US retailers are not having a good time at the moment.
Credit Suisse released a report this month which said around 8,600 brick-and-mortar stores will close their doors this year. This is over 2,000 more than the worst year on record when 6,163 stores closed during the recession in 2008
Already in the first three months of this year, the retail industry lost around 60,000 jobs. If Credit Suisse is correct, more jobs will be lost and the US will lose more than 147m square feet of retail space.
Here are 10 major retailers that are closing stores this year
1. Abercrombie & Fitch
Once the beloved choice of preppy teenagers worldwide, Abercombie & Fitch has had a rough few years of falling sales and controversial comments from its, now ex, chief executive on how he only wants “thin and beautiful” people shopping in his stores.
This year, the brand will close 60 stores in the US to prevent it from collapsing, after sales fell 13 percent over the holiday season. This will bring the total number of stores from 839 five years ago to 670 now.
2. American Apparel
American Apparel shut all its UK outlets during last year and announced it was officially shutting down in the US earlier this year. After its heyday in the early 2000s, it suffered extremely bad PR after its founder Dov Charney was forced out of the company amid sexual harassment allegations.
As well as closing all 110 US stores, the company is also closing its L.A headquarters and factories, meaning over 3,500 workers were out of a job.
Women’s clothing store, Bebe, announced last week that it would close all 168 of its stores in the US and Canada. This wasn’t that much of a surprise though; earlier this month the company said it wanted to close 28 stores because it was struggling, and was trying to figure out what to do with the other 140.
4. BCBG Max Azaria
The BCBG Max Azaria Group filed for bankruptcy protection in March. At the time, Reuters reported it was now attempting to close freestanding stores in Canada, consolidate operations in Europe and Japan and close another 120 retail stores as part of restructuring efforts.
The ugly shoe/clog brand said it would close 158 stores this year, amidst declining wholesale, retail and digital sales.
Crocs president Andrew Rees said:
“Over the past several months, as we continued to focus on removing unnecessary complexity from our business, we conducted a comprehensive review of our cost structure. This led us to identify a series of actions to reduce our SG&A by $75 million to $85 million. The SG&A reductions fall into two main categories: 70 percent will come from planned store closure over the next two years; this will result in a net 25 percent reduction in our store count, bringing it down to approximately 400 stores by the end of 2018 from the 558 at the end of 2016.”
Revenues fell 10 percent for the brand to $187.4m in the fourth quarter of 2016, falling short of Wall Street’s target of $189.4m.
Of the 400 US stores Guess operates, it will close 60 this year in order to improve its operating income by $16m, according to the fashion brand’s chief executive Victor Herrero.
But it won’t stop there. Around 120 more stores could be closed in 2018. Herrero told analysts:
“Half of our stores will have a kick-out close or a lease expiration over the next three years, The process on this rent renegotiation or closing the stores will be basically we’ll approach landlord, we’ll try to renegotiate, and if we are not happy with our rent renegotiation, we will close the store.”
7. JC Penney
JC Penney is one of three US department store brands struggling to keep going in the era of e-commerce. This year it will close nearly 14 percent of its stores, about 138 of 1,000, in order to make up for a decline in sales.
“Our decision to close stores will allow us to raise the overall brand standard of the company and allocate capital more efficiently,” said Penney’s chief executive Marvin Ellison.
Macy’s is the second department store facing store closures. At the beginning of the year, it revealed it was closing 68 stores, whilst 30 others wold be closed in 2018 and beyond. As part of its cost-cutting exercise, it said it will eliminate layers of management, which would reduce its workforce by 6,200, not including the loss of another 3,900 workers displaced by the store closures.
RadioShack filed for bankruptcy for the second time in March this year and announced it would close 552 of its stores, 36 percent of the chain’s properties.
The brand, which sells electronic goods, filed for bankruptcy for the first time in 2015 before it was bought by General Wireless for $160m. However, it failed to turn this around and so more store closures are set to come.
10. Sears and Kmart
Sears has seen its comparable sales slide for the past 11 years, so it is perhaps not so surprising that it is closing stores.
The final department store on the list, Sears’ parent company Sears Holdings has reportedly been in trouble since the 2005 merger which combined Sears and Kmart. In 2006 it had 3,400 US stores and 370 in Canada but by the end of January this year, it only had 1,400 stores, all in the US.
In January, the company announced it would close 109 Kmart stores and 41 Sears stores in order to focus more on its better performing stores.