Around the United States retailers are announcing store closings after the holiday season. Is this a sign of a shifting economy? People are purchasing more items online than ever before. Or is this a sign of a economic downturn? Store closing lead to layoffs and online retailers will not be adding jobs to balance with the layoffs.
Macy's
Comparable store sales for November and December were down 2.1%.
Macy's has announced the closing of 68 stores which will result in over 10,000 job losses as the retailer consolidates operations. After the stores closings Macy's will still have around 660 stores open in the United States.
Sears/Kmart
Comparable store sales in November and December were down between 12 and 13 percent.
The parent company, Sears Holding, announced it will be closing 108 Kmart and 42 Sears stores in 40 states. Additionally, Sears Holding has announce plans to sell the Craftsman tool brand to Stanley-Black&Decker for about $900 million.
The Limited
The Limited announced it was closing about 250 stores nationwide. It is anticipated that the retailer will make a bankruptcy filing soon.
And Many More Retailers
Other retailers like Aeropostale, American Eagle, Chicos, Finish Line, Men's Wearhouse, and The Children's Place have also announced plans to close stores.
Economic Impact
As 2016 ended retail sales were said to be choppy. Overall retail sales according to credit card spending rose about 4% with the online retailer Amazon winning even a greater share of the overall market.
With online retailers like Amazon picking up more sales, mall traffic around the country was down and this trend may continue through 2017. This combined with the announce store closings may result in mall closings too.
The retail job losses due to store closings, reduced mall traffic, and the continued shift toward online sales does not bode well for retailers in 2017. Retailers will need to adapt to the changing economy to survive.
2017 could be the year retailers re-invent themselves. I definitely look for some innovation coming from a few retailers this year as they revitalize their industry. But the effect of the store closings and job losses is likely to put a drag on the economy in the short term.
Sources and Full Articles
Macy's is closing 68 stores, cutting 10,000 jobs, CNN, 4 January 2017
Is your local Sears or Kmart among 150 stores to be axed? See the list, USA Today, 5 January 2017
The Limited closing stores, includes Park City location, Central Penn Business Journal, 5 January 2017
Retail wreckage: Here are the numbers moving retail stocks Thursday, CNBC, 5 January 2016
A giant wave of store closures is about to hit the US, Business Insider, 31 December 2016
Retailers Face 2017 'Reckoning,' More 'Sad Malls' As Amazon Keeps Booming, Investor's Business Daily, 29 December 2016
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