Date: Friday, March 8th, 2019
Source: Sourcing Journal
Retail is continuing its cut back.
The tally for store closures is now up to more than 4,800 doors since the beginning of the year, comprised of over 1,800 doors in January and now at least 4,802 doors in February.
The total in just the first two months of the year could make 2019 rival 2017 as the year of the retail apocalypse. And the count certainly hasn’t ended yet.
Foot Locker on Friday began the tally count for March when it would be shuttering 165 stores. With more retailers and fashion brands set to announce their quarterly earnings results over the next few weeks, the total count will likely creep even higher—and that’s just for Q1. There are three more quarters for earnings season, and depending on how the economy shapes up for the rest of the year, the rate of closures may not slow.
Here are the companies that announced store closures in February.
Stores cut: Another 50 stores on top of the 150 doors expected to close.
Backstory: The retailer filed for Chapter 11 bankruptcy court protection and initially thought it would close just 38 doors. But that tally rose to a projection of 150 doors, and then closer to over 200. The exact number hasn’t yet been finalized. The company filed for bankruptcy court protection on Jan. 16 and plans to restructure its operations.
Stores cut: About 2,500 doors.
Backstory: Most of the store closures announced in February can be attributed to Payless, which said it would liquidate operations. The company filed a Chapter 11 petition on Feb. 18 so it can conduct an orderly winding down of operations. It was initially thought that about 2,100 doors were in operation across the U.S. and Puerto Rico, but that number is closer to 2,500. The international doors and franchised operations are not impacted by the liquidation and will remain in business.
Hudson’s Bay Co.
Stores cut: Up to 20 Saks Off Fifth stores, and a complete shutdown of its Home Outfitters operation.
Backstory: The retailer has been overhauling its operations in a bid to improve profitability, one that included the closure of several Lord & Taylor stores, including the flagship location on Fifth Ave. in Manhattan when it sold the building to WeWorks. The closure of up to 20 Saks Off Fifth sites will allow the company to focus on its best locations. It also shut down the Home Outfitters business in Canada.
E.L.F. Beauty Inc.
Stores cut: 22 stores.
Backstory: The fashion and apparel sector isn’t the only one closing stores. E.L.F. said it plans to close 22 stores and focus on its online business and wholesale distribution after a fourth-quarter sales miss. But it’s also not the only beauty firm shuttering stores. Beauty Brands in January filed for Chapter 11 bankruptcy court protection and then said it would close all 58 locations. That shows that the consumer preference for shopping online isn’t just limited to retailers in the apparel sector. Beauty companies may have been the darling of the mergers and acquisitions world over the last several years, but it too shares in the same suffering of retail pain as its apparel cousins.’
L Brands Inc.
Stores cut: 53 stores at its Victoria’s Secret operation.
Backstory: The company’s Victoria’s Secret business has been in trouble for some time now. L Brands, the parent company of Victoria’s Secret, Pink and Bath & Body Works, posted a miss on Wall Street’s estimates on the fourth-quarter sales. What else is there to say?
J.C. Penney Co. Inc.
Stores cut: 18 stores at the core J.C. Penney nameplate, including the three identified in January, plus nine ancillary home and furniture stores.
Backstory: New chief executive officer Jill Soltau is putting her imprint on the turnaround needed at the mass merchandiser, including a move away from appliances and most of the furniture distribution to focus back on apparel offerings. Apparel as a category also has higher margins. The caveat is making sure the right fashion mix is in the stores, season after season after season.
Stores cut: 230 Gap nameplate doors.
Backstory: The company, which is spinning off its Old Navy business, is hoping the spinoff and store closing at core Gap doors will help that part of the business be more profitable.
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