On today’s show we’re running what seems like an almost annual episode. The pain in retail real estate continues with little signs of slowing down.
According to a new report in Business Insider this week,
Retailers closed a record 102 million square feet of store space in 2017, then smashed that record in 2018 by closing another 155 million square feet, according to estimates from the folks at CoStar.
We can expect similar numbers in 2019, with more than 9,000 stores expected to close this year. Some of these announcements are from earlier this year, but several are as recent as this past week.
Back in February, Payless shoes abruptly announced it was closing all 2,500 of its stores in what may be the largest inventory liquidation in retail history.
Gymboree filed for bankruptcy protection for the second time. The first time was back in 2017 when they closed about 400 stores. This time, they’re closing all 805 outlets, never to return. The company’s remaining 140 stores under the Janie and Jack brand.
Dress Barn is closing 650 stores after 50 years of operation.
Discount Chain Freds announced that it was also closing 520 stores.
Dollar Tree plans to convert 200 Family Dollar stores into Dollar Tree stores and close another 390 Family Dollar stores.
The Gap announced the closure of 230 stores and announced intention to sell its Old Navy stores.
Womens clothing retailer Avenue is closing all 222 of its stores.
Walgreens continues to rationalize after its acquisition of Rite Aid. Following the acquisition, they announced the closure of about 600 pharmacies. This year they announced the closure of 200 Walgreens locations.
Forever 21 is closing 350 stores globally and about 178 locations are in the US.
Sears department stores have been the walking dead for years now. They announced the closure of another 175 stores in a series of announcements that have trickled out over the past three months.
Lifeway is closing 170 stores.
Kmart is closing 160 stores.
Performance Bicycle filed for bankruptcy protection this month and is closing all 102 stores. Bike shops around North America have been struggling. Cyclists would go to a local performance bike shop, try out a bike, get a feel for exactly what they want and then find the same product, or the brand name components to assemble a performance bike online for less and order it online. This story is playing out over and over and over again.
Olympia Sports was purchased earlier this year by Jack Rabbit. Following the acquisition, they announced the closure of 76 stores.
CVS Health is closing 68 stores.
Bed Bath and Beyond is closing 60 stores.
Pier 1 Imports is closing 57 stores.
Party City is closing 55 stores.
Agaci is closing all of its 54 stores.
Victoria’s Secret is closing 53 stores.
JC Penney is closing 27 Stores.
Womens retailer Christopher & Banks is closing 40 stores over the next two years.
Lowes is closing 20 stores and even retail giant Walmart is closing 17 stores.
Macy’s is closing 9 stores.
There are more retail closures that I could tell you about. I don’t know about you, but after listening to that partial list, I’m pretty numb already.
I firmly believe that the strategy for dying shopping malls is the redevelopment of mixed use planned communities that have a combination of residential, parks, amenities, and a modest amount of neighborhood retail including groceries, and food and beverage.
These distressed assets will increasingly appear on the market in the coming year and years to come.