players or close, given the increasing decline in the local economy largely driven by a big drop in tourism.

During the last economic downturn, longtime kama'aina retailers that filed for bankruptcy included Liberty House and Crazy Shirts.

Hilo Hattie had faced financial difficulty before, especially after a failed strategy to open huge stores in Mainland cities, including Las Vegas, Miami and Nashville, Tenn.

The company closed all but two of what had been seven Mainland stores, which reduced the number of employees from about 500 five years ago to 256 today.

As part of that restructuring, Hilo Hattie brought in a new management team in early 2001 to end leases at underperforming stores.

But challenges persisted, especially after the Sept. 11 terrorist attacks and the related sharp decline in visitor arrivals.

Several years ago, the retailer launched an initiative to attract more local shoppers to its stores by offering local-style aloha shirts with subtle prints and housewares geared for kama'aina. But it has been a tough sell to change the impression of many local people who consider Hilo Hattie a kitschy store for tourists that greets customers with shell lei.