US store closures running at twice the rate of 2016
The rate of US store closures four months into 2017 is double that of the same time last year according to think tank Fung Global Retail & Technology.
But the rise of discounters and online-to-offline retailers is significantly helping reduce the net loss.
So far this year, 3296 store closures have been announced as major retailers either exit bricks-and-mortar channel entirely (Bebe), rationalise their network (Macy’s) or enter Bankruptcy (Payless Shoes, Radio Shack, HH Gregg, Gordmans, Gander Mountain).
On the plus side, says Fung Global Retail & Technology MD Deborah Weinswig, so far in May, store openings are up 20 per cent, year-on-year. That was aided by e-commerce driven menswear chain Bonobos which says it will add 20 Guideshop showrooms by year’s end.
“The industry is in the middle of a major disruption, but there are bright spots, including Bonobos’ commitment to physical retail. As we’ve seen, some retailers are continuing to expand, even as store closures are up markedly from 2016,” said Weinswig. “We’ve created this report series to provide the facts as they are announced, while adding context to paint an accurate portrait of the state of the industry.”
Overall, closings have been announced for 3296 stores for 2017, up 97 per cent from the same period last year, the report says, with most of the shuttering closing units falling within the department and specialty store categories.
Meanwhile, value-driven concepts such as Dollar General, Dollar Tree, Aldi and TJX have announced major expansion plans. German grocer and Aldi rival Lidl, will open its first three stores in the US this summer. In all, Fung Global Retail & Technology has tracked 2573 announced store openings thus far in 2017.
“Value-driven concepts such as discount and fast fashion have been aggressive in expanding their store footprint, despite the difficult retail environment. Categories such as beauty and athleisure are outperforming the market, which is evident in their footprint expansion over the past 15 months,” said Weinswig.