Store Closures is the New Normal
Michael Spencer
A.I. Writer, researcher and curator - full-time Newsletter publication manager.
With the recent news that Macy's plans to close 100 stores, Retail is definately changing fast. Wal-Mart and Sears seem as well seem particularly hard hit in this continuing trend.
What's 100 stores to the country's largest departement store chain you may ask? It's more than 10% of all of their locations. You can't reverse omnichannel trends and consumer changes in patterns of spending, you can't adapt fast enough to compete with Amazon.
Macy already closed 41 stores in its previous fiscal year, and this is a trend we are seeing across the board. Wal-Mart's recent acquisition of Jet for $3.3 Billion can only be seen as truly an act of desperation,
An isolated trend? Not so much.
Store Closures Include
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Macy's to close 100 stores
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Ben Moss closing all stores
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Coach closing 250 department store locations
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Sports Authority accelerates closings
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Ralph Lauren to close stores, cut jobs
Here are 12 more Major retail stores closing stores like crazy.
Macy’s currently operates 728 stores, including 675 full-line locations. Staff will be offered positions at nearby locations where possible. But 100 stores is a lot of retail jobs.
Online and Discount Stores Permanent Change?
Macy's decline is just a symptom of the times, some call it an era of retail disruption. Sales have fallen 3.9 percent to $5.8 billion. It's notable that the 2008 economic recovery has been largely bypassed by the nation's department strores such as Macy's, Kohl's, J.C. Penney and Nordstrom all struggling to adapt to the new consumer and shopping patterns.
- Slashing prices and ever-present discounting to compete ultimately hurt departement stores.
- Omnichannel adaptation was slow vs. online retailers meaning many stores are continuously playing catchup to younger and more innovative brands.
Future of Retail Jobs
According to the NRF Retail supports about 1 in 4 jobs in America or around 42 million jobs. With store closures combined with rising automation, it's likely this is not the most stable industry to work in these days.
What do you think this means for the future of the departement store, retail jobs and how retail is evolving?
Executive coaching, Executive search
8 年While I appreciate the article, it’s no news. Retail has been over built for years. I remember walking into Sherman Oaks Mall in the late 90’s or San Mateo's Fashion Island in 1996. Dead malls, I knew then it was the beginning of the end for the Mall era. There were approximately 1,000 to 1,100 enclosed malls in the United States as of 2014; this number represents only a fraction of the 47,000 shopping centers of all types located in the country. The best retailers have known you don’t need 500 locations to be successful. What you do need if you have brick and mortar is the correct Omni channel formula. Most all the stores listed in the articles, have overbuild, paid too much for the real estate portfolio and have mismanaged the overall P & L budgets. Amazon and the internet of things has and will continue to change the way we shop. However in our high touch, high Tech world. People yearn for the live customer experience. Take one of many examples, Soft Soundings, 21 States, 44 locations, web, catalogue and they provide outstanding customer service.
President at RiverdaleMac
8 年Another source of higher overhead ate financial charges...the so-called "reward cards." Here is a system of regressive taxation. Big spenders get big rewards. Small spenders get higher prices at the checkout.
President at RiverdaleMac
8 年Municipalities should also look at commercial tax regimes if they want to hit back at online competition. They incidentally discriminate against their own storefronts while letting online retailers off the hook. For example, who puts more wheels on our roads, the local computer store or amazon? The local computer store or a big box in the suburbs? Here's another scenario: the local ice cream store pays hefty commercial property taxes for having a storefront. It hires 4 high school students. Independent consultants, who hire no high school students, pay subsidized lower residential taxes by operating out if their homes. Many big businesses have figured out that it's way cheaper to let people work out of their homes as contractors than having to manage office space downtown. Even -- or maybe I should day "especially" -- governments.
Freelance Copywriter/Marketing Strategist
8 年Shouldn't have dropped the Trump ties.