It is no secret that retailers have been struggling in recent years as online shopping rises. You may not realize, however, that 2019 saw more than 9,000 retail stores close. The official figures related to Closures in 2019 still need to be calculated now that the year is over. Still, based on preliminary data, it is clear that 2019 saw significantly more closures than 2018.

The Report From Coresight

The figures came from a Coresight report from mid-December 2019. That report looked at how many stores had closed already in the year, projections for the last few weeks, and comparisons with past years.

Important Figures

The report from Coresight indicated that by December 20, 2019, 9,302 stores had already closed. By comparison, 2018 only saw a total of 5,844 closures. This means that even though there were under two weeks left in the year, 2019 already had 60 percent more closures than 2018.

Interestingly, there was also an increase in store openings from 2018 to 2019 of 1,000, with 2019 seeing 4,454 openings. More importantly, the number of closures passed the total number of openings.

Multiple Causes for Closures

The closures occurred for multiple reasons, with each retailer dealing with a unique set of circumstances. Some stores needed to downsize. The most common reason, however, was bankruptcy liquidation.  In addition to the closures, many stores reduced or adjusted their footprints to remain open despite declines.

Prominent Closures in 2019

Among the 9,000 closures in 2019 were prominent businesses that used to be leaders in the retailer world. Payless, for example, filed for Chapter 11 in February, marking the second time it had done so in under two years. This was the most significant retail liquidation based on store count, ever. It accounts for almost a quarter of the closures in the figure.

Other prominent store closures that involved more than 100 closures each included Charming Charlie, Charlotte Russe, Shopko, Gymboree, and Fred’s.

Interestingly, even retailers who are doing relatively well had some closures or footprint reductions as a way to counter the declining sales in specific areas of the business. These include Walgreens and Family Dollar.

Some of the closures were from companies that are struggling but have not hit bankruptcy. These include Dressbarn from Ascena and Pier 1. In this case, closing stores is a way for the companies to minimize losses before an all-out financial crisis occurs.

Coresight research predicts that this increase in the number of closures will continue as the retail market is still “over-spaced.”

Source:

https://www.retaildive.com/news/store-closures-pass-9k-in-2019/569597/

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