The number of retail store closures in the first few months of 2019 is up by 23 percent from this time last year, according to a new report by Coresight research as of March 8.
With the relentless ease and cheapness of online shopping, consumers are changing their habits from taking trips to the mall to having packages delivered to their doorsteps.
The report found that in 2018, 5,524 store closure announcements were made during this time.
During week 10 of 2019, Gymboree up to 900 stores will close, Payless Shoes will close 2,100, Dollar Tree plans to close 550 stores, Charoltte Russe 512, Family Dollar 390, Shopko 251, Foot Locker 165 stores, Victoria Secret 50 stores, Gap 230, Kohls four, Target six, J. Crew six, Macy’s eight, Lord & Taylor nine, Henri Bendel 23, Beauty Brands 25, Christopher & Banks 40, and JCPenney 27 stores.
Coresight Research is a firm that tracks store openings and closures for a select group of retailers in the U.S. and the UK, as well as major U.S. store bankruptcies.
Coresight’s Report said the following factors are driving the store closures:
- E-commerce continues its relentless share gains in retail, and market forecasts call for this rate to accelerate.
- Consumer retail spending remains at a high rate, so spending can only decrease from “peak retail.”
- Retailers in the U.S. continue to open stores at a rapid pace despite flattish store-based retail sales per capita.
- Interest rates continue to rise in the U.S., putting increasing pressure on retailers with high debt loads.
- Retail bankruptcies continue at a rapid pace, with the number of filings in the first six weeks of 2019 already at one-third of last year’s total.
Payless shoe store filed for bankruptcy protection in 2017 and at the time the store had more than 4,400 locations in 30 countries, according to MoneyWise. The report by MoneyWise stated the store will close its last stores this year and is going out of business. Store closures dropped by 23 percent in 2018 with 5,500 closures from 2017’s 8,100 storefront closures.
Amazon will join this list by closing all 87 of its pop-up shop locations nationwide as well. The pop-ups sell other brands of Amazon consumer electronics products, and their existence underscores Amazon’s willingness to experiment with various retail formats and make changes based on the data collected, Coresight stated in a report.
“At the same time, the company is expanding its bookstores and four-star stores, as well as its fleet of unstaffed Amazon Go stores,” Coresight reported. “Amazon is also reportedly planning to open non-Whole Foods Market branded traditional grocery stores and considering purchasing several regional grocery chains, also according to the Journal.”
Amidst these closures, Coresight stated that more than 2,200 retail stores opened in the past three months as well. Peloton will open 100 stores and Foot Locker will open 80 new stores globally.
Some have called the closing of all of these stores from 2010-2019 the “retail apocalypse” in light of all of the stores closing. More than 12,000 physical stores have closed over this period of time due to many factors such as changing consumer habits, higher rents, bankruptcies and the rising cost of living. In a 2017 article, Bloomberg stated that the reason for the “retail apocalypse” is not as simple as Amazon.com Inc. taking market share or twenty-somethings spending more on experiences than things. “The root cause is that many of these long-standing chains are overloaded with debt—often from leveraged buyouts led by private equity firms,” Bloomberg reported. “There are billions in borrowings on the balance sheets of troubled retailers, and sustaining that load is only going to become harder—even for healthy chains.”