Brick-and-Mortar Stores Are Shuttering at a Record PaceYears of overbuilding and the rise of online shopping have come to a head; malls as ‘energy suckers’ snip....
Through April 6, closings have been announced for 2,880 retail locations this year, including hundreds of locations being shut by national chains such as
Payless ShoeSource Inc. and
RadioShack Corp. That is more than twice as many closings as announced during the same period last year, according to Credit Suisse.
Based on the pace so far, the brokerage estimates retailers will close more than 8,600 locations this year, which would eclipse the number of closings during the 2008 recession.
At least 10 retailers, including apparel seller
Limited Stores Co., electronics chain
Hhgregg Inc. and sporting-goods chain
Gander Mountain Co.,
have filed for bankruptcy protection so far this year. That compares with nine retailers that declared bankruptcy, with at least $50 million liabilities, for all of 2016.The seeds of the industry’s current turmoil date back nearly three decades, when retailers, in the throes of a consumer-buying spree and flush with easy money, rushed to open new stores. The land grab wasn’t unlike the housing boom that was also under way at that time.
“Thousands of new doors opened and rents soared,” Richard Hayne, chief executive of Urban Outfitters Inc., told analysts last month. “This created a bubble, and like housing, that bubble has now burst.”
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