Monday, June 15, 2020
The Retail Apocalypse Continues
By Bill Siegel
Retailers are reporting that at least 4,300 stores will close in 2020 and that this number will increase. Prior to the pandemic, Cushman & Wakefield estimated that as many as 12,000 major chain stores could close in 2020. Coresight Research predicted 15,000 store closures prior to the pandemic and have now predicted between 20,000 to 25,000 stores closures as the year continues with 55% to 60% of these closures occurring in U.S. malls. This beats the record of 9,300 locations in 2019. And these figures may continue to grow especially if the government cuts off funding to businesses.
According to Businessinsider.com, the following retailers have or will close all or some of their U.S. stores:
Closing 200+ stores:
Pier1 Imports – 450; GameStop – 320; Signet Jewelers – 300; Papyrus – 254; Victoria Secret – 238; Gap – 230; Tuesday Morning – 230; Walgreens – 200; Chico’s - 200
Closing 50-199 stores:
Wilsons Leather and G.H. Bass - 199; Destination Maternity - 183; Forever 21 - 178; JC Penney - 142; Modell’s - 153; A.C. Moore - 145; Macy’s – 125; Art Van Furniture – 125; Bose – 119; Guess – 100
Olympia Sports – 76; Sears – 51; Earth Fare – 50; Bath & Body Works – 50; Kmart – 45; Bed, Bath & Beyond – 44; Lucky’s Market – 32; Express – 31; Neiman Marcus – 20; Nordstrom – 19; Hallmark – 16; Walmart – 3
Further Trouble for Landlords
This news does not bode well for landlords who are dealing with an oversupply of vacant spaces and not enough demand to fill them. Tenants are already seeking rent abatements and/or rent reductions. Some are also seeking to downsize. Landlords, on the other hand are facing their own financial pressures, as they too, are seeking to renegotiate their loans with lenders who are growing impatient. On top of all this gloom and doom is the fact that consumer spending has declined and is expected to continue to decline.
All of this leads to the conclusion that as the retail apocalypse continues, bankruptcy filings will continue to rise as retailers and their respective shopping centers and malls find a way to reorganize and survive in these ever-changing times.
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