Fung Global Retail & Technology’s latest read on U.S. retailing has 2017 on track to see about 9,452 store closings, which compares to 6,164 units shuttered in 2008 amid the so-called Great Recession. This represents a 53 percent increase in closures and comes despite a large number of store openings from retailers such as Dollar General, Dollar Tree and Aldi.
Managing director Deborah Weinswig said in her report that year-over-year store closings are up more than 160 percent. The projection for total closings this year represents a year-over-year increase of more than 360 percent.
The closings this year are in response to a rapid transformation of the industry driven by changes in consumer spending behavior that includes a shift to online buying, experiential purchases and an overall frugalness that is boosting sales at off-price apparel retailers, dollar stores and, as Weinswig said in her report, consignment shops.
“This past week, private equity firm Sycamore Partners has agreed to acquire U.S. office supplier Staples for $6.9 billion,” Weinswig told clients. “Meanwhile, Sears will close 20 more stores, bringing the store closure total for the year to 246. Outerwear retailer Eddie Bauer is seeking a buyer, due to a heavy debt burden, while Bed Bath & Beyond is considering shuttering stores in the next few years as leases are set to expire. Finally, online consignment and thrift retailer ThredUp is moving into the brick-and-mortar space with plans to open five stores in 2017.”
The report noted that year-to-date, RadioShack leads in store closures with 1,000 and is followed by Payless Inc. with 512, Gymboree with 450 and Rue21 with 400. And Ascena Retail Group has closed 400 so far this year, while The Limited has shuttered 250.
Regarding store openings, Weinswig said Dollar General has opened the most year to date with 1,290 followed by Dollar Tree with 650, Aldi with 400 and TJX Cos. Inc. with 111.
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