The “retail apocalypse” continues with more store closings on the way.
2019 has already seen 7,888 store closures, with major companies such as Payless ShoeSource, Gymboree, Gap, and Dressbarn announcing nationwide closings. This number already outpaces the 5,844 total store closures seen in 2018. Experts point out that, if these high rates continue, then we could see as many as 12,000 store closures by the end of 2019. Concerned about this so-called retail apocalypse and what it means for the real estate market? Your commercial realty advisors weigh in.
- Major Brand Closures
The liquidation of Payless resulted in 2,100 shutdowns this summer. This accounts for the most significant chunk of store closures that we’ve seen so far this year. The liquidation of Gymboree, Charlotte Russe, and Shopko contributed another 749, 500, and 371 closures, respectively. Dressbarn will close all of its 650 locations, and Charming Charlie’s will close it’s 261 stores after both filed for bankruptcy. Finally, Barney’s New York and Perkins/Marie Callender’s will close 15 and 29 locations, respectively after announcing that they will be filing for Chapter 11.
- Finding the Ideal Balance
Many brands are closing underperforming locations as they try to find the right mix between physical stores and online retail. For instance, Abercrombie & Fitch will close 40 locations in favor of investing in their online shop and their other existing stores. The Gap will close 230 stores over the next two years in order to focus on their more successful Old Navy brand. The list goes on from here.
- Is Online Shopping to Blame?
While the rise of e-commerce is undeniably a factor in many of these store closings, it is not the only issue. Many stores are struggling because they haven’t changed according to consumers’ tastes. Today, these brands have become overstored, outdated, and left with too much debt.
This is what your commercial realty advisors have to report on 2019 store closures. Are you interested in staying up to date with all the major commercial real estate news? If so, then contact the experts at California Commercial Realty Advisors, Inc. Our dedicated team is eager to assist you with all your real estate needs today.