Tags: retail | apocalypse | store | closures | cushman

Cushman & Wakefield: 1,000 More Store Closures in 'Retail Apocalypse' 2018

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By    |   Monday, 08 January 2018 02:52 PM

Garrick Brown, Cushman & Wakefield vice president of retail research of the Americas, sees a tough year ahead for retailers as even more bankruptcies and strategic closings loom.

“We just had an incredible Christmas. By all accounts, master card had us at 4.9% sales boost, which would put us at the largest sales increase since the recession,” he explained to CNBC.

“Unfortunately, the less that sales rally continues throughout the first quarter and the second quarter, what's most likely going to happen this year is we're going to see a number of key retail bankruptcies most likely play out,” he said.

“Last year we saw 36 major chain bankruptcies, the largest number since 2009. This year we might not see as many, but if, for example, Sears does go down, we'll see the impact of the bankruptcies really grabbing the market in a much greater way than we saw last year. It goes down about 580 department stores,” he said.

He is keeping a wary eye on such retailers as Bon-Ton, Macy’s, J.C. Penney and Dillard’s.

“It’s entirely conceivable - We could see 1,000 department stores closing in 2018.”

The "retail apocalypse" refers to the closing of a large number of American retail stores beginning in 2016 and expected to peak in 2018.

More than 4,000 physical stores are affected as American consumers shift their purchasing habits due to various factors, including the rise of e-commerce.

Still, the wider retail industry is expected to have benefited this holiday season from surging consumer confidence and increased use of mobile phones to shop, Reuters reported.

Mastercard’s analytics arm said that shoppers spent a record of more than $800 billion during the 2017 U.S. holiday period.

The holidays can account for up to 40 percent of annual sales for some stores, and retailers have invested aggressively in promotions, technology and delivery options.

To be sure, U.S. job growth slowed more than expected in December amid a decline in retail employment, but a pick-up in monthly wage gains pointed to labor market strength that could pave the way for the Federal Reserve to increase interest rates in March.

Nonfarm payrolls increased by 148,000 jobs last month, the Labor Department said on Friday. Retail payrolls fell by 20,300 in December, the largest drop since March, despite a strong holiday shopping season.

Employment data for October and November data were revised to show 9,000 fewer jobs created than previously reported.

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Garrick Brown, Cushman & Wakefield vice president of retail research of the Americas, sees a tough year ahead for retailers as even more bankruptcies and strategic closings loom.
retail, apocalypse, store, closures, cushman
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2018-52-08
Monday, 08 January 2018 02:52 PM
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