Will store closures worsen in 2020?
After a record number of retail stores were shuttered in 2019, the question for many entering the new year is whether even more will close this year?
More than 9,300 stores turned off their lights last year, according to Coresight Research, and three weeks into 2020, chains including Bed Bath & Beyond, Chico’s, GameStop, Gap, J.C. Penney, Lucky’s Market, Macy’s, Papyrus, Pier 1 Imports and others have announced plans to shutter locations. Cushman & Wakefield has estimated that as many as 12,000 stores may close this year.
The expectation that struggling retailers will shutter stores is strong despite denials to the contrary.
Yesterday, Fairway Market issued a statement denying a New York Post report that the 14-store New York-based grocery chain was planning to file for Chapter 7 bankruptcy and close all its locations. The grocer, the Post also reported, is in talks to sell its name and some of its properties to Village Supermarket, a publicly held operator of ShopRite stores.
Other chains are seen as the retail equivalent of a dead man walking.
Many industry watchers have long seen the demise of Sears and Kmart stores as a question of when and not if. Edward Lampert, the chairman of Transform Holdco, the parent company of the two retail chains, has been much less boisterous in objecting to reports about the coming demise of the companies than he was when he was running Sears Holdings, the previous owner of the two chains. Previously, Mr. Lampert would sporadically issue letters claiming analysts and others were just not being smart enough to see the brilliance of his plan. That, of course, was before Sears closed most of its stores.
Even the independent owners of Sears Hometown stores are questioning the long-term viability of their businesses under Mr. Lampert’s leadership. The company, which was spun off by Sears Holdings in 2012, was reacquired by Mr. Lampert last year. A Wall Street Journal report this week details the problems that Hometown stores have had in getting inventory and complaints from owners’ that their hands are tied when it comes to price matching Sears. Owners claim that, while they are able to match prices on other retailer sites, they are not able to do so when vying for business with their sister retailer.
- Can Target’s chief merchandising officer turn Bed Bath & Beyond around? – RetailWire
- Pier 1 to close up to 450 stores as it faces uncertain future – RetailWire
- Fairway Market has no intention to file for chapter 7 or liquidate all of its stores – Fairway Market
- Fairway planning to file for Chapter 7 bankruptcy, close all its stores – New York Post
- The clock is ticking for J.C. Penney – RetailWire
- Sears Woes Hit Hometown Stores – The Wall Street Journal
- Is anyone going to buy Sears’ rebranding? – RetailWire
- Will anything change for Sears after Chapter 11? – RetailWire
- Sears likely headed for liquidation – RetailWire
- Will the new plan for Sears work any better than the previous ones? – RetailWire
- Eddie Lampert is the worst – RetailWire
- Is Eddie Lampert looking to save Sears or suck it dry? – RetailWire
- Isn’t It Time Eddie Lampert Fired the CEO of Sears? – RetailWire
DISCUSSION QUESTIONS: What are the most significant factors that led to the large numbers of stores that have been shuttered in recent years? Are there retailers that you think are in particularly perilous positions?