After a vicious year of bankruptcies, some retailers are still at risk. 13 companies, including Rite Aid, Belk, and Neiman Marcus, could be the next to default.

empty sears store closure retail apocalypse
A worker removes sale banners inside a closed Sears department store one day after it closed in January 2019. REUTERS/Mike Segar

  • Moody’s identified 13 retailers at the highest risk of defaulting or filing for bankruptcy in 2021.
  • Apparel and department store retailers, they said, remain the most at-risk.
  • Men’s Wearhouse, Talbots, Belk, and Party City all made the list.
  • See more stories on Insider’s business page.

Apparel and department stores are the most at risk for defaulting on their loans in 2021, analysts with Moody’s Investors Service said in an April 7 report.

After a brutal year in 2020, in which dozens of retailers filed for bankruptcy, more filings could be coming, but not as many as last year, the analysts said.

Apparel stores accounted for about half of defaults in 2020, and the sector is still “in the eye of the storm,” as it confronts long-term pressures, like declining mall traffic, the analysts said.

Although the 2021 forecast “marks a vast improvement over the prior year, it is still historically high relative to prior recoveries, pointing to significant ongoing risk for an industry not yet out of the woods,” the report said.

Read more: Experts say brick-and-mortar retailers could rebound post-pandemic – but only if they channel the e-commerce boom back to their physical outposts

The analysts identified 13 stores at the highest risk of defaulting, and most of them are apparel stores.

Rite Aid

Rite Aid store in Los Angeles
MIKE BLAKE/Reuters

Rite Aid, the US pharmacy chain with 2,500 stores in 19 states, struggled amid the pandemic as fewer people came down with colds or coughs as they sheltered at home. The company cut its full-year forecast for 2021, and it has $1.5 billion in outstanding debt rated high risk. Moody’s said its competitive disadvantage and near-term maturities are putting it in danger of default.

Party City

Party City
Richard Drew/AP Images

“Debt-strapped” Party City eased its heavy burden last year when it announced a bond restructuring, Moody’s said. While the party retailer is still at risk of default because of ongoing challenges from low demand, the risk isn’t “immediate,” the analysts said.

Talbots

Talbots
Reuters

Women’s clothing store Talbots is among apparel retailers at risk. The company is facing sector challenges, as many consumers have turned away from malls amid the pandemic. Talbots doesn’t have much cash on hand, and it’s debt is coming due soon, analysts said.

Belk

belk
John Greim/Getty Images

Belk, a private apparel retailer with locations in 16 states, already marked the first bankruptcy of 2021. The Charlotte, North Carolina-based department store chain has struggled like other apparel retailers amid the pandemic. Plus, it has a lot of debt and not a lot of cash on hand.

Men’s Wearhouse

men's wearhouse ties.JPG
REUTERS/Mario Anzuoni

Men’s Wearhouse was among the long-struggling companies that defaulted in 2020, along with retailers like J.C. Penney and J. Crew. The formal apparel retailer was hit hard during the pandemic as people stayed at home and opted to wear comfy clothes instead of formal wear. Moody’s said the company’s outlook is currently stable, though it’s still at risk amid continued sector challenges.

Nieman Marcus

neiman marcus
Katie Warren/Business Insider

Neiman Marcus was also among retailers that filed for bankruptcy in 2020, as it was under “inexorable” pressure from the pandemic. The department store chain was “one of the highest-profile companies to succumb to bankruptcy” in 2020, analysts said, but it “emerged from Chapter 11 in September after shedding more than $4 billion of debt.” The company’s debt rating remains below investment-grade, however, keeping it at risk of default.

J. Jill

j. jill store
Jeffrey Greenberg/Education Images/Universal Images Group via Getty Images

J. Jill, owned by Jill Acquisition, restructured its debt in 2020, giving the company “additional time to recover from coronavirus-driven disruption in the apparel retail industry,” Moody’s said at the time. Though the women’s apparel retailer still has risky debt on hand with weak liquidity, Moody’s rated it at stable.

Shoes for Crews

shoe organizers container store
Shoe organizers. The Container Store

Shoes for Crews, owned by SHO Holding, extended the deadline for its debt maturity last year during the pandemic. Still, the maker of slip-resistant, safety footwear for workers is at risk of default, as it faces the continued challenges of the apparel industry and is strapped with debt.

Outerstuff

Bills fans
Buffalo Bills fans in Orchard Park Stadium on January 9, 2021.

Outerstuff, the maker of major league sports apparel for youth, is one of the several retailers facing challenges as an apparel store. The private company is at risk of default as it has an “unsustainable capital structure at current levels of performance, small revenue scale, narrow product concentration primarily in licensed children’s sports apparel in North America with a small, but growing, adult and international presence, and reliance on licensing arrangements from several sports leagues for a significant majority of revenue,” Moody’s said in a March 26 analysis.

Nine West

Nine West
AP

Nine West, owned by Premier Brands Group Holdings, filed for bankruptcy in 2018. It reduced debt and emerged from bankruptcy in 2019 and sold its Anne Klein trademark. Still, the retailer is at risk of default because of a drop in revenue during the pandemic, and “it will take some time for the company to demonstrate a sustainable turnaround in light of the ongoing challenges in key segments of its wholesale customer base and the overall global apparel environment,” Moody’s said in a March 29 note.

Service King

car mechanic, car repair, looking under the hood of a car
Michael Stuparyk/Toronto Star via Getty Images

Midas Intermediate Holdco, which owns Service King, has a lot of debt, and the bill is coming due. The Richardson, Texas-based car repair company has $1.1 billion in debt rated below investment-grade, Moody’s said.

99 Cents Only stores

99 cents only
Facbook/99 Cents Only

Dollar-store chain 99 Cents Only, which has 350 stores in four states, had distressed exchanges in 2017 and 2019. The discount retailer is at risk because of a competitive disadvantage and operational and execution issues, Moody’s said.

Boardriders

surfing
Frank McKenna/Unsplash

Boardriders, the maker of popular surfing, skateboarding, and snowboarding apparel brands like Billabong and Roxy, went bankrupt in 2015, and now it’s at risk of default again as the company faces sector challenges and a lot of debt amid the continued pandemic, Moody’s said. In the future, though, the analysts expect the company will see benefits from its acquisition of Billabong.

Read the original article on Business Insider

The death of the American mall was a warning sign that our dystopian future was closer than we all thought

sears vaccination
A Sears has been turned into a COVID-19 vaccination center, aiming to vaccinate around 700 people a day.

  • Americans getting vaccinated in bankrupt, empty malls paint a grim picture for life after COVID-19.
  • Retail vacancy rates are at a 7-year high after decades of closures due to the rise of e-commerce.
  • Brands are bailing out failing US policies, from healthcare to infrastructure – and it’s only going to get worse.
  • See more stories on Insider’s business page.

As vaccines roll out across American, thousands of people aren’t getting vaccinated at CVS pharmacies or local health clinics. Instead, they’re heading to abandoned Kmarts, Sears, and Toys R Us stores to get their shots.

For American companies that have seen store counts collapse in recent years, the symbolism of having abandoned stores turned into mass vaccination clinics highlights how quickly the world was changing before the pandemic, and how COVID-19 accelerated a shift to an unfamiliar and sometimes dystopian future.

The end of the COVID-19 pandemic might be in sight as vaccine shots ramp up, but crumbling malls, the country’s haphazard approach to healthcare, and brands looking to capitalize on the “new normal” suggest our new dystopian reality is here to stay.

sears vaccine
The Townsquare Mall in Rockaway, New Jersey turned a former Sears into a vaccine “mega” site.

American malls are dying a slow and painful death

The last decade has seen American cultural touchstones disintegrate as part of the retail apocalypse.

Companies like Sears and JCPenney spent over 100 years building their brands into household names – but it took only 10 years for an apocalypse to sweep through the retail industry, leaving vacant stores and dead malls in its wake.

The demise, like so much in the last decade, can be linked to the financial crisis: After the housing bubble burst in the late aughts, many retailers were never quite able to get back on their feet. Hundreds of thousands of employees were out of work, and private equity stepped in, burdening mall brands with massive amounts of debt.

Read more: Taco Bell is adding 1,000 drive-thru ‘bellhops’ as chain tweaks traditional and Cantina stores for a post pandemic world

The American mall began to face “a death spiral,” John M. Clapp, a professor at the University of Connecticut’s Center for Real Estate, told Insider in 2017.

“Once a department store goes vacant that tends to be contagious because all those middle-mall stores – the nail salons and the jewelry stores – they are all depending on the traffic coming from the bigger retail stores,” he said.

A report from Coresight Research cited by CNBC last August estimated that out of roughly 1,000 American malls, a quarter will close down in the next three to five years.

And, of course, it’s impossible to ignore the Amazon effect: The Seattle bookseller sparked an e-commerce boom, leading to a race to the top for Amazon and its main competition, Walmart, and opening the direct-to-consumer floodgates. Companies like Glossier, Allbirds, and Casper led the way, eschewing a traditional retail experience in favor of online-only shopping. (Of course, all of those brands eventually opened retail experiences of their own.)

In what is perhaps the cruelest twist of irony, Amazon reportedly held talks with Simon Property Group, the biggest mall-owner in the US, to discuss converting empty retail space into fulfillment centers that pack and ship Amazon orders.

The pandemic has only made matters worse. Retail vacancy rates are nearing a seven-year high, after major chains announced closures of more than 12,000 stores in 2020. Moody’s Analytics projects that roughly 135 million square feet of vacant space may become available in regional malls nationwide within the next five years. These vacancies have left malls abandoned, and they readily turned into vaccination sites.

Many laid off retail workers have either pivoted to discount chains that pay employees significantly less, or Amazon itself. And though Amazon pays workers $15 an hour, warehouse jobs are more physically demanding and delivery drivers said they’ve dehydrated themselves to get through a shift without bathroom breaks.

In lieu of an adequate government safety net to ensure Americans get fair pay and health care even as businesses shutter, brands are – unfortunately – left to pick up the pieces.

COVID Vaccine Line
People wait in line in a Disneyland parking lot to receive COVID-19 vaccines.

Things are only going to get weirder

The complete disruption of the pandemic puts Americans in a position where the “new normal” is a flexible term. As seen by the transformation of malls into vaccination sites, something that would seem straight out of “28 Days Later” in 2019 can be completely acceptable in 2021.

The factors that allowed for this cobbled together solution – a broken retail system saving a healthcare system stretched to the breaking point – are not going away.

The inclination to turn to companies to fix broken infrastructure can run the gambit from creative at best to disturbing at worst. For example:

And as state governments work to vaccinate their citizens as quickly and efficiently as possible, they’ve turned to other capitalist symbols of the before-times to help carry out their plans.

Beginning in January, lines snaked around the parking lot at Disneyland, but not to visit Thunder Mountain or the Haunted Mansion – the theme park, shuttered since March 2020, became a “super” vaccination site where hundreds of thousands of doses have been administered.

Read more: We just got the best look yet at the consumer genetics market ahead of 23andMe’s public debut. Here are the 5 biggest obstacles the $3.6 billion company will have to overcome.

Major league sports stadiums, many of which sat empty and dark for most of last year, have also become mass vaccination sites. Where fans would have once lined up to get let into a football or baseball game, they’re now lining up to get a COVID shot.

Brands have been bailing out the US health system throughout the pandemic. Coors beer breweries transformed into hand sanitizer manufacturers. Volkswagen made hospital equipment after the country’s gown and mask shortage got so bad nurses resorted to wearing trash bags.

This kind of corporate contingency plan shows no sign of stopping after the pandemic subsides – in fact, it may even be coming for schools next. A mall in Vermont became a safe-haven for a high school after the school, just before it was set to reopen for in-person learning, was found to have elevated levels of toxic chemicals known to cause cancer.

AP21084746481358 (1)
Downtown Burlington High School.

There may, however, be a more nefarious side to some companies lending a hand, even during the COVID-19 pandemic. CVS and Walgreens – which have collectively given nearly 20 million shots so far – are reportedly looking to cash in on data collected from people they administer vaccines to. And drug companies that made the COVID-19 vaccines won’t give up their patents to help vaccinate the rest of the world.

These self-serving tactics should be taken as a warning sign as the US increasingly relies on brands to build a post-pandemic future. In some cases, companies have unique insight into problems – such as a Chick-fil-A manager helping with a vaccine drive-thru. But, relying too fully on corporations whose ultimate focus is their bottom line is not just dystopian, it’s dangerous.

The pandemic has shown just how quickly things can change. As the country rebuilds, it needs to be on solid ground, instead of relying on the magnanimity of brands.

Read the original article on Business Insider

See inside a defunct Macy’s that underwent a $3.5 million transformation to become a high school in Vermont

AP21084746326654
Downtown Burlington High School is located in a defunct Macy’s store.

  • A high school in Burlington, Vermont moved into a defunct Macy’s store.
  • The school district spent $3.5 million renovating the department store into classrooms.
  • Some abandoned malls across the US are being repurposed for other uses.
  • See more stories on Insider’s business page.
High school students in Burlington, Vermont are now attending school in what was once a Macy’s department store in a local mall, Lisa Rathke reported for the Associated Press.

AP21084746357769
Downtown Burlington High School.

Students at the school spent the previous six months learning remotely after toxic chemicals that can have dangerous health effects, called PCBs, were found in the school building. 

The district signed a six-month lease on the former Macy’s location, spending $3.5 million to renovate the 150,000 square foot space so it would be useable as a school, Seven Days Vermont reported.

AP21084746389155
Downtown Burlington High School.

Macy’s closed the location in 2018, but it’s still set up like a standard department store. Dividers separate the huge space into dozens of classrooms, plus a cafeteria, library, and physical education room.

Read more: 9 retail brands that are prime M&A targets in 2021, according to experts

The escalators are one of the features that make Downtown Burlington High School different from others. Students told the AP that escalators and elevators are “nice features” for students.

AP21084746281490
Downtown Burlington High School.

Some students and faculty told the AP that the lack of windows can be an issue, and noise travels because the dividing walls don’t reach the ceiling, but the temporary solution is working.

 “It’s way better than being stuck at home on your computer all day long,” Senior Lila Iyengar Lehman told the AP.

The cafeteria is in the space that once held Michael Kors products, and signs of the building’s previous life as a mall are still around.

AP21084746371573
Downtown Burlington High School.

Lunch buffets have replaced display cases.

“It’s amazing to think that we are standing in what used to be a department store,” Superintendent Tom Flanagan said at the opening ceremony.

AP21084746446475
Downtown Burlington High School.

“That we’re greeting people where we used to buy winter coats; reading books where they once sold fine China; taking phone calls in converted changing rooms; and learning science in the old suit racks,” he continued.

The china department was transformed into a library, and shelves that once held dinnerware now hold books for high school students.

Downtown Burlington High School
Downtown Burlington High School.

The gym, located in the warehouse, is still a work in progress.

Shuttered American malls are a symptom of the retail apocalypse that led to 9,300 store closings in 2019, 8,300 in 2020, and already more than 1,000 in 2021.

AP21084746481358 (1)
Downtown Burlington High School.

This trend is especially deadly for malls, which rely on anchor stores like Macy’s and Sears to drive foot traffic inside. 

As malls close, some simply sit empty and abandoned. Others are being repurposed for new uses.

AP21084746397091
Downtown Burlington High School.

Epic Games spend $95 million on a North Carolina mall with plans to turn it into a new company headquarters.

Other malls are being used as mass COVID-19 vaccination centers, including the Mall of America in Minnesota and the Townsquare Mall in New Jersey.

Read the original article on Business Insider

More than 1000 stores are closing in 2021 as the retail apocalypse drags on. Here’s the full list.

empty mall for lease
A strip mall store sits empty April 7, 2008 in Ontario, California.

  • Retailers have confirmed more than 1000 store closures in 2021 so far.
  • Disney, Best Buy, and Macy’s are a few of the stores planning to close locations this year.
  • More than 8,000 US stores closed last year, and experts predict 10,000 possible closures in 2021.
  • Visit the Business section of Insider for more stories.

Retailers have announced plans to close more than 1000 stores this year, and experts say the total could reach 10,000 stores or more.

Mass closures, referred to as the retail apocalypse, have continued over the past few years. In 2020, more than 8,300 US stores closed, following 9,300 in 2019, according to Insider analysis. Research firm Coresignt predicts this trend will continue into 2021. The COVID-19 pandemic made online orders surge over the past year, but it wreaked havoc on brick and mortar retailers. Other retailers that didn’t close filed for bankruptcy, including J Crew, Nieman Marcus, and JCPenney.

Here’s a list of stores expected to close this year.

Disney: 60 stores

GettyImages 1230737834
Disney store.

Disney plans to close 60 stores across North America by the end of 2021 to focus on e-commerce, the company announced.

The closures will affect 20% of Disney’s 300 global retail stores before it looks at more potential closures, especially in Europe, according to CNBC. Japan and China will not be affected. Disney also acknowledged that this change would lead to layoffs but declined to say how many people will be impacted.

Best Buy: 5

Best Buy

Best Buy is closing five stores across the US in early 2021, the retailer confirmed to four local news outlets.

The retailer plans to close two Richmond, Virginia area stores, along with one store each in Syracuse, New York, Carbondale, Illinois, and Brockton, Massachusetts.

Francesca’s: 140

francesca's

Francesca’s filed for Chapter 11 Bankruptcy in December and closed 140 of 700 total stores in January.

Read more: The CEO of Planet Fitness is preparing for a brick-and-mortar fitness boom as the company creates content to disrupt digital offerings made popular by the pandemic

Macy’s: 45

Macy's

Macy’s told employees at 45 locations that their stores would close in 2021, CNBC first reported.

The closures are part of the plan the retailer announced back in February 2020 to close 125 stores by 2023, about one-fifth of total locations. At the time, Macy’s also announced that it would cut 2,000 corporate jobs.

Bed Bath and Beyond: 43

bed bath and beynod

Home goods retailer Bed Bath & Beyond closed 43 stores in February, after 63 closures in 2020.

Paper Source: 11

Paper source store

Greeting card store Paper Source filed for Chapter 11 Bankruptcy and announced plans to close 11 of its 158 stores.

Goodwill: 8

Goodwill store

Goodwill announced plans to close eight Bay Area stores this year.

The Children’s Place: 122

The Children's Place

Children’s retail apparel chain The Children’s Place plans to close 122 stores in 2021 to complete the 300 closure goal it previously announced, according to fourth-quarter earnings.

Justice: 200

Loft Outlet

Owner Ascena Retail Group, which also owns Ann Taylor and Loft, announced plans to close the remaining 200 Justice stores.

H&M: 350

GettyImages 1216823191
Shoppers walk past a H&M store in north London, UK.

Fast fashion retailer H&M plans to close 350 stores in 2021 and open 100, for a net loss of 250 stores. The company cited a rise in e-commerce.

Fossil: 65

Fossil store

Accessories retailer Fossil is closing at least 65 stores after decreased sales in 2020, BisNow reported.

DSW: 65

DSW

DSW has plans to close 65 stores over the next four years, making up 10% of total locations after a 36% drop in sales in 2020, Biz Journals reported.

Read the original article on Business Insider

38 Disney stores are closing in March – here’s the full list

GettyImages 1230737834
Disney store.

  • Disney will close 60 North American stores by the end of the year.
  • 38 stores in 16 states are slated to close in March.
  • The entertainment giant plans to focus on growing e-commerce.
  • See more stories on Insider’s business page.

Disney plans to close 60 stores across North America by the end of 2021 to focus on e-commerce, the company announced.

The closures will affect 20% of Disney’s 300 global retail stores before it looks at more potential closures, especially in Europe, according to CNBC. Japan and China will not be affected. Disney also acknowledged that this change would lead to layoffs but declined to say how many people will be impacted. The company joins hundreds of other closures announced for 2021.

At least 38 of the closures are planned by March 23, according to Disney’s store locator.

“The global pandemic has changed what consumers expect from a retailer. We now plan to create a more flexible, interconnected e-commerce experience that gives consumers easy access to unique, high-quality products across all our franchises,” president of consumer products, games, and publishing Stephanie Young said.

Disney will focus on improving its e-commerce offerings, including the ShopDisney website and app, and offer more direct-to-consumer adult apparel, collectibles, and home goods.

There are the locations set to close in March.

Arizona

  • Chandler: Chandler Fashion Center, 3111 W Chandler Blvd.
  • Glendale: Arrowhead Towne Center, 7700 W Arrowhead Towne Center
  • Scottsdale: Scottsdale Fashion Square, 7014-2216 East Camelback Road

California

  • Arcadia: Westfield Santa Anita, 1400 South Baldwin Ave.
  • Mission Viejo: The Shops at Mission Viejo: 555 Shops at Mission Viejo Drive
  • Montclair: Montclair Plaza, 5060 East Montclair Plaza Lane
  • Montebello: The Shops at Montebello, 2134 Montebello Town Center
  • Roseville: Westfield Galleria at Roseville, 1151 Galleria Blvd.
  • Salinas: Northridge Mall, 720 Northridge Mall
  • San Diego: Fashion Valley Mall, 7007 Friar Road
  • San Jose: Oakridge Mall, 925 Blossom Hill Road
  • Santa Monica: 4Santa Monica Place, 395 Santa Monica Place

Colorado

  • Broomfield: FlatIron Crossing, 1 West Flatiron Crossing Drive

Florida

  • Miami: Aventura Mall, 19575 Biscayne Blvd.
  • Tampa: International Plaza, 32223 NW Shore Blvd.

Illinois

  • Chicago: State Street, 108 North State Street
  • Rosemont: Fashion Outlets of Chicago, 5220 Fashion Outlets Way

Indiana

  • Indianapolis: Castleton Square, 6020 East 82nd St.
  • Merrillville: Southlake Mall, 2144 Southlake Mall

Kansas

  • Overland Park: Oak Park Mall, 11447 West 95th St.

Maryland

  • Baltimore: White Marsh Mall, 8200 Perry Hall Blvd.
  • Hanover: Arundel Mills, 7000 Arundel Mills Circle

Missouri

  • St. Louis: St. Louis Galleria, 1155 Saint Louis Galleria

New Jersey

  • Freehold: Freehold Raceway Mall, 3710 Route 9

New York

  • Riverhead: Tanger Outlets Riverhead, 1770 West Main Street
  • Staten Island: Staten Island Mall, 2655 Richmond Ave.

Ohio

  • North Olmsted: Great Northern Mall, 564 Great Northern Mall

Oregon

  • Portland: Clackamas Town Center, 12000 Southeast 82nd Ave.

Pennsylvania

  • Pittsburgh: South Hills Village, 421 South Hills Village
  • Springfield: Springfield Mall, 1250 Baltimore Pike

Tennessee

  • Knoxville: West Town Mall, 7600 Kingston Pike

Texas

  • El Paso: Cielo Vista Mall, 8401 Gateway Boulevard West
  • Houston: Memorial City, 303 Memorial City Way
  • Houston: Willowbrook Mall, 2000 Willowbrook Mall
  • Laredo: Mall Del Norteo, 5300 San Dario Ave.
  • San Antonio: Ingram Park Mall, 6301 Northwest Loop 410
  • San Antonio: North Star Mall, 7400 San Pedro Ave.
  • San Antonio: Rivercenter Mall, 849 East Commerce Street
Read the original article on Business Insider

More than 400 stores are closing in 2021 as the retail apocalypse drags on. Here’s the full list.

empty mall for lease
A strip mall store sits empty April 7, 2008 in Ontario, California.

  • Retailers have confirmed more than 400 store closures in 2021 so far.
  • Disney, Best Buy, and Macy’s are a few of the stores planning to close locations this year.
  • More than 8,000 US stores closed last year, and experts predict 10,000 possible closures in 2021.
  • Visit the Business section of Insider for more stories.

Retailers have announced plans to close more than 300 stores this year, and experts say the total could reach 10,000 stores or more.

Mass closures, referred to as the retail apocalypse, have continued over the past few years. In 2020, more than 8,300 US stores closed, following 9,300 in 2019, according to Insider analysis. Research firm Coresignt predicts this trend will continue into 2021. The COVID-19 pandemic made online orders surge over the past year, but it wreaked havoc on brick and mortar retailers. Other retailers that didn’t close filed for bankruptcy, including J Crew, Nieman Marcus, and JCPenney.

Here’s a list of stores expected to close this year.

Disney: 60 stores

GettyImages 1230737834
Disney store.

Disney plans to close 60 stores across North America by the end of 2021 to focus on e-commerce, the company announced.

The closures will affect 20% of Disney’s 300 global retail stores before it looks at more potential closures, especially in Europe, according to CNBC. Japan and China will not be affected. Disney also acknowledged that this change would lead to layoffs but declined to say how many people will be impacted.

Best Buy: 5

Best Buy

Best Buy is closing five stores across the US in early 2021, the retailer confirmed to four local news outlets.

The retailer plans to close two Richmond, Virginia area stores, along with one store each in Syracuse, New York, Carbondale, Illinois, and Brockton, Massachusetts.

Francesca’s: 140

francesca's

Francesca’s filed for Chapter 11 Bankruptcy in December and closed 140 of 700 total stores in January.

Read more: The CEO of Planet Fitness is preparing for a brick-and-mortar fitness boom as the company creates content to disrupt digital offerings made popular by the pandemic

Macy’s: 45

Macy's

Macy’s told employees at 45 locations that their stores would close in 2021, CNBC first reported.

The closures are part of the plan the retailer announced back in February 2020 to close 125 stores by 2023, about one-fifth of total locations. At the time, Macy’s also announced that it would cut 2,000 corporate jobs.

Bed Bath and Beyond: 43

bed bath and beynod

Home goods retailer Bed Bath & Beyond closed 43 stores in February, after 63 closures in 2020.

Paper Source: 11

Paper source store

Greeting card store Paper Source filed for Chapter 11 Bankruptcy and announced plans to close 11 of its 158 stores.

Goodwill: 8

Goodwill store

Goodwill announced plans to close eight Bay Area stores this year.

The Children’s Place: 122

The Children's Place

Children’s retail apparel chain The Children’s Place plans to close 122 stores in 2021 to complete the 300 closure goal it previously announced, according to fourth-quarter earnings.

Read the original article on Business Insider

Here’s how GameStop went from dying retail relic to a ‘meme stock’ that has rattled the American stock market

gamestop
A customer with a Nintendo DS video game system in Los Angeles, November 21, 2004

  • GameStop may be the largest video-game retailer, but it’s a dying one, and it’s been that way for years.
  • The COVID-19 pandemic shot a much-needed jolt of life into GameStop as people sought at-home entertainment.
  • An online forum sent GameStop’s stock price through the roof, shaking up the US financial system in the process.
  • Visit Business Insider’s homepage for more stories.

Two years ago, GameStop was quickly deteriorating, ready to become a mere relic of the video game retail era.

The gaming retailer, the largest in the industry, began to flail within the past decade as game developers turned toward creating digital versions of their games. Customers went from camping outside stores to be the first to snag the new version of “Call of Duty” to downloading or streaming it online from their homes. 

Read more: Some GameStop store employees are getting investing questions from customers and they’re in the dark about how to handle it

Here’s how GameStop was merely a dying brand two years ago, found a temporary safety net during the pandemic in 2020, and has evolved into a full-blown “meme stock” that has sent earthquakes through the traditional American financial system. 

GameStop was at one point the go-to place to get your hands on the hottest new video games of the season.

gamestop
A Seattle customer with the New Super Mario Bros. 2 game in a GameStop store in 2012.

But like other brands that sold physical entertainment (remember Blockbuster?) GameStop started to see a drop in foot traffic and in sales. 

In September 2019, GameStop CFO Jim Bell announced the company was “on track to close between 180 and 200 underperforming stores globally by the end of this fiscal year.”

GameStop closed 462 more stores in 2020.

The video game industry at large was evolving to cater to new consumer demands, and gamers began to stream or download games online from their homes.

gamestop video games 32

GameStop was slow to catch up with the times, and it suffered.

In June 2018, GameStop announced that it was in “exploratory discussions” with potential buyers. Its share price slumped to around $4 and floated there for years.

Insider visited GameStop locations in New York City and in San Francisco in mid-2019 and saw how the company was unable to or unwilling to evolve.

The company posted dismal quarterly earnings in mid-2019 and also eliminated its quarterly cash dividend, meaning it couldn’t afford to pay shareholders what they were owed.

Read more: Microsoft’s Xbox deal with GameStop includes a revenue share agreement that gets the ailing retailer a foot in digital retail

Things were looking bleak for GameStop – until the COVID-19 pandemic emerged in March 2020.

gamestop store
A GameStop store in May 2020.

Suddenly, people were cut off from going to the office, the movies, concerts, restaurants, and other leisure activities.

And GameStop, long a straggler to the digital awakening of the video game world, saw a slight boost. its online sales surged over 1,500% between March 1 and April 10, 2020, according to a March report from Earnest Research in The New York Times. The spike coincided with the releasse of Nintendo’s uber-popular “Animal Crossing: New Horizons,” and the game and its console were available in stores, not on smartphones.

In July 2020, GameStop CEO George Sherman told Dallas Innovates that the company’s e-commerce sales spiked 519% in the first three months of 2020. Sherman also said GameStop leaned heavily on its feature that allowed customers to buy online and pick up curbside at physical retail locations.

In September 2020, Ryan Cohen – the cofounder and ex-CEO of online pet supply company Chewy – bought up nearly 12% of GameStop’s shares.

Ryan Cohen
Ryan Cohen.

Cohen also began pushing the company to focus more on e-commerce and unveiled a plan that would put GameStop head-to-head with Amazon. The plan specifically was to sell and ship a “wide range of merchandise.”

The prospect of GameStop morphing into an Amazon rival sent the gaming company’s share price up 28%.

On January 11, 2021, GameStop officially welcomed Cohen to its board of directors. And on the same day, members of the Reddit forum r/wallstreetbets banded together to collectively buy up GameStop shares. The subreddit had 2 million members at the time. It has since surged to more than 6 million. 

That large-scale buying sent GameStop’s share price to levels that it’s been unfamiliar with amid its years-long turmoil.

gamestop store
A New York City GameStop location on January 28, 2020.

Its share price and market capitalization were around $340 and $23 billion, respectively, at one point, putting the company on par with large corporations that actually make money as Insider’s Josh Barro wrote. That value is not likely to hold.

As the shares have soared, investors have jumped in to short GameStop’s stock, meaning they were selling it with the hopes that it will decline to pocket the difference. That didn’t happen, and these short-sellers have lost billions.

Read more: How hedge funds are tracking Reddit posts to protect their portfolios after the Wall Street Bets crowd helped tank Melvin Capital’s short positions

There are four main reasons why GameStop stock was targeted, which Insider’s Ben Gilbert and Allana Akhtar laid out, and the whole ordeal involves a slew of factors: Wall Street greed, financial instability, and the astonishing power of the internet’s collective will. GameStop has been called a “meme stock,” internet speak for a stock that was heavily influenced by people online.

At the end of the day, the Reddit-bred gaggle of day-traders may have thrust GameStop back into the public eye with its stock market stunt. But the company is still fighting the same fight it’s been facing: adapting to a changing video game industry that it had long dominated. 

Read the original article on Business Insider

Insider Retail: Logistics startups look to micro-warehouses and the vaccine rollout hits retail stores

CVS NYC
CVS list: diapers, hand sanitizer, COVID-19 vaccine.

Big “ICYMI” energy in the newsletter today. Look, we get it. There was some other big news this week. But Insider’s retail team always has you covered when it comes to the biggest retail business stories.

This week’s edition covers retailers, like CVS, Kroger, and Walgreens, rolling out vaccines. And we take a look at a startup that’s turning vacant retail stores into micro-warehouses for e-commerce orders. 

If you haven’t already subscribed to Insider Retail, click here to get me, Gloria Dawson, senior editor of retail, and our associate editor, Danni Santana, in your inbox every week.

How Walgreens, CVS, Kroger, and other retailers plan to leverage tech, convenience, and public trust to get the chaotic mass vaccine rollout back on track

Coronavirus vaccine
Pharmacies are finding themselves with leftover coronavirus vaccines, meaning some people can score a shot early with the right planning.

It’s no secret that the vaccine rollout has been less-than-smooth. Could retailers help get things back on track? Well, they certainly hope so. It’s not the craziest idea. As Alvin Tran, a social epidemiologist at the University of New Haven told our reporters, these brands lend name recognition, trust, and their own technology to the process. 

Drug stores also aren’t the only retailers who want a piece of the vaccine story:

Logistics startup Fabric has raised $136 million to build shipping warehouses in unused real estate like retail stores and gyms

Fabric MFC

Here’s a trend for you all: Retail stores close as consumers flock to e-commerce during the pandemic. Logistics startups then use vacant retail space as micro-warehouses to fulfill e-commerce orders. Our Correspondent Madeline Stone wrote about Fabric, a big player in this particular retail life cycle story.

Fascinated by the micro-warehousing trend? You’ve come to the right newsletter.

Read the original article on Business Insider

27 clothing brands that have announced major store closures

francesca's
Francesca’s store.

Once highly popular clothing stores are facing mass closures. Though some retailers were already struggling due to a rise in online shopping, the coronavirus pandemic ground in-store shopping to a halt, leaving those without well-developed e-commerce businesses in serious trouble, according to Forbes.

Victoria’s Secret was already in decline before the pandemic and announced in May 2020 that it plans to close up to 250 stores in the US and Canada. Lord & Taylor announced in August that it had filed for bankruptcy and would begin liquidating its 38 remaining stores. And most recently, Macy’s confirmed it would be closing 37 more of its stores by the end of 2021.

Take a look at all the clothing brands and stores you’ll see less of in the future.

Francesca’s filed for bankruptcy in December 2020 and announced plans to close 140 of the retailer’s remaining 700 stores by the end of this month.

francesca's
Francesca’s store.

The women’s apparel and accessories chain is currently seeking “authorization to pursue an auction and sale process” expected to close on January 20, according to CNBC.

Business Insider reported that Francesca’s sales fell 29% over the quarter despite rising online sales, according to the retailer’s second-quarter earnings.

Gap Inc. announced last year it would begin exiting malls and shutter 350 stores by 2024.

Gap.
Gap.

As a result, 80% of remaining Gap stores will be located in off-mall locations, according to AP.

Gap closed 40 stores globally in early 2020 as part of a plan to close 230 stores over the course of two years. Twenty-nine of the closings were in the United States. 

A statement on the company’s website said, “We are committed to quickly, thoughtfully, and decisively addressing stores that are underperforming or don’t fit our vision for the future of Gap.”

According to a previous report by Business Insider, the company plans to open more stores under other banners including Old Navy and Athleta. 

Gap Inc. said it plans to close 130 of its North American Banana Republic stores in the next three years.

Banana Republic store
Banana Republic store in Scarsdale, New York.

A previous article from Business Insider reported earlier this year that net sales at the fashion retailer were down 52%. 

“Banana Republic continues to focus on taking action to adjust to consumer preferences and improve inventory mix as the shift to casual fashion during the stay-at-home requirements has left the brand’s workwear assortment disadvantaged,” the company said in its August earnings release.

Famed discount department store Century 21 will also close all of its locations.

century 21 store
Century 21.

Century 21 announced on September 10 that the retailer would close all 13 of its locations in New York, New Jersey, Pennsylvania, and Florida, after failing to receive money from its insurers, according to the New York Times.

“While retailers across the board have suffered greatly due to Covid-19, and Century 21 is no exception, we are confident that had we received any meaningful portion of the insurance proceeds, we would have been able to save thousands of jobs and weather the storm, in hopes of another incredible recovery,” Raymond Gindi, a co-chief executive at Century 21, said in a press release, referencing Century 21’s comeback after the September 11 attacks which devastated downtown Manhattan, where the chain’s famous New York City location is found.

American Eagle Outfitters could close up to 500 stores in the next two years.

An Omani man passes in front of an American fashion brand, American Eagle Outfitters in City Center Mall in Muscat, Oman, February 11, 2019. REUTERS/Hamad I Mohammed
American Eagle Outfitters storefront.

According to an investor press release, net revenue from American Eagle and Aerie fell 15% to $884 million in the second quarter.

After 194 years in business, Lord & Taylor announced in August that it would be closing all of its stores.

Lord & Taylor
Lord & Taylor storefront.

The first department store established in the United States, Lord & Taylor announced on August 27, 2020, that it had filed for bankruptcy and would begin liquidating its 38 remaining stores.

“While we are still entertaining various opportunities, we believe it is prudent to simultaneously put the remainder of the stores into liquidation to maximize value of inventory for the estate while pursuing options for the company’s brands,” Ed Kremer, Lord & Taylor’s chief restructuring officer, said in a press statement.

Victoria’s Secret announced it would be closing up to 250 stores in the US and Canada.

Victoria's Secret.
Victoria’s Secret.

L Brands, which owns Victoria’s Secret, announced in May that it would close 251 stores in the US and Canada. In the US, 235 Victoria’s Secret and three Pink stores will close, and the rest will be in Canada. According to Forbes, Victoria’s Secret’s net sales fell 46% in the first fiscal quarter of 2020.

JCPenney filed for bankruptcy in May and could close more than 240 stores.

JCPenney.
JCPenney.

According to CNN Business, JCPenney missed debt payments and is nearly $4 billion in debt. CEO Jill Soltau said in a press release, “The closure of our stores due to the pandemic necessitated a more fulsome review to include the elimination of outstanding debt.”

JCPenney plans to close a total of 242 stores between this fiscal year and the next.

Macy’s plans to close 125 stores by 2023, with dozens of stores closing this year.

Macy's.
Macy’s.

According to a previous Business Insider report, the closings account for about one-fifth of the company’s total stores. The retailer also said at the time it was planning to cut 2,000 corporate jobs and closing several offices. 

Macy’s CEO Jeff Gennette said in a statement, “We are taking the organization through significant structural change to lower costs, bring teams closer together, and reduce duplicative work.”

According to CNBC, 37 stores are expected to shutter by the end of 2021.

The owner of Zara, Inditex, announced in June that it would close up to 1,200 stores around the world.

Zara.
Zara.

As Business Insider previously reported, the stores will close over the next two years. The company plans to shift its focus to online sales. 

Inditex hasn’t announced which locations will close, but said in a statement it will be “stores at the end of their useful life.”

CEO Pablo Isla said in an Inditex report, “The overriding goal between now and 2022 is to speed up full implementation of our integrated store concept, driven by the notion of being able to offer our customers uninterrupted service no matter where they find themselves, on any device and at any time of the day.”

In 2019, Chico’s announced it would close 250 stores over the next three years.

Chico's.
Chico’s.

Chico’s operates Chico’s, White House Black Market, and Soma, and will close 100 Chico’s locations, 90 White House Black Market stores, and 60 Soma locations, Business Insider previously reported

Chico’s announced closures in early 2019 and had closed 49 locations by the end of that year.

In March, Modell’s filed for bankruptcy and announced it would close all of its 153 stores.

Modell's.
Modell’s.

According to the New York Post, “The chain, which sold mid-priced activewear brands, faced increasing competition from Dick’s Sporting Goods, the only national sporting goods chain left. Dick’s recently pulled out of a sales slump by focusing on service at the stores and catering more to women.” 

Guess said in June that it planned to close 100 locations worldwide in 18 months.

Guess.
Guess.

Chief Executive Officer Carlos Alberini told Bloomberg analysts, “The recent stock performance and expected demand under our new-normal model made very clear that our store portfolios around the world could be optimized to increase profitability.”

Express stated in January 2020 that it plans to close approximately 100 of its remaining locations by 2022.

Express.
Express.

Express closed nine stores in 2019 and closed 31 stores in 22 states in January. Thirty-five stores are expected to close by January 2021, leaving 25 to shut down by the end of 2022, according to Business Insider

CEO Tim Baxter said in a statement, “My expectation is that we will return to a mid-single-digit operating margin through a combination of low-single-digit comp sales growth, margin expansion and cost reductions. This will of course take some time, but we have a clear path.”

Neiman Marcus is shuttering five of its locations, as well as 17 of its off-price Neiman Marcus Last Call stores.

Neiman Marcus Last Call.
Neiman Marcus Last Call.

Among the list of closed locations is Neiman Marcus’ Hudson Yards location in New York City, which opened a little over a year ago to “significant fanfare,” according to a previous article by Business Insider.

Following the bankruptcy filing, Neiman Marcus CEO Geoffroy van Raemdonck said in a statement, “Like most businesses today, we are facing unprecedented disruption caused by the COVID-19 pandemic, which has placed inexorable pressure on our business.”

Nordstrom said in May that it would close 19 locations permanently.

Nordstrom.
Nordstrom.

The company announced in early May that it would close 16 stores in Arizona, California, Colorado, Florida, New Jersey, Maryland, Oregon, Virginia, Texas, and Puerto Rico, according to Business Insider.

A few weeks later, the company announced additional closures of its luxury apparel Jeffrey stores in Atlanta, New York City, and Palo Alto.

The Children’s Place announced in June that it would shutter 300 stores permanently.

The Children's Place.
The Children’s Place.

The kids’ clothing company said it would close 200 stores this year and 100 more in 2021.

In a press release, CEO Jane Elfers said, “In an effort to structurally position the company for continued success, we are significantly accelerating our fleet optimization initiative, and focusing our resources on accelerating our digital sales, both key elements of our long-standing transformation strategy.”

Destination Maternity filed for bankruptcy in October 2019 and said it would shut down 183 stores.

Destination Maternity.
Destination Maternity.

Destination Maternity saw several closures in Wisconsin in March, continuing its plan to shutter a total of 183 locations.

According to USA Today, “The company, in a court document, blamed the retail industry’s turmoil, declining birth rates, high rents and leadership turnover for faltering. The company has had five CEOs in the last five years.”

G-III Apparel Group announced in June that it plans to close all of its Wilsons Leather and G.H. Bass stores.

Wilson's Leather.
Wilsons Leather.

G-III Apparel Group, which also owns DKNY, Donna Karan, Calvin Klein, and Tommy Hilfiger, said in June that it plans to close all of its 110 Wilson’s Leather and 89 G.H. Bass stores, according to a previous Business Insider report.

Chairman and CEO Morris Goldfarb said in a statement, “With a focus on enhancing shareholder value, we have made the difficult decision to close all of the Wilsons Leather and G.H. Bass stores and have entered into agreements for the early lease termination of a significant majority of these stores.”

Christopher & Banks announced in 2018 that it planned to close up to 40 stores by the end of 2020.

Christopher & Banks.
Christopher & Banks.

According to BizJournals, the company lost $8.8 million in one 2018 quarter but saw online sales increase by 10.7%. 

In April 2019, Star Tribune reported that Christopher & Banks was delisted from the New York Stock Exchange after failing to meet a minimum $15 million market cap.

Lucky Brand filed for bankruptcy in July and announced it would close at least 13 locations.

Lucky Brand.
Lucky Brand.

Lucky Brand currently has about 200 locations in the United States and said it plans to close at least 13 stores. The locations closing will be in Arkansas, California, Connecticut, Florida, Illinois, Michigan, Mississippi, Nevada, and Puerto Rico.

Interim CEO Matthew Kaness said in a statement, “While we are optimistic about the reopening of stores and our customers’ return, the business has yet to recover fully.”

Brooks Brothers filed for bankruptcy on July 8. The brand will be closing about 51 stores.

Brooks Brothers.
Brooks Brothers.

According to CNBC, a spokesperson for the retailer said, “Over the past year, Brooks Brothers’ board, leadership team, and financial and legal advisors have been evaluating various strategic options to position the company for future success, including a potential sale of the business,” and added, “During this strategic review, Covid-19 became immensely disruptive and took a toll on our business.”

On July 8, Business Insider reported that 38 Brooks Brothers stores had permanently closed.

J. Crew filed for bankruptcy in May and announced in July it was closing at least eight stores.

J. Crew.
J. Crew.

Business Insider reported that a list of eight stores that are set to close in August was released in a bankruptcy filing on July 10. The closing locations are in Nashville, Tennessee; Emeryville, California; Chicago, Illinois; Washington, DC; Southampton, New York; St. Paul, Minnesota; Carlsbad, California; and Deer Park, Illinois.

However, J. Crew has since released a statement that the company has re-opened 458 stores, representing approximately 95% of its total store fleet, after a series of temporary closures due to the coronavirus pandemic.

New York & Co. stores may become obsolete.

new york co
New York & Co. storefront.

Parent company RTW Retailwinds announced in July that the company had filed for bankruptcy and planned to close most, “if not all,” of its brick-and-mortar stores.

Tailored Brands, which owns Men’s Wearhouse and Jos. A. Bank, said in July that it would close up to 500 stores over time and cut its corporate workforce by 20%.

men's wearhouse storefront.JPG
Men’s Wearhouse storefront.

In August, the parent company filed for Chapter 11 bankruptcy protection.

According to Business Insider, the company said in a news release that it has “reevaluated the forecasted profitability and strategic value of every store in its fleet relative to current and anticipated trends in consumer demand and has identified up to 500 stores for closure over time.”

Sears announced in November 2019 that it would close 51 stores by February 2020.

Sears.
Sears.

According to Business Insider, the parent company of Sears and Kmart, Transform Holdco, announced it would close 51 Sears stores and 45 KMart stores — 182 Sears and KMart stores will remain following the closures.

Fashion retailer Coldwater Creek announced in July 2020 that it would be shutting down its stores and website.

Coldwater Creek
Coldwater Creek.

The retailer explained it would be fulfilling orders that were already placed but would be closing its stores and website.

“The challenging issues brought on by COVID-19 have led us down a path we were not expecting,” Coldwater Creek said on its website. “Coldwater Creek’s retail locations and website are closed and we are unable to take any orders. Thank you for being a valued part of our family and story. Please check back now and then for any updates.”

In September, it was announced that Coldwater Creek was acquired by Hong Kong firm Newtimes Group, though nothing has been announced as to whether the brand will return or be restructured.

Read the original article on Business Insider