Sell for More Trivia is a weekly blog series that playfully presents a trivia question about commercial real estate.
Despite healthy consumers and a strong economy, more than 9,300 stores closed in 2019. That’s a
whopping 59% jump from 2018! And the highest number since Coresight Research began tracking the data in 2012.
Who is closing stores?
Payless, Gymboree, Charlotte Russe and Shopko all filed for bankruptcy and closed a combined 3,720 stores.
Discount chain Fred’s filed for bankruptcy and closed 564 stores.
Ann Taylor parent company Ascena Retail, GNC, Walgreens, Victoria’s Secret and JCPenney slashed their store footprints to save money and prop up higher-performing stores.
Family Dollar closed 359 this year, while Signet, the parent company of Kay, Jared and Zales, announced 159 closures.
On the positive side
Retailers announced 4,392 store openings in 2019.
The discount sector in particular is growing. Dollar General announced it opened 975 stores, a similar number to previous years.
Discount chains like Ollie’s Bargain Outlet and Five Below expanded. Discount grocer Aldi opened hundreds of stores in the US to reach customers who want to shop for cheap groceries. TJX continued its rapid growth, opening nearly 200 stores.
Online brands will open stores, food and beverage concepts are growing, gyms and fitness concepts are spreading, and pop-up stores continue to be a popular tool for many retailers.
Thousands more store closings could be on the way in the coming years as online shopping continues to replace purchases at physical stores. High debt levels have also burdened traditional retailers.
Online sales make up around 16% of retail sales today…but they will rise to 25% by 2026, UBS analysts estimated.
That could force up to 75,000 mores stores to close by 2026.
That estimate includes 20,000 clothing stores, 10,000 consumer electronics stores and thousands of home furnishings and sporting goods stores.
We expect store closings to outplace openings in 2020 as retailers continue to “right size” their footprints.
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About Beau Beach, MBA CCIM
Beau is a tenacious Commercial Real Estate Broker, author and adoring father of four. His clients appreciate his no-nonsense demeanor and his legendary work ethic.
Beau leads Beachwood which is a commercial real estate broker for sellers in the Nashville, Milwaukee and South Florida markets.
He’s the author of the books The 3 Reasons: Why Most Commercial Properties Don’t Sell and True Wealth: What Every Seller Should Know About 1031 Exchanges.
Beau can be reached at 800-721-3287, click to schedule a call or Beau@BeachwoodSells.com