The Retail Apocalypse Is Officially Descending Upon America



The retail apocalypse has officially descended on America

metro north mall seph lawless

Thousands of mall-based stores are shutting down in what's fast becoming one of the biggest waves of retail closures in decades.

More than 3,500 stores are expected to close in the next couple of months.

Department stores like JCPenney, Macy's, Sears, and Kmart are among the companies shutting down stores, along with middle-of-the-mall chains like Crocs, BCBG, Abercrombie &Fitch,andGuess.

Someretailersareexitingthebrick-and-mortarbusinessaltogetherandtryingtoshifttoanall-onlinemodel.

Forexample,Bebeisclosingallitsstores—about170—tofocusonincreasingitsonlinesales,accordingtoaBloombergreport.TheLimitedalsorecentlyshutdownall250ofitsstores,butitstillsellsmerchandiseonline.

Others,suchasSearsandJCPenney,areaggressivelyparingdowntheirstorecountstounloadunprofitablelocationsandtrytostaunchlosses.

MikeNudelman

Searsisshuttingdownabout10%ofitsSearsandKmartlocations,or150stores,andJCPenneyisshuttingdownabout14%ofitslocations,or138stores.

Accordingtomanyanalysts,theretailapocalypsehasbeenalongtimecomingintheUS,wherestorespercapitafaroutnumberthatofanyothercountry.

TheUShas23.5squarefeetofretailspaceperperson,comparedwith16.4squarefeetinCanadaand11.1squarefeetinAustralia,thenexttwocountrieswiththemostretailspacepercapita,accordingtoaMorningstarreportfromOctober.

Visitstoshoppingmallshavebeendecliningforyearswiththeriseofe-commerceandtitanicshiftsinhowshoppersspendtheirmoney.Visitsdeclinedby50%between2010and2013,accordingtothereal-estateresearchfirmCushman&Wakefield.

ASearsstoreintheWoodbridgeCenter.BusinessInsider/SarahJacobs

Andpeoplearenowdevotingbiggersharesoftheirwalletstorestaurants,travel,andtechnologythaneverbefore,whilespendinglessonapparelandaccessories.

Asstoresclose,manyshoppingmallswillbeforcedtoshutdownaswell.

WhenananchorstorelikeSearsorMacy'scloses,itoftentriggersadownwardspiralinperformanceforshoppingmalls.

Notonlydothemallslosetheincomeandshoppertrafficfromthatstore'sbusiness,buttheclosureoftentriggers"co-tenancyclauses"thatallowtheothermalltenantstoterminatetheirleasesorrenegotiatetheterms,typicallywithaperiodoflowerrents,untilanotherretailermovesintotheanchorspace.

GettyImages

Toreducelosses,mallsmustquicklyfindareplacementtenantforthemassiveretailspacethattheanchorstoreoccupied,whichisdifficult—especiallyinmallsthatarealreadyfinanciallystrapped—whenmajordepartmentstoresarereducingtheirretailfootprints.

Thatcanhavegraveconsequencesforshoppingmalls,especiallyinmarketswhereit'shardertotransformvacantmallspaceintonon-retailspacelikeapartments,accordingtoanalysts.

Thenation'sworst-performingmalls—thoseclassifiedintheindustryasC-andD-rated— will be hit the hardest by the store closures.

The real-estate research firm Green Street Advisors estimates that about 30% of all malls fall under those classifications.






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Date: 11.12.2018, 14:27 / Views: 52435