The Pain Is Far from Over for Retail Giants
As the U.S. retail giants continue to grapple with an overabundance of locations and poor sales in recent years, many are shutting their doors and seeking bankruptcy protection.
According to a new report on store activity and retail health created by the credit consulting firm F&D Reports, more than 3,600 stores have been slated to close since January, and as many as 10,000 are expected to be shuttered by the end of the year. This continues what has been a few years’ trend of devastating results for retail stores.
The report from F&D finds 34 companies the most vulnerable in the U.S., meaning they are the most likely to announce mass store closings and/or find themselves filing for bankruptcy should sales stay in the gutters.
The list includes some of the biggest and most renowned stores in the world like J.Crew Group, Inc., Toys “R” Us, Inc., and Forever 21, among others.
Should they announce mass closures, they would join the ranks of Sears Holdings Corp (NASDAQ:SHLD), J C Penney Company Inc (NYSE:JCP), and a whole host of other large retail box stores that have experienced a large number of location shutdowns in recent years.
Recent years have seen several these stores suffer from what was a boom-time explosion and mass proliferation in the 1980s and 1990s, coupled with the shift towards e-commerce and other alternatives to shopping in physical locations.
Discount stores, while not immune to the troubles affecting the industry, are one of the few types of big retails stores that have managed to stay afloat.
And while the problem is one that is certainly worldwide, nowhere has felt the impacts worse than the U.S. With about 24 square feet of retail space per capita, that far exceeds the averages of other nations in the world. Canada and Australia, the next two countries down on the list, have rates of about 16 square feet and 11 square feet respectively.
The malaise being felt in the retail sector is not only being felt by the businesses and their employees. Smaller communities and poorer neighborhoods that rely on these retail stores to provide jobs and bring in capital to these areas are bearing the brunt of the hurt when these stores do close, often being left with fewer jobs, fewer people able to pay taxes, and weaker economies as a result, sometimes leading to community bankruptcy.
“34 companies that could be the next to announce mass store closures,” Business Insider, May 25, 2017.