After an excursion to observe how the Retail Apocalypse is hurting chain restaurants like Ruby Tuesday, it's time to return to retail chains and their stores. CBS News reported last week Retailers expected to shutter 12,000 stores this year.
Low-price shoe company Payless alone is responsible for about one-third of the store closings expected this year.Of all the chains listed, I've already covered Payless ShoeSource, Gymboree, Charlotte Russe, Family Dollar, Dressbarn, and Shopko. The largest chain in terms of closings I haven't even mentioned yet is Fred's, which the video reports as announcing the closing of 313 stores. That happened in three waves. Twin States News in Alabama and Mississippi reported in April Fred's Closing 159 Stores during the first wave.
The next month, Local 24 in Memphis reported on the second wave that Fred's closing more stores, closing 104 more stores for a total of 263.
If everything went according to plan, all these stores have already closed.
This month, WLBT reported on the third wave of Fred's stores closing.
I was looking for 50 stores but found 49. The math isn't perfect but it's close enough.
I plan on looking at the rest of the chains mentioned later this year, particularly GNC and Kay's Jewelers, both of which are probably victims of decreased foot traffic at their mall locations. In the meantime, I'm leaving my readers with the following statistics from Business Insider, which forecast earlier this month Here's how many stores need to close across the US before the retail apocalypse ends, according to analysts by 2026.
- Clothing: 20,700 stores
- Consumer electronics: 9,800 stores
- Home furnishings: 8,400 stores
- Grocery: 7,310 stores*
- Sporting goods: 5,900 stores
- Office supplies: 1,930 stores
- Home improvement: 620 stores
- Auto parts: 60 stores
*Remember that the conversation that led to Brick Immortar's video about Ruby Tuesday started off as a tangent from Erik of Retail Archaeology's observation about grocery store closings. Looks like Erik is right about the sector.
I'll cop to not having read every word of your Retail Apocalypse posts. So I don't know if you've mentioned this name: Ascena. It's a holding company that has financial control over a LOT of stores, especially in apparel. More than 3,500, according to the linkified posting. Dress Barn, which I recall that you have written about, is part of Ascena's stable. And Ascena might be going bankrupt.
ReplyDeleteI had never heard the word "Ascena" myself until tripping across this link. Wolf Street is not an econoblog I read regularly the way I do Naked Capitalism. But it strikes me as a legitimate news source, admittedly on the right-wing side of the political spectrum, but not blindly so. And Wolf Richter has good fax 'n figs. He's one of those guys who knows how to read a balance sheet and then write about it. There is SO much good information out there for us observers, if one knows where to look.
What this Wolf Street post taught me is how chains of stores don't stand on their own. They're often owned by bigger corpo-fish that span LOTS of retail names. And when one of those corpfish gets beached, it leaves multiple well-known mall names flopping.
There's also an element I learned via the link about how corpos are scamming and stabbing other corpos. I get the impression Ascena is doing a "strategic bankruptcy" to shuck & jive out of some of its debts to the greedy vulture hedge funds that loaned money to Ascena. Pay 50⍧ on the dollar that you owe to the hedgie bastards. Simultaneously screw the malls where Ascena has leases, to get better terms or avoid paying the full number of months Ascena had contracted to rent for. It's like a corporetail version of "Reservoir Dogs" where various bad guys killed each other.
I'd say "let the holding companies and hedge funds slit each others' throats, and may they all die together." However, the actors who will be hurt most won't be some rich speculators who see their wealth go from $100 million to maybe $25 mill if stuff gets really shitty. The worst sufferers will be the workers who stock the shelves and run the registers, who see their paycheques go from barely-enough-to-survive to "I have no income at all and I'm going to starve to death in a drainage ditch." When The Collapse comes, average folks won't be storming the Bastille -- they'll be burning down the malls.
Oh, I mentioned Ascena in Business Insider on stores closing in the Retail Apocalypse and Dressbarn closing all 650 stores, a tale of the Retail Apocalypse. What you wrote looks a lot like what happened to KB Toys, Toys R Us, and Sears Holdings. Also, thanks for linking to Wolf Street. I'll be sure to check it out.
DeleteAs for burning the malls, maybe. I don't know what good burning a dead mall would do, unless they burn a thriving high-end one like the one I wrote about in <a href="http://crazyeddiethemotie.blogspot.com/2017/11/a-snail-story-for-black-fridaybuy.html>A snail story for Black Friday</a>. I hope not!
If you listened to undergroundish music in the late 1980s, you're probably acquainted with Skid Roper and Mojo Nixon. Their "Burn Down the Malls" ditty is often on my mind.If Weird Al Yankovic and Jello Biafra formed a supergroup... This tune also ties in to your post about raising the drinking age to 21 in the United Spirits.
DeleteI'd heard of Mojo Nixon, but I had to click on the link and listen to the video to remember that I'd probably heard it before. While the first half is a call to "burn down the malls," the second half of the song is indeed about the 21-year-old drinking age. Thanks for reminding me of it. BTW, the first video suggested is Mojo Nixon's "I Hate Banks." No doubt about his opinion of capitalism!
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