Retails Continues to Bear the Brunt of the Damage Done by Ecommerce
The online world is killing brick and mortar stores across the country, as a recent research note from Fitch names several massive chain retailers that may be at risk of filling bankruptcy in the next 12 months.
Retailers across the board have been hit hard by the migration of customers towards digital. From old staples like Macy’s and Sears to newer stores like rue21, many retailers have either faced bankruptcy directly or closed hundreds of stores, leaving thousands across the country without work.
Retails stores were simply unprepared for the advent of companies like Amazon, which have eaten away a large chunk of the customer base that used to shop exclusively at these big box retailers. The problem is now people can compare prices, research and buy without ever leaving their couch, a convenient experience that is frankly unparalleled in any of the retail stores.
Some brick and mortar stores have adapted to the online world better than others, however. Walmart has succeeded with a strong online offering, incentivizing its customers to shop at its online portals rather than resort to ecommerce sites.
In the research note, a number large companies were listed that Fitch believes could face bankruptcy within the year. These stores included: Sears, Claire’s Stores, Nine West, 99 Cent Stores, J. Crew, True Religion, Apparel, Charlotte Russ, Charming Charlie, NYDJ Apparels and Vince.
At this point, these companies must find a way to cope with the new way for consumers to shop or risk being left in the dust. As bankruptcy looms large on the horizon, these companies have no choice but to adjust and make their plays in the online space.
But for American workers, that will hardly benefit the hundreds and thousands who have lost their jobs because of these closures. The most deeply impacted regions include smaller towns and cities that rely on the income from these retail stores and employment numbers to help keep their regions in the black. As the retailers continue to fall, some of the U.S.’s poorer neighborhoods may be feeling the heat soon enough.
“In the wake of Gymboree’s bankruptcy filing, here are the retailers that could be next,” CNBC, June 12, 2017.