Source: The Motley Fool 3.16.19 By Adam Levine-Weinberg
U.S. retailers have already announced about 5,000 store closures since the beginning of 2019, but the amount of space that is opening up is quite manageable.
It’s only mid-March, and U.S. retailers have already announced close to 5,000 store closures since the beginning of the year. That compares to 5,524 during all of 2018, according to Coresight Research.
This data point may make it seem like the retail apocalypse has taken a dramatic turn for the worse in 2019. That said, store closure announcements tend to be clustered near the beginning of the year, as retailers assess their position following the busy holiday shopping season.
Moreover, the total number of store closures is not necessarily the best metric for tracking the impact of the retail apocalypse on malls and shopping centers across the country. In fact, the pace of store closures in 2019 is very manageable compared to the demand for new space.
Not all store closures are created equal
In 2017 and 2018, the retail sector was rocked by a huge wave of department store closures. Macy’s and J.C. Penney (NYSE:JCP) closed more than 200 stores combined — accounting for more than 20 million square feet of space — as they tried to shore up their profitability. Bon-Ton Stores, which had 262 stores totaling 24 million square feet as of early 2017, went out of business in 2018, closing all of its stores.
Most notably, Sears Holdings shrank dramatically. In early 2017, the company had more than 1,400 Kmart and full-line Sears stores in the U.S. (including Puerto Rico). The small fragment of the company that survived a late-2018 bankruptcy filing will operate about 425 stores going forward. The roughly 1,000 stores that got the axe accounted for well over 100 million square feet of space.
By contrast, the vast majority of the stores closing in 2019 are “in-line” retailers that operate much smaller stores. Read the full article at https://www.fool.com/investing/2019/03/16/the-retail-apocalypse-is-not-as-bad-as-it-seems.aspx
Comments by RG: Finally some positive news about the retail market and how other companies do have a good use for empty spaces. News store openings by others and new, non-traditional, creative use of the retail spaces will help lessen the impact.