Starbucks is leaving America’s dying malls and focusing on drive-thrus

FILE PHOTO: People sit in a Starbucks cafe in a mall in Beijing, China, January 29, 2019.   REUTERS/Thomas Peter/File Photo
FILE PHOTO: People sit in a Starbucks cafe in a mall in Beijing

  • Some Starbucks employees report their mall stores are closing.
  • Last year Starbucks said it was updating its strategy to focus on drive-thru and pick-up store formats.
  • Starbucks says it will still have some stores in malls.
  • See more stories on Insider’s business page.

The suburbs are making a comeback, but malls are getting left behind as Starbucks wants out, too.

Three Starbucks employees in three states, whose employment was confirmed by Insider, shared that their mall-based stores closed in the last month. They all requested anonymity for fear of retaliation.

One barista in a Texas mall said he was “blindsided” at the news of the closure. All the baristas Insider spoke to were offered transfers to other locations.

Closing mall kiosks is part of Starbucks’ strategy of investing more in drive-thru and pickup locations. Last summer, Starbucks announced it would close 400 US stores to “strategically optimize” its portfolio, with the greatest changes in urban markets.

Read more: How a tiny food-tech startup convinced industry heavyweights like Chick-fil-A and Taco Bell to rely on it to fight a labor shortage

“Starbucks continues to make meaningful progress to reposition our US store portfolio through this trade area transformation, which is now nearly 80% complete. In the past 12 months, we have opened 554 new stores combined with in-store seating and drive-thru service, repositioning our store portfolio to create a blend of traditional Starbucks stores with convenience-led formats,” a Starbucks spokesperson told Insider.

Fast food and fast-casual brands across the country have optimized drive-thrus over the last year as they became crucial in the age of COVID-19. Drive-thru orders have grown across the fast-food industry since the pandemic closed many dining rooms. On-the-go orders, meaning drive-thru and pickup orders, made up 80% of Starbucks orders prior to the pandemic, Starbucks told Insider, and increased more than 10% over pre-pandemic levels in the first quarter of 2021.

Starbucks has invested in new technology and formats as drive-thrus become even more critical to the brand. The coffee chain has started adding double drive-thru lanes, along with implementing video ordering capabilities and handheld tablets for baristas to take orders. These developments can all decrease wait times and make drive-thrus more efficient by reducing bottlenecks, Kalinowski Equity Research founder Mark Kalinowski previously told Insider.

The coronavirus pandemic sped up the shift to pick-up and to-go locations, Starbucks CEO Kevin Johnson said in an earnings call in 2020.

Despite the shift in strategy, Starbucks says “high-traffic areas like malls, airports, campuses, and our other licensed locations will remain a key pillar of the Starbucks experience.” This reiterates the chain’s earlier statement last year, saying “Our vision is that each large city in the US will ultimately have a mix of traditional Starbucks cafés and Starbucks Pickup locations.”

Starbucks decision to focus on drive-thrus and other formats over some malls makes sense. The retail apocalypse has made headlines for years, as some malls die a slow death and retail vacancy rates hit new highs. More than 12,000 stores closed in 2020, many of them crucial anchor stores that once kept malls afloat. The list of 2021 closures is still growing.

Do you have a story to share about a retail or restaurant chain? Email this reporter at mmeisenzahl@businessinsider.com.

Read the original article on Business Insider

I went to American Dream, the behemoth New Jersey mall with 2 theme parks and ski slope, and saw the devastating effects of the pandemic on retail

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

  • American Dream opened in October 2019 after more than 20 years of planning and development.
  • Just after it opened, however, the pandemic hit, and the mall was forced to close.
  • I visited American Dream and saw how badly retail has been hit during the pandemic with the rise of e-commerce and the fall of in-person shopping.
  • See more stories on Insider’s business page.
In the shadow of New York City is American Dream, a 3-million-square-foot mall and one of the largest in North America.

American Dream mall

Read More: The American Dream megamall is finally opened after more than 2 decades. Here’s how the 3 million-square-foot complex went from an idea to a reality.

More than 20 years in the making, the mall opened in October 2019 only to come to grips with a worldwide pandemic that would accelerate the decline of in-person shopping while boosting e-commerce to unforeseen heights.

Going inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

But with COVID-19 on the ropes, American Dream is once again a reality and its doors are open to shoppers, adventure-seekers, and the host of other visitors to whom the infamous mall caters.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

I stopped by American Dream, conveniently located off the New Jersey Turnpike right next to MetLife Stadium, on my way to Newark airport. Here’s what I found.

MetLife Stadium from American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

I entered the mail from the retail parking lot on the south side. At first, the three-level structure seemed deserted despite a crowded parking lot on the weekday of my visit.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

But it wasn’t that the mall was empty. American Dream is so massive that it just seemed empty by comparison. There are around 100 stores and retailers at present, around a third of the mall’s capacity.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

Besides its size, though, there was nothing special about the mall part of American Dream. There wasn’t much here that I couldn’t find in my local mall, for example, and it lacked a lot of the high-end retailers found in nearby malls like The Mall at Short Hills.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

That may change, however, in September when more than 20 luxury retailers are slated to open.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

Source: WWD

Many of the stores that were open – like Primark, Best Buy, and Zara – were cavernous in size. Some were even two levels.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

I was truly impressed with how deep some of them were, including Urban Planet. It’s a testament to the mall’s size.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

The lack of patronage, however, has forced some of the larger stores to scale back. It’Sugar, for example, is scaled down to one floor.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

Speaking of the confectionary, this was the first time I’d been in a self-serve candy store since the pandemic. Patrons are required to wear gloves when making their selections.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

It’s a fair COVID compromise that lets customers experience the joy of scooping up their own candy.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

Despite the mall’s size, however, it doesn’t have that Mall of America feel. I attribute that closed-in feeling to the lack of natural light in the mall.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

There are not a lot of windows or skylights in the main shopping areas or even the atriums.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

The best parts of the mall, I found, were the spaces with skylights so that natural light could come in.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

This luscious gnome garden, for example, was my favorite part of the mall and a natural attraction.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

This was also the only spot in the mall that had the true communal feeling of a mall. The only problem was that it was flanked by bare walls.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

Some of the areas of the malls that hadn’t been filled were walled out from public access completely.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

The food court featured many mall favorites and eateries like Kelly’s Cajun Grill, Wendy’s, and Taco Bell.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

There were some higher-end food options, like Grisini, but they hadn’t yet opened for business during my visit.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

Being an amateur mall food enthusiast, I had to try the staple of any mall food court: bourbon chicken, from Kelly’s Cajun Grill. And to American Dream’s credit, it was spot on.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

I continued my journey and found the main atrium, another centerpiece where the mall’s size truly shows.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

But once more, I didn’t find it to be too welcoming. A few couches were laid out in lieu of a grand centerpiece in the way other malls have.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

In addition to good food court food, American Dream also featured the other two staples of a mall: a Hot Topic…

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

And Spencer’s.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

Some stores that I’ve never seen in my local malls can be found in American Dream include the Beef Jerky Experience…

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

And a Korean-themed store, which proved to be one of my favorites.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

Masks aren’t required for vaccinated shoppers but each store can have its own rules, as this one did.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

BTS was a major theme, unsurprisingly, and I couldn’t help but hear the song “Dynamite” in my head while browsing.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

Kakao Friends, pointed out to me by former Seoul resident and Insider’s own Rachel Premack, was another big theme on display.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

I also got a glimpse at Korean apparel, a style that I never really had seen promoted in my local malls in the past.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

Another mall staple that American Dream can boast is animal rides. I fondly remember riding on these in my youth.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

Attractions are truly where the mall shines and there’s no shortage of them. Big Snow is the massive indoor ski slope that offers year-round snowboarding.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

Two hours on the artificial slope, with rentals included, starts at $69.99. Without rentals, it can be as cheap as $34.99.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

Attractions for children are the bulk of the offering, however, and include Legoland…

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

Sea Life Aquarium…

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

Angry Birds-themed miniature golf…

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

And Out of This World miniature golfing.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

There’s even an ice skating rink that doubles as a hockey rink. Prices start at $25 for those ages 10 and up.

Inside American Dream - Visiting American Dream 2021Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

For more thrill-seeking kids, Nickelodeon Universe and DreamWorks Water Park are the two main amusement parks in the mall.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

Nickelodeon Universe offers roller coasters and standard theme park attractions while DreamWorks Water Park offers water slides, wave pools, and tube rides.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

Masks are similarly not required in DreamWorks Water Park as “there is no evidence that the virus that causes COVID-19 can be spread to people through the water in pools, hot tubs, spas, or water play areas,” American Dream claims.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

It’s no secret that mall patronage is in decline following the rise of internet shopping, as Taylor Swift notes in her song “Coney Island,” and these attractions give consumers a reason to come to the mall that isn’t shopping.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

Read More: Taylor Swift threads one of the biggest business stories in 2020 into her music, as the retail apocalypse emerges as a crucial theme through ‘Folklore’ and ‘Evermore’

But these attractions aren’t cheap. A standard adult ticket for Nickelodeon Universe is $75.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

DreamWorks Water Park is a more expensive $99 per adult.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

So far, the inner 1980s teenager in me wasn’t overly impressed. Unless you’re willing to pay up, there’s not much that this mall has to offer after visitors get bored marveling at its size.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

But American Dream definitely does try to tap into that 1980s-era nostalgia.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

There’s even a DeLorean replica a la “Back to the Future.” Marty McFly, however, would quickly note this isn’t the average Twin Pines Mall.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

In some areas, American Dream does a great job of papering over the cracks – in this case, its lack of stores – but other places seem bare.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

American Dream hasn’t yet reached its full potential and one can hardly blame it as the pandemic accelerated the downfall of malls and the continued rise of the e-commerce giants that are making malls obsolete.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

Once more stores line its hallways, American Dream may very well be the premier shopping destination that it has always wanted to be.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

Until then, at the very least, there’s Cinnabon.

Inside American Dream - Visiting American Dream 2021
Inside the American Dream mall in East Rutherford, New Jersey.

Read the original article on Business Insider

The rise, fall, and comeback of Victoria’s Secret, America’s biggest lingerie retailer

victoria's secret
  • Victoria’s Secret is the largest lingerie retailer in the US, and has been for several decades.
  • It achieved explosive success in the late 1990s and 2000s but has been accused of losing relevance in recent years.
  • The company is currently overhauling its brand image, and has abandoned its Angels for activists and entrepreneurs.
  • Here’s the story of the rise, fall, and subsequent comeback of the brand.
  • Visit Business Insider’s homepage for more stories.
Victoria’s Secret was founded in 1977 by American businessman Roy Raymond.

roy raymond
Roy Raymond (left).

Inspired by an uncomfortable trip to a department store to buy underwear for his wife, Raymond set out to create a place where men would feel comfortable shopping for lingerie. He wanted to create a women’s underwear shop that was targeted at men.  

He named the brand after the Victorian era in England, wanting to evoke the refinement of this period in his lingerie.

Victoria Secret vintage catalog 1982

His vision was summed up by Slate’s Naomi Barr in 2013: “Raymond imagined a Victorian boudoir, replete with dark wood, oriental rugs, and silk drapery. He chose the name ‘Victoria’ to evoke the propriety and respectability associated with the Victorian era; outwardly refined, Victoria’s ‘secrets’ were hidden beneath.”

He went on to open a handful of Victoria’s Secret stores and launched its famous catalog. 

By 1982, the company was making more than $4 million in annual sales, but according to reports, it was nearing bankruptcy at the time. It was at this point that Les Wexner swooped in.

Les Wexner
Les Wexner (center).

Wexner, who founded L Brands (formerly Limited Brands) was already making a name for himself in the retail world as he gradually built up an impressive empire.

By June 1982, Limited — which had previously acquired Express and Lane Bryant — was listed on the New York Stock Exchange. One month later, under Wexner’s leadership, the company acquired Victoria’s Secret’s six stores and its catalog for $1 million. 

Wexner turned Raymond’s vision on its head, creating a store that was focused on women rather than men.

Les Wexner

He was closely following the European lingerie market of that time and wanted to bring this aesthetic to the US. So, he set out to create a more affordable version of European upscale brand “La Perla” — lingerie that looked luxurious and expensive but was affordable.  

And it worked. By the early 1990s, Victoria’s Secret had become the largest lingerie retailer in the US, with 350 stores nationally and sales topping $1 billion.

Victoria's Secret runway show
Victoria’s Secret spring lingerie collection in New York Tuesday, February 6, 1996.

Source: The Telegraph

The brand began to cement its image over the next few years. In 1995, its famous annual fashion show was born.

Ed Razek
Ed Razek.

The show, which was run by Ed Razek (longtime chief marketing officer of L Brands), became an iconic part of the brand’s image. 

Razek and his team were responsible for hand-picking the models to walk the show. Because of this, he became one of the most important people in the modeling world, helping to launch the careers of Gisele Bündchen, Tyra Banks, and Heidi Klum.

 

In 1999, the show aired for the first time online. Time described it as the “internet-breaking moment” of this era after 1.5 million viewers tried to tune in and crashed the site.

Victoria's Secret
Model Tyra Banks the Victoria’s Secret fashion show Wednesday, Feb. 3, 1999 in New York.

Source: Time

Meanwhile, the brand was also launching some of its best-known and most successful products, including its heavily padded Miracle Bra and Body by Victoria.

Body by Victoria was a “blockbuster success” and more than doubled the sales volume of any other bra that Victoria’s Secret had previously launched, Michael Silverstein wrote in his book, “Trading Up.”

Around this time (1997), the idea of the Victoria’s Secret “Angel” came into play after a commercial featuring Helena Christensen, Karen Mulder, Daniela Peštová, Stephanie Seymour, and Tyra Banks ran to promote its “Angels” underwear collection.

Victoria's Secret old

From then on, the term “Angel” become synonymous with the brand.

Throughout the ’90s and early 2000s, its commercials featured heavily made-up and scantily dressed Angels.

Victoria's Secret ad 1997

Razek hired the best photographers and television directors in the world to make commercials for the brand. 

The runway shows became more lavish. In 2000, model Gisele Bündchen walked the runway in what was then the most expensive item of lingerie ever created, a $15 million diamond-and-ruby-encrusted ‘Fantasy Bra.’

Gisele

It’s been tradition for an Angel to wear a “Fantasy Bra” at every runway show since 1996. These change each year.

In 2000, Sharen Jester Turney came on as CEO of Victoria’s Secret Direct, heading up its catalog business.

Sharen Jester Turney

According to reports at the time, Turney wanted to remove the “hooker looks” in the catalog and made the aesthetic more like Vogue than Playboy.

She became CEO of the whole brand in 2006. Under her nine-year tenure, the company thrived; sales increased by 70% to $7.7 billion.

Sharen Jester Turney and VIctoria's Secret models

Source: Business Insider

Turney abruptly stepped down in 2016 and was succeeded by Wexner as interim CEO.

Sharen Turney

Wexner made a series of quick and fast changes: killing the catalog, swimwear, and apparel to focus solely on lingerie, the core part of its business.

He also split the brand into three — Victoria’s Secret Lingerie, Victoria’s Secret Beauty, and Pink — and recruited a CEO for each division.

Jan Singer became CEO of Victoria’s Secret Lingerie in September 2016.

Jan Singer

Between 2015 and 2018, sales began to falter.

Victoria's Secret

Victoria’s Secret was slow to adjust to a shift from padded and push-up bras toward bralettes and sports bras, missing out on a major fashion trend. 

More body-positive underwear brands such as Aerie, ThirdLove, and Lively cropped up, taking making share.

Aerie
Aerie.

Victoria’s Secret was accused of failing to adapt to the times.

Between 2016 and 2018, its market share in the US dropped from 33% to 24%. Some shoppers complained that the quality of its underwear had slipped.

Victoria's Secret

Source: Business Insider

One of its biggest assets, teen-centric brand Pink, also began to struggle. Sales slipped, and it resorted to heavy discounting to woo shoppers.

PINK

“We believe Pink is on the precipice of collapse,” Jefferies analyst Randal Konik wrote in a note to investors in March 2018, commenting on the level of promotions in store.

Some parents complained that Pink was being brought down by Victoria’s Secret’s over-sexualized ads.

Its annual fashion show drew criticism for being outdated, and viewership slipped. In November 2018 Razek sent the internet into a frenzy after he made controversial comments about transgender and plus-size models.

Victoria's Secret

Razek said in an interview with Vogue that he didn’t think the show should feature “transsexuals” because the show is a ‘fantasy.” “It’s a 42-minute entertainment special. That’s what it is,” he said in the interview.

victoria's secret ed razek
Ed Razek speaks to the 2018 Victoria’s Secret runway models backstage during the 2018 Victoria’s Secret Fashion Show at Pier 94 on November 8, 2018 in New York City.

Razek made a formal apology online but some of his critics called for him to step down. 

Read more: People slammed Victoria’s Secret after its marketing chief made controversial comments about transgender models, but he didn’t resign. This could be why, according to former executives.

Less than a week after Razek’s comments went viral, Singer resigned.

Jan Singer

Source: Business Insider

Singer was replaced by John Mehas, who took over the role at the start of 2019.

Victoria's Secret runway show 2018

Mehas had his work cut out for him. Same-store sales at Victoria’s Secret were down 3% in 2018, and was gradually losing market share to new companies. 

Plus, he had angry shareholders to deal with. In March 2019, activist shareholder Barington Capital sent a letter to Wexner, laying out recommendations to improve growth at Victoria’s Secret in order to “unlock substantial value.”

In the letter, Barington’s CEO, James A. Mitarotonda, called out the company’s brand image as being “outdated.”

“Victoria’s Secret’s brand image is starting to appear to many as being outdated and even a bit ‘tone deaf’ by failing to be aligned with women’s evolving attitudes towards beauty, diversity, and inclusion,” he wrote. 

Read more: An activist shareholder is urging Victoria’s Secret parent to update ‘tone-deaf’ brand image to boost sales

Barington called out the lack of diversity in its board of directors as being an issue for the brand. At the time, of the 11 board members, nine were men.

Les Wexner
Wexner and his wife Abigail both sit on the board of directors.

It seems Victoria’s Secret took this criticism to heart. After acknowledging the letter in a statement, it appointed two new female board directors — Sarah E. Nash and Anne Sheehan — and made steps to address the comments about the brand image being outdated. 

It hired a more body-inclusive model.

Barbara Palvin

While she is not a plus-size model, fans praised the company for its decision to take on Hungarian model Barbara Palvin as one of its newest Angels.

Instagrammers celebrated a post starring Palvin for being more body-inclusive, as they perceived her to be curvier than some of the brand’s other models.

“This model actually looks healthy..& I’m loving it!” one Instagram user wrote.

“At last! A real human body,” another said.

It also hired its first openly transgender model.

Valentina Sampaio

Brazilian transgender model Valentina Sampaio, shared a photograph of herself on Instagram in August tagging the Victoria’s Secret Pink brand along with the hashtags: “campaign,” “vspink,” and “diversity.”A day later, she shared a video of herself with the caption “Never stop dreaming.”

Her agent later confirmed that she had signed a contract with Victoria’s Secret.

The same day, Wexner announced that Razek would be resigning in the middle of August in a memo sent out to employees.

leslie wexner ed razek
Les Wexner and Ed Razek pose backstage at the 2016 Fragrance Foundation Awards presented by Hearst Magazines – Show on June 7, 2016 in New York City.

Source: Business Insider

And on November 21, the company confirmed that it had officially canceled its runway fashion show that year.

VS fashion show

During a call with analysts after reporting its third-quarter earnings results, L Brands CFO Stuart Burgdoerfer responded to a question about whether the fashion show would run this holiday season. 

“We will be communicating to customers, but nothing similar in magnitude to the fashion show,” he said. 

Wexner previously told employees in May that Victoria’s Secret was “rethinking” the show. And Victoria’s Secret model Shanina Shaik — who has walked in several of its fashion shows — told The Daily Telegraph in Australia in July 2019 that the annual show was off this year. 

While these were potentially positive changes, the brand found itself caught up in a new challenge in the summer of 2019: its CEO and the company being linked to convicted sex offender Jeffrey Epstein.

Epstein/Wexner
Waxner and Epstein

Epstein managed Wexner’s money for several years, and former company executives told the Wall Street Journal that he tried to meddle in Victoria’s Secret’s business, offering input on which women should be models.

Some of Epstein’s victims came forward saying that he used his connection to Victoria’s Secret to coerce them into sexual acts.

L Brands’ board of directors announced that it had hired an outside law firm to review its relationship with Epstein. In September, Wexner addressed his ties to Epstein at L Brands’ investor meeting.

“At some point in your life we are all betrayed by friends,” Wexner said. “Being taken advantage of by someone who was so sick, so cunning, so depraved, is something that I’m embarrassed I was even close to. But that is in the past.”

Read more: Former employees reveal what the billionaire head of Victoria’s Secret is like as a boss as he faces backlash over his ties to Jeffrey Epstein

In February 2020, the company announced that Wexner would be stepping down as chairman and CEO of L Brands but would stay on as chairman emeritus and sit on the board of directors. At the same time, it announced that it was selling a 55% stake in Victoria’s Secret to private equity firm Sycamore Partners.

Les Wexner painting

In a statement to the press announcing the news, Wexner said that Sycamore has “deep experience in the retail industry and a superior track record of success,” and that it “will bring a fresh perspective and greater focus to the business.”

 

In March 2020, the coronavirus pandemic swept across the US and Victoria’s Secret was forced to shutter its stores.

Victoria's Secret

At the end of April 2020, Sycamore filed a lawsuit to back out of the deal, alleging that Victoria’s Secret’s actions taken during the pandemic to close stores, cut back on new inventory, and not pay rent for the month of April were in violation of the agreement that the two parties had made in February.

L Brands immediately issued a statement saying that a termination of the agreement is “invalid,” and that it would “vigorously defend” the lawsuit and “pursue all legal remedies to enforce its contractual rights.”

On May 4, 2020, L Brands announced that the deal with Sycamore had officially fallen apart.

Victoria's Secret

L Brands said that it had come to a “mutual agreement” with Sycamore to “terminate” the deal.

The company also said that it had reshuffled its management team and would focus on “implementing significant cost reduction actions and performance improvements at Victoria’s Secret.”

This included permanently closing as many as 250 Victoria’s Secret and Pink stores in the US and Canada in 2020.

 

 

In the second half of 2020, the brand started to recover, boosted by more sales online.

Victoria's Secret

Jefferies analysts described Victoria’s Secret’s progress as “admirable,” after it reported strong fourth-quarter results in early 2021. 

Bloomberg later reported that L Brands had resumed discussions to sell the brand once more and was seeking a much higher valuation, in the region of $3 billion.

But in May, L Brands put an end to speculation and said that it was no longer looking for a buyer and would split the company in two and spin-off Victoria’s Secret to become a standalone company.

 

 

 

Since then, it has been working hard to execute a turnaround under new leadership.

Victoria's Secret

Read more: Victoria’s Secret is experiencing a major comeback after years of declining sales — and Wall Street is salivating

It has also taken steps to overhaul the brand image. Most recently, swapping its Angels for a new group of activists and entrepreneurial women to be the face of the brand.

Priyanka Chopra Jonas
Priyanka Chopra Jonas.

Read the original article on Business Insider

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