Daily Management Review

Two Months Into 2019, 4,300 Store Closures Announced In US Already


Two Months Into 2019, 4,300 Store Closures Announced In US Already
A number of companies announcing a spree of closure of stores in the United States would impact shopping malls in the country and would result in hundreds of storefronts being left potentially empty. 
50 stores would be shut by it in 2019, announced luxury retailer Victoria's Secret just this week, in contrast to the company being in the habit of shutting down a dozen of its stores every year. On the other hand, Gap also announced earlier the closure of 230 of its namesake brand's stores during the next two years in the US. 18 department stores and nine of its furniture and home locations would also be shut down by J.C. Penney in 2019, the company has announced.
Those closure announcements only piled up a host of recent announcements of store closure by the likes of Gymboree, Payless ShoeSource, Charlotte Russe and Ann Taylor parent company Ascena Retail, among a number of others. Coresight Research said in a research note on Friday that in just the first two months of the year, US based and foreign retailers have announced the closure of a total of 4,309 stores across the US. The market research firm said that this number was much more compared to what the firm has managed ot track at the same time a year ago.
In the latest announcement in this regards, closure of most of its showrooms in the US and elsewhere was announced by the US electric car maker Tesla as it plans to shift most of its sales to its online platform across the world. 
"If anything, this increases my concerns for the malls," Jan Kniffen, CEO of consulting firm J. Rogers Kniffen Worldwide, said in a television interview.
He said that out of the total number of about 1200 malls that run all across the United States, only about 250 of them are actually performing well and are not in financial trouble at the current moment. "I think we see more store closures in 2019 than in 2018 ... This year is already ahead of last year", he said.
The market research company had identified closure announcements of 5524 retail physical stores all across the US in the entire year 2018 which was 30 per cent lower than the number of closure announcements a year before when there were 8139 such announcements made in 2017.