If there was a theme song for retail in 2017, it would be “Another One Bites the Dust” by Queen.
While there have always been store closures in retail, they’ve been coming fast and furious for the past few years. It has left enclosed shopping centers especially vulnerable. Malls have been left scrambling to fill tenant vacancies or struggling to reinvent themselves entirely. Low occupancy rates, slow sales and declining traffic are putting the squeeze on malls, and could put a third of them out of business over the next 10 years, according to Green Street Advisors.
Here’s a look at some of the retail trends that have hit area malls:
Once considered unsinkable, traditional department stores are falling like dominoes. Macy’s closed stores at Eastern Hills and McKinley malls last year. Sears closed at Boulevard Mall and Walden Galleria in March. Together, they’ve left hundreds of thousands of square feet of cavernous retail space to fill in Erie County, in highly visible locations. A JCPenney store in Dunkirk is another of 138 locations in the process of closing right now.
Malls depend on anchor stores to attract customers and drive traffic. But when the internet came along, it proved to be everything department stores are not: low priced, deeply discounted and full of deep, varied and constantly changing inventory.
More closures are expected – 800 of them to be exact. Research firm Green Street Advisors estimates that Sears would have to close half its stores in order to survive and regain its previous profitability. JCPenney would have to close a third, Nordstrom would have to close a quarter and Macy’s would have to close 9 percent of its stores, according to a Green Street report.
Once-favorite Delia’s declared bankruptcy in 2014, closed all its stores and became an online-only retailer in 2015. Deb Shops did the same, at almost the same time. Wet Seal filed for bankruptcy in 2015 and threw in the towel in January.
Teen apparel makers have been hit hard. In a world where teenagers live by smartphones, losses to internet competition have accelerated. But there are other reasons retailers catering to those under age 25 are dropping like flies.
American Eagle, Aeropostale, Abercrombie & Fitch and Hollister all have seen brand decline. Each has had leadership and financial challenges, but most of all, they’ve suffered by being too similar and too slow to change. They, along with PacSun, 5-7-9 and Rue21 have had their lunch eaten by fast-fashion retailer H&M, which sells affordable clothes and accessories that are highly trendy and always changing. Every mall in the Buffalo Niagara market has seen at least one of these teen stores close over the past few years.
Closing all stores
If you can’t beat ’em, join ’em.
That was Bebe’s strategy when it came to online retailing. The company announced in April it would close its 168 stores and convert to online-only retail. It closed its Galleria store in 2014 but its Fashion Outlets store will be gone by the end of the month.
The Limited closed all of its stores, as well, but e-commerce appears to have been a hasty afterthought. For the past 10 years, the Limited had lost sales due to increased competition in women’s apparel, changing fashion tastes and the shift toward online shopping. In January, the more than 50-year-old store announced it would close its 250 stores, including those at Boulevard Mall and Walden Galleria, and go online only. But The Limited couldn’t turn things around online, either. It filed Chapter 11 bankruptcy and has since “temporarily” ceased online operations, according to its website.
Two years after filing bankruptcy, struggling teen brand Wet Seal announced it would close all 171 of its brick-and-mortar stores, including ones at McKinley Mall and Walden Galleria. Its website says an online store is in the works. Mall children’s footwear store Stride Rite has closed more than 100 stores since 2014 with a plan to reinvest in e-commerce.
One thing that has become painfully clear: The country has more brick-and-mortar retail space than it needs. That was the case before online shopping began to dampen foot traffic, but even more so now as struggling retailers fight to right-size their footprints.
Aside from the Sears, Macy’s and JCPenney department store closings, there have been a slew of others. Radio Shack, a casualty of the technological times, filed bankruptcy in March and closed 552 stores. Mall-based Finish Line closed 150 underperforming stores last year, followed by another 20 in March. Ascena, parent company of Ann Taylor, saw a 67 percent drop in its stock over the past year, prompting it to trim mall stores, including one at Walden Galleria.
California-based PacSun, a teen mall fashion retailer, has been losing money since 2008. It has closed more than 100 stores, including locations at Boulevard and McKinley malls. Since cutting back its footprint, it has emerged from bankruptcy and seen an increase in online sales. Rue21 recently announced it would close 400 stores across the country, including one at Fashion Outlets and three others locally. The company said it was closing unprofitable stores to become a “more cost-efficient operator” and to focus on profitable locations.