Trumponomics Could Result In 12k Store Closings (#GotBitcoin?)
More store closings coming: An estimated 12,000 shops could close by the end of 2019. Trumponomics Could Result In 12k Store Closings (#GotBitcoin?)
There will be absolutely zero entry-level jobs for young (or old) people.
The retail apocalypse isn’t showing any signs of slowing down.
Eight months into 2019, there have already been 29% more store closings announced than in all of 2018, according to a new report from global marketing research firm Coresight Research.
Based on Coresight Research’s figures, retailers’ earnings reports, bankruptcy filings and other records, more than 7,600 stores are slated to shutter this year and thousands of locations already gone.
Bankrupt footwear company Payless ShoeSource, which closed its remaining U.S. stores in late June, accounts for about 37% of the closings.
The “going-out-of-business” sales and liquidation of other brands is expected to continue. Coresight estimates closures could reach 12,000 by the end of the year, the report said.
Coresight, which has offices in Manhattan, London and Hong Kong, tracked the 5,864 closings in 2018, which included all Toys R Us stores and hundreds of Kmart and Sears locations.
Plus-Sized Retailer Avenue Will Be Closing All 222 Stores
Another Plus-Sized Women’s Retailer Will Be Closing Its Doors
Avenue Stores LLC, owned by private-equity firm Versa Capital Management, has decided to shutter all 222 of its retail locations, Hilco Merchant Resources said in a statement announcing the closures. The company, which operates in 33 states, has hired Hilco and Gordon Brothers to oversee inventory sales.
Versa, Avenue, Gordon and Hilco didn’t reply to requests for comment. Calls to stores in New Jersey, New York and Florida directed Bloomberg to the corporate office in Rochelle Park, N.J., where calls weren’t answered.
Retail Dive And Dow Jones Reported On The Closures Earlier
The specialty plus-sized apparel industry has been under pressure as online rivals like Amazon.com Inc. and big-box retailers from Walmart Inc. to Target Corp. increasingly compete in the space. Plus-sized women’s retailer Fullbeauty Brands Inc. filed for Chapter 11 earlier this year before winning court approval for its plan to restructure the company in less than 24 hours.
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The record year for closings was 2017, with 8,139 shuttered stores, Coresight found. This included an earlier round of Payless closings, the entire HHGregg electronics and appliance chain, and hundreds of Sears and Kmart stores.
The pain is expected to continue into future years, according to an April report from UBS Securities.
Retail Bankruptcies Rise, Store Closures Skyrocket In First Half of 2019
Store closures in the first six months of the year have already exceeded the number of bricks-and-mortar stores closed in all of 2018.
The pace of retail bankruptcies and store closures in the U.S. has accelerated so far this year compared with 2018, due in part to last year’s lackluster holiday shopping season, a new report finds.
More retail bankruptcy filings are expected in the second half of the year, and bricks-and-mortar stores will continue to close at a higher rate, according to a report released Wednesday by professional services firm BDO USA LLP.
“We’re going to see this trend continue,” said David Berliner, who leads the business restructuring and turnaround services practice of BDO, which provides assurance, tax and advisory services. While retailers are expected to keep falling in the second half of the year, the torrid pace should slow, Mr. Berliner said.
“I don’t think the pace of the bankruptcy filings will be as large as it was in the first half,” he said.
Talk of a retail apocalypse has echoed throughout the industry for years as shoppers abandon the nation’s malls and flock to online sellers. But the expected increase in bankruptcies and closures means the industry’s recent pain shows little sign of easing.
Retailers continue to grapple with excessive debt, over expansion, private equity-ownership pressures and changing consumer behavior. On top of that, retailers were hurt by the 2018 holiday season, which failed to meet expectations, resulting in the weakest retail sales performance since December 2009, BDO found.
Retail sales in the first half of the year were also hit by smaller tax refunds for the average taxpayer, trade tariffs, the longest government shutdown in U.S. history and inclement weather, which led some retailers to offer deep discounts to move merchandise, according to BDO.
In the first half of 2019, 14 retailers with 25 or more stores filed for bankruptcy, including Payless ShoeSource Inc., Gymboree Group Inc. and Charlotte Russe Holdings Corp., BDO found. That is up slightly from 13 retailers with 20 or more stores during the same period in 2018.
Over the summer, several more retailers—including Charming Charlie Holdings Inc., Barneys New York Inc., A’Gaci LLC and Avenue Stores LLC—filed for bankruptcy.
The number of store closures from January to June has already exceeded the number of bricks-and-mortar stores closed in all of 2018. About 19 retailers announced they would close a total of more than 7,000 stores so far this year, already topping all previous full years, BDO found.
Many of those closures were due to companies filing for bankruptcy, including ShopKo, Charming Charlie and Things Remembered. The bankruptcies of Payless, Gymboree and Charlotte Russe alone led to the closure of about 3,700 stores, according to BDO.
To reduce the expense of maintaining a physical presence, some retailers are dropping their flagship stores and opting for smaller locations in prime urban areas.
For the full year, Coresight Research predicts more than 12,000 stores will close, compared with a total of under 6,000 in 2018. Behind the closures are some retailers going out of business, while others are just reducing their physical footprint.
But it isn’t all bad news. Despite the large number of bankruptcy filings and store closures, overall retail sales in the first six months of the year remained solid because of a strong economy, low unemployment and rising wages, BDO said.
The risk of a significant downturn in the retail sector is slim for the remainder of the year, but retailers should still remain cautious heading into 2020 because of the trade dispute with China and record consumer debt, the report said.
“If the economy does stumble a little bit, things can get painful,” Mr. Berliner said. “That can have a devastating effect on the weak retailers who can’t afford that sales dip in the holiday season.”
UBS analysts said 75,000 more stores would need to be shuttered by 2026 if e-commerce penetration rises to 25% from its current level of 16%.
A separate analysis by UBS said tariffs on Chinese imports could put $40 billion of sales and 12,000 stores at risk.
“The market is not realizing how much brick & mortar retail is incrementally struggling and how new 25% tariffs could force widespread store closures,” UBS analyst Jay Sole wrote in the May report. “We think potential 25% tariffs on Chinese imports could accelerate pressure on these company’s profit margins to the point where major store closures become a real possibility.”
Charming Charlie Store Closings: Retailer going out of business, will close all 261 stores in Chapter 11 bankruptcy
Closing All Locations:
Thousands of locations have already closed this year with the final Payless stores finishing their liquidation sales in June. All Charlotte Russe stores closed in April.
Payless ShoeSource: 2,589 (includes 248 Canada locations and 114 smaller-format stores in Shopko Hometown locations).
Gymboree/Crazy 8: 749
Dressbarn: 649. Here are the locations closing in July and August.
Charlotte Russe: 494;
Charming Charlie: 261
LifeWay Christian Resources: 170
Henri Bendel: 23
E.L.F. Beauty: 22
Topshop: All 11 U.S. stores
Barneys New York Bankruptcy: Luxury retailer files for bankruptcy and announces 15 closing stores.
Perkins, Marie Callender’s Bankruptcy: Restaurant chain filed for bankruptcy after closing 29 locations
Some of the announced closures may carryover into 2020, which was the case with several closings announced in late 2018 such as Lowe’s, Sears and Kmart. Gap Inc. announced Feb. 28 it would close roughly 230 stores over two years. Some retailers also are opening new stores while closing locations including Bath & Body Works and Abercrombie & Fitch.
GNC: 192 stores closed in first six months of year; up to 900 over the next three years.
Family Dollar: As many as 390 stores
Fred’s: 442; the company said July 12 it would close another 129 stores.
Chico’s: 74, but 250 over the next three years.
Gap: Roughly 230 in next two years
Foot Locker: 165, total includes closings outside of the U.S.
Signet Jewelers: The parent company of Kay, Zales and Jared said it would close another 150 stores.
Pier 1 Imports: 57, but up to 145 could close.
Ascena Retail: 120
Destination Maternity: 117
Sears: 21 more stores will close in October; 72 stores closed earlier this year
Victoria’s Secret: 53
Vera Bradley: 50
Office Depot: 50
Kmart: Five more stores will close in October; 48 stores closed earlier this year
Party City: 45
Sears Hometown and Outlet Stores: 45
The Children’s Place: Up to 45
Z Gallerie: 44
Stage Stores: 40 to 60
Bed Bath & Beyond: 40
Abercrombie & Fitch: 40
Francesca’s: At least 30 stores
Build-A-Bear: Up to 30 over two years
J.C. Penney: 27
Bath & Body Works: 24
Southeastern Grocers: 22
Saks Off 5th: 20
J. Crew: 20
Barneys New York: 15
Whole Foods: 1
Calvin Klein: 1
Pottery Barn: 1
Source: Coresight Research; staff research
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