Email
Password
Remember meForgot password?
    Log in with Twitter

article imageAlmost 10,000 retail stores expected to close in 2017

By Karen Graham     Apr 23, 2017 in Business
Retail stores across the U.S. are closing their doors at a record-breaking rate this year - victims of decades of overbuilding and a rise in online shopping.
Just this last week, Bebe Stores Inc, a women's apparel chain, announced it was closing its remaining 170 stores and will concentrate on online sales. Teen retailer, Rue21 Inc also announced it would close about 400 of its 1,100 stores, reports the Wall Street Journal.
Last month, it was Staples, and in February, JC Penny announced the closure of some of its stores. And from the look of it right now, says CNN Money, the year 2017 will turn out to be an epic year of store closings, with at least 8,600 brick-and-mortar stores forecast to close their doors this year, according to brokerage firm Credit Suisse.
In its report, Credit Suisse cites statistics showing 2,056 stores closed down in 2016 and 5,077 were shuttered in 2015. The year 2008 turned out to be the worst year for retailers, with 6,163 stores shut down. "Barely a quarter into 2017, year-to-date retail store closings have already surpassed those of 2008," when the Great Recession was raging, the report says.
The former Camp Snoopy Amusement park before it was Nickelodeon Universe at the center of the Mall o...
The former Camp Snoopy Amusement park before it was Nickelodeon Universe at the center of the Mall of America in Bloomington, Minnesota.
Jeremy Noble from St. Paul
And with retail stores disappearing from America's iconic shopping malls, leaving hundreds of empty slots to be filled, you may be surprised to know those empty spaces account for 10 percent of U.S. retail space, or nearly 1 billion square feet.
Additionally, when the Labor Department released its job figures on April 7, the report showed that retailers cut almost 30,000 positions in March, about the same number of jobs they cut in February, making the two-month span the worst showing since 2009, reported Bloomberg.
A neighborhood center in the form of a strip mall  in Cornelius  Oregon
A neighborhood center in the form of a strip mall, in Cornelius, Oregon
M.O. Stevens
What is going on with all these closings?
Surprisingly, the 2016 holiday shopping season was one of the retail sector's best years. However, much of it came from online shopping, where the profit margin is lower due to technology and shipping costs. And this is the main reason behind the closures of so many brick-and-mortar stores.
It is just too difficult to compete against E-commerce giants like Amazon. They have become masters at online shopping. But Amazon and other entities like them are not the only reason for the closures. The Daily Caller points out that many retailers misread the economic picture a few years ago, opening more stores than were needed.
You could compare the picture to just about any city or town in this country. When one store opens on a corner and seems to be doing great, three other stores will open right around the first one, and then, no one does great.
A Walmart store  anchors  a shopping mall.
A Walmart store "anchors" a shopping mall.
Ben Schumin
“Thousands of new doors opened and rents soared” after the retail sector’s boom in the late 1990s and early 2000s, Richard Hayne, CEO of Urban Outfitters said. “This created a bubble, and like housing, that bubble has now burst.”
Defaults are also contributing to the trend in closings. Payless is closing 400 stores after filing for bankruptcy earlier this month. HHGregg Inc., Gordmans Stores Inc., and Gander Mountain Co. all entered bankruptcy this year and RadioShack has filed for Chapter 11 for the second time in two years.
We will undoubtedly be seeing some major changes in the retail market over the next several years as companies review their profit margins and reorganize their business structures to compete in the new world of E-commerce.
More about retail stores, closures in 2017, overbuilding, Online shopping, Economy
More news from
Latest News
Top News