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Retail Apocalypse Redux: 4,810 Store Closures Announced This Year

closing down signs in high street shop window

Friday, 08 March 2019 02:59 PM

The retail apocalypse is alive and well despite being drowned out in the mainstream media by government shutdowns and trade-war tariffs.

According to Coresight Research, 4,810 store closures have been announced by retailers so far this year, CNBC reported.

Meanwhile, Coresight said it’s tracked about 2,264 store openings so far in 2019, including some by fitness brand Peloton, Ulta Beauty, online apparel company Indochino and Ross Stores.

CNBC described a brutal week for malls and shopping centers across the U.S.:

  • Dollar Tree said this week it will be closing up to 390 Family Dollar stores.
  • Apparel retailer Abercrombie & Fitch said it plans to shut 40 stores.
  • Bankrupt clothing company Charlotte Russe has started liquidation sales and now will shut all of its more than 500 stores, up from its previous plans to just close 94 locations.
  • Amazon said this week it’s closing all 87 of its pop-up shops in Whole Foods stores, Kohl’s stores and malls across the U.S., starting in April.

“I think the store rationalization will continue. We are still over-stored,” Marie Driscoll, managing director of luxury and fashion for Coresight, said. “But in some places — the A malls — people are panting to get into those locations. So it’s all a question of where you are and what you’re paying to be there. But the overall, secular trend is still for store rationalization.”

To be sure, the head of the biggest mall owner in the U.S. last month cautioned that more retailer bankruptcies are coming. Economists are increasingly worried about a recession in the next year, Bloomberg explained.

And even relatively strong store chains like Macy’s Inc. and Kohl’s Corp. have warned that their results over the holiday shopping season were lackluster.

All this adds up to what Barry Bobrow and Lynn Whitmore at Wells Fargo Capital Finance see as a prolonged restructuring for the industry. It’s becoming increasingly difficult for retailers to delay their day of reckoning as they struggle with high debt and make necessary investments in online commerce.

“We’re heading more and more into a distressed market,” said Bobrow, managing director at Wells Fargo Capital Finance. Whitmore, managing director of retail finance, says retailers are laboring under debt levels that “just eclipses anything we saw in the recession.”

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Retail Apocalypse Redux: 4,810 Store Closures Announced This Year
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Friday, 08 March 2019 02:59 PM
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