New York (CNN Business)America has too many stores.
This year, US retailers have announced that 5,994 stores will close. That number already exceeds last year’s total of 5,864 closure announcements, according to a recent report from Coresight Research.
Bankruptcies in the retail sector are piling up and chains have aggressively closed under-performing stores. That has led to an uptick in store closures this year.
Payless, Gymboree, Charlotte Russe and Shopko have all filed for bankruptcy this year and will close a combined 3,720 stores, according to the report. The majority of those are because of Payless, which filed for its second bankruptcy in February and said at the time it would shutter 2,100 stores in the United States.
Other retailers, such as Family Dollar, GNC (GNC), Walgreens (WBA), Signet Jewelers (SIG), Victoria’s Secret and JCPenney (JCP), are struggling and are shrinking their store footprints to save money.
Family Dollar will close 359 stores this year, while Signet Jewelers, the parent company of mall stalwarts Kay, Jared and Zales, will close 159.
Even thriving retailers such as Target (TGT)and Walmart (WMT) are quietly closing a handful of their stores — although those companies are opening some, too. And department stores such as Nordstrom (JWN), Kohl’s (KSS) and Macy’s (M) are shuttering a few stores each.
Thousands more store closings could be on the way in the coming years as online shopping replaces purchases at physical stores.
“The flood of store closures will likely continue for quite some time,” said Coresight Research CEO Deborah Weinswig.
Online sales make up around 16% of retail sales today, but they will rise to 25% by 2026, UBS analysts estimated in a research report last week.
That could force up to 75,000 stores to close by 2026, including more than 20,000 clothing stores and about 10,000 consumer electronics stores, UBS estimates. Thousands of home furnishings and sporting goods stores will also need to close as online shopping grows rapidly.
Some retailers are opening stores, though. The Coresight report noted that this year, retailers have announced they will open 2,641 stores. The discount sector in particular is growing: Dollar General announced it will open 975 stores this year.
Meanwhile, eccentric discount chains like Ollie’s Bargain Outlet (OLLI) and Five Below (FIVE) are expanding. Discount grocers Aldi and Lidl also plan to open hundreds of stores in the United States to reach customers who are shopping for cheap groceries.
https://www.cnn.com/2019/04/16/business/store-closures-retail-bankruptcies/index.html