From the Gap to Family Dollar, retailers are announcing hundreds of store closures, with no end in sight.
It’s only mid-March and already a slew of prominent retailers have announced thousands of store closures around the U.S. And the pace of closings isn’t expected to slow anytime soon.
So far this year, 10 national retail chains have filed bankruptcy.
“This phenomenon definitely hasn’t abated since last year in terms of retailers that are struggling,” says Ana Lai, senior director and analytical manager at S&P Global Ratings. “They’re either filing for bankruptcy or even the ones that are still operating are looking to reduce their store footprint to be more efficient, to invest in their online channel.”
“It’s a secular shift that continues to happen, and I guess we don’t see this trend turning around anytime soon,” Lai adds.
Year-to-date U.S. retailers have already announced 4,810 store closures, reported global market research firm Coresight Research.
Last year, Coresight tracked 5,524 store closures, which was down 32 percent from a record high of 8,139 shuttered stores in 2017.
The number of store closure announcements so far in 2019 is up 23 percent vs. this time last year, according to a February Coresight report.
CoreSight researchers say there’s “no light at the end of the tunnel,” with potentially many more closures on the way due to companies currently in the bankruptcy process and more on the horizon. Coresight cites accelerated e-commerce growth, rising interesting rates and flat and falling store-based sales as factors impacting the sector.
Over just 48 hours in early March, four chains announced more than 465 store closings. Gap Inc., J.C. Penney and Victoria’s Secret blamed closures on sagging store sales following the crucial holiday shopping season. Meanwhile, Foot Locker reported sales growth more than double its expectations, yet still announced significant store closures.
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Liz Wolf | Mar 14, 2019