I am betting that there are some agile, small retailers out there that are going to reinvent bricks-and-mortar retailing for a new generation and a new century.
The implosion in bricks and mortar retailing continues with Coresight Research upping its store closure forecasts from 15,000 to 25,000. 60% of the closings will take place in malls.
Who are the stores that are closing? According to Washington Post writer, Rachel Siegel’s article, “Hard-hit retailers projected to shutter as many as 25,000 stores this year, mostly in malls,” most of them are well-known brands. The list includes “J. Crew, Neiman Marcus, J.C. Penney, Tuesday Morning, …Palais Royal, Bealls and Goody’s locations.” Other chains cited include Brooks Brothers, Men’s Wearhouse, Jos. A. Banks, GNC, Pier 1, Tuesday Morning, and Victoria’s Secret.
Bricks and Mortar problems are not new. According to the article, 9800 stores closed last year. What is new is the impact of forced store closures due to Coronavirus and the savage impact it has had on already struggling stores.
The closings seem weighted towards department stores (a retail concept past its freshness date) and ready-to-wear. The underlying problem, however, appears to be retail operations that are heavily leveraged with so much debt that they are caving in.
Caitlin Cochran wrote a piece in January (a month that now feels like a century ago), with the title: “These Retailers Could Be the Next to Go Bust.” The piece listed retailers with heavy debt loads. Among the retailers she listed were Build A Bear, .J.C Penney, Rite Aid, Bluestem Brands, For Your Entertainment, Sears, and Overstock.
What the toy industry experienced with debt-laden Toys R Us is now occurring
in numerous retail chains. When the worst is over from the Coronavirus, we may
well see a retail world initially dominated by Wal-Mart, Target, Dollar General, Family
Dollar, Dollar Tree, Five Below, and, of course, Amazon.
I am betting, however, that there are some agile, small retailers out there that are going to reinvent bricks-and-mortar retailing for a new generation and a new century. The best may well be yet to come.