Store Closings Tripled This Year
America’s retail sector is facing Armageddon. Many U.S. retail companies have filed for bankruptcy this year, and retail stores are closing at an unprecedented rate.
According to the latest research, the number of store closings witnessed this year in the retail sector has been triple the number of closings in the same period last year.
According to retail and technology think tank Fung Global Retail & Technology, the first half of 2017 has been the second-worst period for the American retail sector in recorded history. The worst-ever year for retail was 2008, when the country was going through the Great Recession.
According to Fung Global Retail & Technology, a total of 5,300 stores have closed in the first six months of 2017 (that is, up until June 20). By contrast, the total store closings for full-year 2008 stood at 6,163. If the trend is extrapolated, the number of store closings for all of of 2017 could surpass the 2008 closings, setting a new record as the worst year for the American retail sector.
So far this year, 345 retailer companies have filed for Chapter 11 bankruptcy protection. This accounts for a 32% jump in bankruptcy filings compared to the same time period in 2016.
Included in these bankruptcies are some very well-known American specialty retailers, including electronics store chain RadioShack Corporation, children’s apparel retailer The Gymboree Corporation, teen clothing retailer Rue21, Inc., discount footwear retail company Payless Inc, and clothing retailer The Limited (owned by L Brands Inc).
The downfall of brick-and-mortar stores is owed to the rise of electronic retailers, dubbed by some as “e-tailers.” The e-tailer that dominates the market is Amazon.com, Inc, which is the largest online retailer in America. The ease of online shopping, with swift home-delivery, is attracting more Americans away from brick-and-mortar stores. As can be expected, traditional retailers are being forced to shutter physical locations amid declining store traffic.
Of the companies mentioned above, Rue21 and Payless Inc, have closed the most stores so far this year. The pair have closed about 400 stores each, according to Fung Global Retail & Technology. The Limited has shuttered about 250 stores, while department store chain Sears Holdings Corp has closed more than 230 locations so far this year.
“Store closings have tripled so far this year,” Fox8, June 23, 2017.