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‘Retail Apocalypse’ Continues: Forever 21 Files For Bankruptcy, 30,000 Jobs At Risk

September 30, 2019

‘Retail Apocalypse’ Continues: Forever 21 Files For Bankruptcy, 30,000 Jobs At Risk

Following reports earlier this month that a bankruptcy for the fast-fashion pioneer was imminent, Forever 21 filed for Chapter 11 protection in Delaware Sunday night, becoming the latest brick-and-mortar retailer to succumb to the Amazon-driven ‘retail apocalypse’, Bloomberg reports.

In addition to the competition from e-commerce retailers, BBG said Forever 21 struggled with high rents and heavy competition from other fast-fashion rivals (like H&M and Zara).

Court papers show Forever 21 has estimated liabilities (on a consolidated basis) of between $1 billion and $10 billion. Thanks to Chapter 11 protection, Forever 21 will continue operating as it works out a plan to pay back all of its creditors. 

Part of that plan, again, according to the filings, will likely involve closing as many as 350 of its more than 800 stores around the world. Most of the closures will focus on Asia and Europe: The company has earlier announced plans to shutter all 14 of its Japanese stores. Meanwhile, its operations in Mexico and Latin America will continue, according to Reuters.

This means that nearly half of the chain’s 30,000 employees could lose their jobs. 

Even before the Forever 21 bankruptcy, the ~11,000 announced and completed store closures in the US were already on track to exceed to the totals from the past few years. One research shop projects annual closures in 2019 to hit 12,000 by year end.

Analysts at Goldman Sachs estimate that $7.5 billion of ‘sales opportunity’ will arise from store closures in 2019 as liquidation sales pull some demand forward.

Meanwhile, Goldman believes the shift to e-commerce will continue: “We believe e-commerce growth will likely accelerate over the course of the second half as a record number of retail store closures, initiatives around fulfillment such as Amazon’s $800 million investment in same-day delivery and Etsy’s move to free shipping…will drive more consumers to shift purchases online.”

 …click on the above link to read the rest of the article…

The Retail Apocalypse Picks Up Speed As Sears, JCPenney, Brookstone And Mattress Firm Spiral Toward Bankruptcy

October 3, 2018

The Retail Apocalypse Picks Up Speed As Sears, JCPenney, Brookstone And Mattress Firm Spiral Toward Bankruptcy

Over 20 major retailers have filed for bankruptcy since the beginning of last year, and in 2018 we may break the all-time record for annual store closings that was established just last year.  We are in the midst of the worst retail apocalypse in American history, and it appears to be picking up speed as retail giants such as Sears, JCPenney, Brookstone and Mattress Firm spiral toward bankruptcy.  We live at a time when the middle class is being systematically destroyed, and so the truth is that U.S. consumers simply do not have as much discretionary income as they once did.  Many large retailers believed that things would eventually turn around, and they have been fighting very hard to survive, but now time has run out for quite a few of them.

Mattress Firm

Everyone knew that Mattress Firm was in deep trouble, but it still surprised many of us when it was announced that they are officially planning to file for bankruptcy.  The following comes from Reuters…

Mattress Firm Inc, the largest U.S. mattress retailer, is preparing to file for bankruptcy protection as soon as this week, as it seeks to exit costly store leases and shore up its business, people familiar with the matter said on Tuesday.

At this moment Mattress Firm has approximately 3,000 brick-and-mortar locations, and as those stores close down those abandoned buildings are going to be giant eyesores on street corners all over America.

Brookstone

When I was a kid back in the 1980s, it seemed like Brookstone had an outlet in every mall I visited.  But now Brookstone has filed for bankruptcy, and all remaining mall stores will be shut down…

…click on the above link to read the rest of the article…

77 Million Square Feet Of Retail Space And Counting – America’s Retail Apocalypse Is Spiraling Out Of Control In 2018

May 22, 2018

77 Million Square Feet Of Retail Space And Counting – America’s Retail Apocalypse Is Spiraling Out Of Control In 2018

In 2017 we absolutely shattered the all-time record for retail store closings in a single year, and this year it looks like we are going to shatter the record once again.  In fact, there are some that are projecting that up to 9,000 retail storescould close by the time that we get to the end of this calendar year.  Already, the amount of retail space that has shut down is simply jaw-dropping.  If you total up all of the retail store closings that have been announced so far in 2018, it accounts for 77 million square feet of retail space.  Let that number sink in for a bit.  Many shopping centers and strip malls around the country already have a post-apocalyptic feel to them, and more “space available” signs are going up with each passing day.  And in case you are tempted to think that I am making this figure up, here it is straight from Bloomberg…

At last count, U.S. store closures announced this year reached a staggering 77 million square feet, according to data on national and regional chains compiled by CoStar Group Inc. That means retailers are well on their way to surpassing the record 105 million square feet announced for closure in all of 2017.

In the end, we could shatter the all-time record that was established just last year by 20 or 30 million square feet.

At moments such as this, the phrase “retail apocalypse” doesn’t really seem to fit the gravity of what is actually taking place.

And unfortunately for the retail industry, it doesn’t appear that this crisis is going to end any time soon.  Here is more from Bloomberg…

…click on the above link to read the rest of the article…

It’s Over for Sears Canada

October 11, 2017

It’s Over for Sears Canada

Brick and mortar meltdown.

Sears Canada hired the same leading bankruptcy advisory firm on June 12 that had represented Target Canada in its insolvency proceedings. Ten days later, it filed for bankruptcy protection to restructure its capital and its operations, shutter dozens of it 225 stores and lay off nearly 3,000 employees, but planned to continue operating. Today it said that the restructuring efforts failed, and that it would seek court approval to liquidate, shutting all its remaining stores and laying off its remaining 12,000 employees.

Retailers are notoriously difficult to restructure. Once they’re this deep in trouble, after years of losses, they own few assets and are burdened with debts, as everything has been sold or pledged to creditors. Their suppliers, who’ve been burned too many times, are getting skittish. Lenders are getting desperate. And acquirers can be impossible to find. Most retailer bankruptcies start out as restructurings but end as liquidations.

To stay alive while losing money for years, Sears Canada has sold off most of its real estate holdings, and the most valuable assets are already gone. What’s left are C$1.1 billion ($880 million) in liabilities.

“The company deeply regrets this pending outcome and the resulting loss of jobs and store closures,” the company said in the statement.

Pending court approval to begin the liquidation process, Sears Canada said that it would kick off liquidation sales at its stores as soon as October 19 and continue through the holiday selling period.

In the bankruptcy filing in June, the company spoke of its “reinvention” and its “brand reinvention,” how it “rebooted its customer experience and service standards,” and how its “newly designed site built in-house by a new technology team” and some other factors would make this restructuring work.

…above link to read the rest of the article…

It’s A Retail Apocalypse: Sears, Macy’s And The Limited Are All Closing Stores

January 11, 2017

It’s A Retail Apocalypse: Sears, Macy’s And The Limited Are All Closing Stores

retail-apocalypse-public-domainIt has only been two weeks since Christmas, and already we are witnessing a stunning bloodbath of store closings.  Macy’s shocked the retail industry by announcing that they will be closing about 100 stores.  The downward spiral of Sears hit another landmark when it was announced that another 150 Sears and Kmart stores would be shutting down.  And we have just learned that The Limited is immediately closing all stores nationwide.  If the U.S. economy is doing just fine, then why are we experiencing such a retail apocalypse?  All over America, vast shopping malls that were once buzzing with eager consumers now resemble mausoleums.  We have never seen anything quite like this in our entire history, and nobody is quite sure what is going to happen next.

Not too long ago I walked into a Macy’s, and it was eerily quiet.  I stumbled around the men’s department looking for something to buy, but I was deeply disappointed in what was being offered.  After some time had passed, an employee finally noticed me and came over to help, but they didn’t have anything that I was looking for.

And it is a sad thing, because over the past several years when I have gone into Macy’s looking to spend money, most of the time I have come out of there without spending a penny.  Macy’s has made some very bad decisions recently, and I am hoping that they can still turn things around.  But for the moment, they are closing stores and cutting jobs.  The following comes from the New York Times…

…click on the above link to read the rest of the article…

‘Footprint Rationalization’: Sears adds to Woes of Canada’s Malls

January 26, 2016

‘Footprint Rationalization’: Sears adds to Woes of Canada’s Malls

The industry spirals into turmoil.

After bouts of store closings that started in 2013, Sears Canada has about 95 department stores, 10 outlet stores, and 40 home stores left. Now, according to the Globe and Mail, it will close even more stores.

It’s been tough for brick-and-mortar retailers in Canada. The collapse of the price of oil and the brutal drubbing administered to the tar-sands sector, the high-cost oil producer globally, haven’t helped. The overall economy is uneasy. And the migration to online shopping is unstoppable, a phenomenon that is also wreaking havoc among brick-and-mortar retailers in the US.

How tough is it in Canada’s retail land? Some salient recent examples:

Target, after only a little over two years in Canada, shuttered its 133 stores and was gone by April 2015, an episode that cost it $7 billion.

Best Buy closed 66 of its Future Shop stores in March 2015 and converted the remaining 65 to struggling Best Buy stores.

Then there’s Blacks, a Canadian camera shop chain that also sold cellphones and other things. It and its 113 stores were acquired by Canadian PE firm ReichmannHauer Capital Partners in 2007, when PE firms piled into brick-and-mortar retail. RHCP was smart enough to sell it in 2009 to telecom operator Telus, who shuttered the remaining stores in August 2015.

Sony closed all of its 14 stores in Canada in early 2015.

Mexx Canada, a Netherlands-based retailer, liquidated all its 95 stores in Canada in early 2015.

Reitmans, a Canadian retailer specializing in women’s clothing under a number of different store brands, announced in November 2014 that it would close 107 Smart Set stores.

A spate of US retailers, including Gap and Staples, have announced that they would close stores in “North America,” without specifying how many of their stores in Canada would be closed.

In terms of population, Canada is smaller than California. So this has an impact.

…click on the above link to read the rest of the article…

CHRISTMAS IN OCTOBER – DESPERATE MEASURES « The Burning Platform

October 26, 2014

CHRISTMAS IN OCTOBER – DESPERATE MEASURES « The Burning Platform.

The desperation of retailers grows by the day. I head to Wal-Mart and Giant in Harleysville every Sunday morning at 7:00 am. to do my weekly grocery shopping. I go to Wal-Mart at opening to avoid the freaks we see weekly on the People of Wal-Mart post. The workers at Wal-Mart are only a small step above the customers. They can barely communicate, rarely look you in the eye, and generally act like they are prisoners in an asylum.

I’m in winter/bad times ahead prep mode. I had a load of fire wood delivered yesterday which I wheelbarrowed to the back yard and stacked with my already decent sized stack. Last week I took an empty propane canister back to Wal-Mart to replace it with a full canister. That would give me three full propane tanks. I left the empty tank outside next to the propane cage and went in to pay. The old lady cashier with the gravelly smoker voice told me she would call for someone to get me a new tank.

I went over the cage and patiently waited for a Wal-Mart drone to come out, unlock the propane cage and give me a full tank. Two minutes, five minutes, and eventually ten minutes go by with no one coming out to help me. The cashier pokes her head out the door and shrugs her shoulders and says no one is responding to her calls. What a well oiled machine they have at Wal-Mart. Eventually the old lady abandoned her cashier post and in a painstakingly slow manner proceeded to unlock one bin after another until she found a full tank. I’m sure a line of unhappy customers were piling up at the only register in the garden center while she spent ten minutes getting me my propane tank.

…click on the above link to read the rest of the article…

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