After retail’s big existential reckoning of 2017, when a wave of store closures swept the US, it looked like things might calm down. The next year, the number of closings fell, even if more stores were still shuttering than opening.
But in 2019, US store closures picked up again, spiking to their highest level in years, according to data from Coresight Research, a retail and technology research and advisory firm. As of Dec. 13, US retailers announced 9,302 store closings, more than even the roughly 8,000 stores that closed in 2017.
Comparing the number of openings and closings, 2019 saw 4,930 more stores close than open, also representing a jump from the net closings of 2018 (1,959) and 2017 (2,970).
Much of the rise in closures this year is the result of one retailer in particular. In February, shoe seller Payless said it would shut down all 2,100 of its stores in the US. The company had only just emerged from bankruptcy in late 2017 and was already facing another, a result of years of aggressive expansion that left it too reliant on brick-and-mortar stores, a huge debt load, and increased competition from channels such as off-price outlets. The Wall Street Journal noted it was “likely to be the largest-ever retailer liquidation by number of stores.”
But there have been other retailers struggling, too. In January, children’s clothing retailer Gymboree said it would close all stores as it also announced its second bankruptcy since 2017. Ascena Retail Group, which owns women’s clothing retailers including Ann Taylor and Lane Bryant, announced in May it would close all Dress Barn locations. Even companies with a small network of stores, such as luxury retailer Barneys, are closing their spaces.
While all retailers face their own individual challenges, those closing the most stores did share some in common. Chief among them was that they didn’t adapt to ecommerce. Several of the chains remained dependent on physical stores, often in dying suburban malls, even as more consumers shopped online, leaving them burdened with large swaths of unproductive space. They didn’t change their offerings fast enough to suit shifting consumer tastes, sending customers to competitors both new and established. In some cases, such as Payless and Gymboree, the companies were also saddled with debt from private-equity buyouts. Even as the US enjoyed a long run of economic growth, the pressure kept mounting, and finally became too much for these companies to bear in 2019.
But just because companies close stores doesn’t mean they can’t open them, too. Gap, for instance, said it would close 154 stores this year, but it’s also opening in 115 locations. Foot Locker is shuttering 108 shops and opening 40. Retail is in a constant shuffle as companies ditch underperforming areas in search of new opportunities.
Some retailers saw a lot of opportunity to expand. That seemed particularly true of chains serving budget-conscious consumers. If a company had “dollar” in its name, there’s a good chance it opened stores this year.
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