Study Predicts Store Closings
It’s common to hear complaints about retailers operating in over-stored environments.
Conversely, there exists a parallel but seemingly opposite universe where alarms
are raised when retail sites are abandoned or otherwise left unoccupied.
A new report from Grant Thornton predicts that the number of store closings
this year will nearly double from 2008 reaching up to 10,000 nationwide. According
to the report, closings last year were centered in consumer electronics, home
furnishings and clothing stores. This year, those same outlets are being joined
by large number of department stores and food/beverage locations. Book stores
are also expected to see a much higher rate on a percentage basis if not in
actual store counts.
Sandra Reese, a principal at Grant Thornton, told the Chicago Sun-Times, “It’s
been amazing to me how, in conversations, everyone from the low-end to the
high-end shopper is cutting back on spending and not spending on lavish purchases.”
Scott Davis, principal at Grant Thornton’s Corporate Advisory and Restructuring
Services, said in a press release, “Although there’s high risk in the retail
industry, now is the time for companies to fine-tune their business and take
advantage of new opportunities.The winners will be the disciplined companies
investing the time, effort and resources to reexamine their strategies and
position themselves for growth.”
Discussion Questions: Are there too many retail store locations? Should there
be real concern in the industry about the high number of vacancy rates? Does
this market provide unique opportunities for retailers to grow their businesses
through strategic real estate acquisitions?
- Avalanche of store closings coming, study says – Chicago Sun-Times
- 10,000 retail store closures expected by year end; industry challenges bring
opportunities, says Grant Thornton LLP – Grant Thornton LLP