Year-to-Date Store Closures Up by 162%

Dollar Currency in Jeans Pocket
iStock.com/SUNG YOON JO

While no major store closures were announced for the week ended July 28, 2017, it continues to be an abysmal year for the U.S. retail industry with year-to-date store closure announcements up 162% year-over-year at 5,442.

With five more months left in 2017, that number is sure to rise significantly. According to one report, U.S. store closures are projected to hit 9,452 by the end of the year, for a year-over-year increase of 361%.

So far this year, RadioShack Corp leads the pack with 1,000 stores closed year-to-date. This is followed by Payless Inc (NYSE:PSS, 512); Rue21, Inc. (400); Ascena Retail Group Inc (NASDAQ:ASNA, 400); The Gymboree Corp (350); Sears Holdings Corp (NASDAQ:SHLD, 289); and L Brands Inc (NYSE:LB, 250). Rounding out the top 10 are hhgregg, Inc. (220); GameStop Corp. (NYSE:GME, 190); and bebe stores, inc. (NASDAQ:BEBE, 190).

Despite a lack of announced store closures this week, a number of major acquisitions were announced which could impact a large number of retail positions. The biggest announcement was Michael Kors Holdings Ltd (NYSE:KORS) announcing the acquisition of Jimmy Choo PLC for $1.2 billion. The move is thought to be a response to Coach Inc’s (NYSE:COH) recent acquisition of Kate Spade & Co. and comes at a time of declining sales and store closures at Michael Kors.

With this acquisition, Michael Kors will expand beyond its own brand name and grow its global footprint in the luxury footwear market.

In fiscal 2017, ended April 1, Michael Kors announced that full-year revenue declined 11.2% to $1.06 billion. The company reported a full-year loss of $26.8 million, or $0.17 per diluted share. In 2016, the company reported net income of $177.0 million, or $0.98 per share.

Back in May, Michael Kors announced that it was shuttering up to 125 stores over the next two years, as it looks to improve profitability. The company expects the store closures to save it $60.0 million annually.

Meanwhile, Iconix Brand Group Inc (NASDAQ:ICON) announced that it reacquired the remaining 50% interest in Iconix Canada from its joint venture partner for $19.0 million. Iconix Canada was formed in 2013 and has licenses for brands including London Fog, Ecko Unlimited., Danskin, Umbro, Ed Hardy, and Waverly.

Iconix Brand Group owns a diversified portfolio of brands across fashion, sports, entertainment, and home industries. In addition to the Iconix Canada brands, some of the firms brands include Bongo, Buffalo, Candies, Joe Boxer, Massimo, Mudd, and Pony.

Sources:

Weekly Store Openings and Closures Tracker #17,” Fung Global Retail & Technology, July 28, 2017.

Michael Kors Holdings Limited to Acquire Jimmy Choo PLC for 230 Pence Per Share in Cash,” Michael Kors Holdings Ltd, July 25, 2017.

Michael Kors Holdings Limited Announces Fourth Quarter and Annual Fiscal 2017 Results,” Michael Kors Holdings Ltd, May 31, 2017.

Iconix Brand Group Acquires 100% Ownership of Iconix Canada,” Iconix Brand Group Inc, July 20. 2017.

Categories: Job Cuts, News

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