Stores that once opened with pomp and circumstance are now seeing darker days as a number of retail store closures in 2018 have been announced.
Sears Holdings Corp (NASDAQ:SHLD) is facing challenges as people now prefer shopping online rather than walking into a store to buy things. This year, it has already shuttered 350 Sears and Kmart stores across the country.
Following in tow is Bon-Ton Stores Inc (OTCMKTS:BONT). It has been reporting weak quarterly results and a decline in sales as customers increasingly turn online.
Target Corporation (NYSE:TGT) also seems to be facing the Amazon.com, Inc. effect with a number of stores shutting down, resulting in layoffs.
Belk, Inc. and Crocs, Inc. (NASDAQ:CROX) are also in the same boat with a number of retail store closures in 2018.
Sears Holdings Store Closures in 2018: 63 Under-Performing Stores Will Close by January
Sears, a household brand that catered to everything Americans needed from kitchen staples to gardening tools, was once a retail favorite among people from all walks of life. But as the online shopping craze took hold and persuaded shoppers to stay at home to order the things they needed, stores started seeing declining cash flows and revenue.
A filing with the Securities and Exchange Commission states that Sears needs to make additional money from its existing assets or borrow more to remain in business. But none of this seems to be happening. Sears Holdings store closures will affect 63 locations across the country in the coming year.
The company has also initiated a turnaround plan and aims to cut around $1.0 billion in costs yearly. Shedding low-performing stores is the main component of this turnaround plan. Sears is also looking at selling off brands to other players such as Black & Decker Corporation and Amazon in order to reduce its debts.
It has also decided to run a nearly month-long sale for members of its loyalty program to court customers. Discounts range from 10% to 50% on all items.
Bon-Ton Store Closures in 2018: At Least 40 Stores to Close
Bon-Ton, the department store that stocks footwear, apparel, jewelry, furniture, and other household items, also seems to be facing several challenges from online retail. It began as a humble millinery and dry-goods store in 1898 before expanding in the mid 1900s. Over the decades, it grew to 267 locations worldwide with revenues of $2.8 billion in 2016.
Things have started looking very grim over the last year or so. Bon-Ton began to see a decline in revenues and several non-performing or low-turnover stores had to be shut down. The announcement of Bon-Ton store closures in 2018 followed a familiar pattern in the retail industry. While the company is trying to save itself by selling real estate, thus generating some cash, the challenge lies with its original expansion model.
Bon-Ton owns only 10% of its stores worldwide. The rest are on lease for a fixed duration. With sales performance and profitability decreasing, not much help can be expected by selling real estate. The employees in these stores also see a bleak future.
Target Store Closures in 2018: 12 Non-Performing Discount Stores to Close by February
Target Store closures in 2018 have also become big news. 12 of the discount chain’s stores will be closing next year. This should leave Target slightly better off as the stores are non-profitable and seem to be dragging down revenues.
The shutdown of Target’s under-performing stores is indicative of what the entire retail industry is facing. Customer volumes in stores are decreasing, and adding oil to the fire, e-commerce companies are providing discounts and offers for online purchases.
Belk Store Closures in 2018: Department Stores in West Virginia & Atlanta to Shut Down, Job Cuts to Follow
Earlier this month, Belk also announced the closure of two stores in 2018. A number of layoffs are imminent. Commenting on the Belk store closures in 2018, spokesperson Andy Izyquierdo said the company “just made the strategic decision to close based on the best path forward for our business.”
Crocs Store Closures in 2018: Several Locations Across U.S. to Shut Down after Revenue Declined in Fourth Quarter
Footwear retailer Crocs is shutting down 160 stores out of a total of 558 by the end of 2018. This announcement of the Crocs store closures came earlier this year with the fourth-quarter and full-year 2016 earnings report. Its fourth-quarter net losses were $44.5 million and fiscal-year revenue was $1.04 billion. According to a Retail Dive report, Crocs is closing about 28% of its stores worldwide.
E-Commerce Turning up the Heat in Retail
A number of big players in the market are seeing negative growth amid a Retail Apocalypse, resulting in store closures and layoffs as they try to compete with the very fast-paced e-commerce industry. Many of them have jumped on the e-commerce bandwagon and started offering their products online as well as in stores. This might end up making a few jobs redundant in warehouses or stores, but looking at the positive side, it will also create jobs in IT to maintain online marketplaces.
Another 60-plus Sears, Kmart stores set to close in January 2018; see the list; November 3, 2017, last accessed, November 24, 2017
Belk to close two stores next year; November 14, 2017, last accessed November 24, 2017
Crocs to close 160 stores by the end of 2018; March 2, 2017, last accessed November 24, 2017
Crocs to close 160 stores by 2018; March 3, 2017, last accessed, November 24, 2017