It’s not unusual to see retailers announce store closings right after the holiday season, but this year seems a bit extreme.
The latest major announcement was by discount department store retailer Kohl’s, which will close 18 stores around the country. It is reportedly the first time the company is shutting a large group of stores at once.
Meanwhile, Sports Authority has filed for Chapter 11 Bankruptcy protection, and is closing 140 of its 450 stores over the next three months.
These announcements follow other big ones that were revealed earlier in the year. Both Macy’s and Walmart are having significant store closures this year. Macy will shut 40 locations, while Walmart is closing 154 units across the country, including all 102 small-format concept Walmart Express, which was supposed to compete with dollar and drug stores.
Here is a pretty definitive list of the retail stores closing this year.
Besides the ones already mentioned up top, several smaller stores that are part of large chains, apparel in particular, are closing hundreds of locations. Children’s Place is shutting 200, Aeropostale has 175 closings in the works, approximately 150 American Eagle Outfitters are set to shut and Chico’s plans to close 120.
Obviously, all of this is bad news for shopping-center owners. Even though these locations likely needed to be pared back because they were unproductive, it still means a lot of vacant stores across the country.
Why is this happening? There are several reasons. Some of these stores are having trouble competing with online-only stores, namely Amazon.com. Others probably just had too many locations in the first place. And some of these traditional chains have not adapted well to experiential retail that consumers are now expecting — people want a reason to go to a store rather than to just buy a good. It has certainly worked for Apple Stores, which have the highest sales per square foot in the country. You can buy all of these Apple products online, but people like the experience of the stores.
It’s not all bad news, though. Several retailers have 2016 (and beyond) store-opening plans. Nordstrom is opening 15 units through next year, which should make up for some of the Macy’s vacancies. Dollar stores are expanding like crazy, opening hundreds of units. Grocer ALDI plans significant expansion on the West Coast, and apparel retailer Forever 21 has 600 units on tap over the next couple of years. Plus, there are always new concepts that entrepreneurs will roll out.
As the consumer tastes and demands change, we are sure to see more dynamics. As in any industry, the businesses that can’t change with the times are going to have trouble sticking around.
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