More retailers closing but small sites are easier to fill
CHICAGO — The number of store closures announced in the first half of 2019 has outstripped the number retailers announced in all of 2018.
More than two dozen chains, from Payless ShoeSource to Party City, have said they plan to shutter about 7,100 stores, up from about 5,400 throughout all of 2018, according to commercial real estate information firm CoStar Group.
Many of the locations retailers announced plans to close this year are smaller, easier-to-fill shops than the department stores and big-box chains that closed in prior years, said Drew Myers, senior consultant at CoStar.
And even though retailers announced plans to close more stores during the first half of this year, CoStar estimates they left less vacant retail space than they did during the first half of 2018 — an estimated 72 million square feet this year versus 110 million last year.
That matters because smaller stores usually are easier to replace. There are a lot more companies interested in moving into boutiques than multistory department stores, Myers said.
Another relative bright spot: Other than a handful of chains suich as Payless, Gymboree and Dressbarn, many of the retailers closing stores this year only are shuttering a fraction of their stores, said Ryan Mulcunry, executive vice president with Great American Group, a company that helps retailers liquidate closing stores.
In prior years, retailers announcing widespread store closures tended to be those that “didn’t have a reason to exist,” Mulcunry said. Those companies are gone, and many of the retailers closing stores are trying to adapt and strengthen the stores that remain, he said.
Some are also offsetting at least some closures with new openings. CoStar estimates retailers have announced new stores totaling 38 million square feet in the first half of 2019, compared with 43 million throughout 2018.
“It’s not Armageddon or the apocalypse,” Mulcunry said.
Here’s a rundown of retailers that have said they plan to close stores this year:
Apparel, department stores
A handful of apparel chains closed their U.S. stores entirely. All of the roughly 2,100 North American Payless shoe stores closed by late June, and all 798 Gymboree and Crazy 8 kids’ clothing stores in North America have closed. U.K.-based Topshop closed all 11 U.S. stores, and Dressbarn said in May it would shut all of its roughly 650 stores.
Accessories and clothing chain Charming Charlie is the latest to join. Closing sales began at all 261 stores, after the company filed for bankruptcy protection for the second time in less than two years this month.
Some retailers only cut certain stores, such as J.C. Penney, which said it would close 18 department stores and nine home and furniture stores in 2019. Saks Off Fifth expects to close 15 stores by the end of the year and Chico’s FAS plans to close about 100 Chico’s, 90 White House Black Market and 60 Soma locations over the next three years. About 60 to 80 are expected to close in fiscal 2019.
Other apparel retailers said they’ll offset at least some closures with new stores, including Victoria’s Secret, which expects to close 53 stores this year while opening two Victoria’s Secret and 3 Pink stores. Gap is closing 230 by the end of 2020 but opening some stores under other brands, including about five new Old Navy and Athleta stores opening in Illinois in the fall.
Abercrombie & Fitch plans to close up to 40 stores but also open 40 across its Abercrombie & Fitch, abercrombie kids and Hollister brands. Foot Locker said it would close 165 and open 80 during the 2019 fiscal year, Francesca’s is closing at least 30 but opening four, and J. Crew said it would close 20 but open one J. Crew and 10 under Madewellt.
Specialty retailers
Big-box retailers Party City and Bed Bath & Beyond expect to close 45 and 40 stores in 2019, respectively. Bed Bath & Beyond warned it might add to the list of closing stores, but also plans to open 15 stores.
Signet Jewelers is closing 150 of its more than 3,300 stores, with “limited” new openings. Pier 1 plans to close 57 during the 2020 fiscal year and Build-A-Bear Workshop plans to close up to 30 stores in the next two years, about half of which will be in North America.
Bath & Body Works and jewelry retailer Pandora said they expect to open enough new stores to more than offset planned closures.
General retailers
Bankrupt Green Bay, Wis.based chain Shopko decided to close all remaining stores and wind down its business.
Discount retailer Fred’s has closed or is planning to close 422 stores, more than three of four stores it had in February, according to a firm that said it had been hired to conduct closing sales.
Others are only closing a fraction of stores, including CVS, which expects to close 46 pharmacy stores during the second quarter of 2019, and Family Dollar. Parent company Dollar Tree said it will close up to 390 Family Dollars during the 2019 fiscal year, but it’s also remodeling at least 1,000 and converting 200 to the Dollar Tree brand.