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Another one bites the dust: 11 retailers closing stores this year

It's hard to pinpoint what has led to the so-called "retail apocalypse."

The most obvious reason is consumers flocking to online shopping and staying away from brick-and-mortar stores, with powerhouses like Amazon and Walmart offering competitive pricing and fast shipping.

Making matters worse, malls and chains over-expanded during the boom years, meaning retail was overbuilt even in the best of times. Consumers also have changed their spending habits, favoring experiences over things. Many chains also have been saddled with debt from leveraged buyouts by private equity firms, helping to drag some, like Bon-Ton and Toys R Us, into bankruptcy.

Bottom line: many chains have more stores than they need. So they're getting rid of many of them.

As the retail industry right-sizes itself for this next step in its revolution, here is a look at the companies closing the most stores this year.

Sears and Kmart. It's hard to believe there are only two Sears stores left in the Buffalo Niagara market, but that is the case now that the department store has closed locations in the Boulevard Mall and Walden Galleria. Another location at the former Summit Park Mall will close in August. Kmart has just four stores left.

Sears Holdings was already struggling when it acquired the troubled Kmart in 2004. The company has been on death watch almost since then. Its stock price has reflected its woes, plummeting from its peak of $195.18 per share in 2007 to $2.81 last week.

Sears' latest round of 63 closures comes on the heels of worse-than-expected first-quarter earnings. The company reported a net loss of $424 million, with revenue dropping more than 30 percent to $2.9 billion and same store sales down by 13 percent.

Total store count: 365 Kmart stores, 529 Sears stores

Closures announced for 2018: 103

Percentage of stores closing: 12 percent

Buffalo-area locations: Sears has two, at Eastern Hills Mall and McKinley Mall. Kmart has four, in West Seneca, Niagara Falls, Batavia and on Hertel Avenue.

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Ascena. Shoppers might never have heard of Ascena, but they've certainly heard of its brands, which include Ann Taylor, Loft, DressBarn, Lane Bryant, Maurices and Justice. Ascena's debt load and its troubles increased when it acquired Ann Taylor and Loft in 2015, but its other brands have struggled plenty on their own. The company has been criticized for failing to adapt to the digital era. It has 1,096 more stores than Gap, but has less than half of Gap's revenue. And even though it closed roughly 90 legacy stores from 2015 to 2017, revenue per store actually decreased during that same time frame.

Total store count: 4,800 stores in the United States, Canada and Puerto Rico

Closures announced for 2018: 267

Percentage of stores closing: 5 percent

Buffalo-area locations: One Ann Taylor at the Fashion Outlets; three Lofts in Walden Galleria, Boulevard Mall and Orchard Park; four DressBarns in Hamburg, Cheektowaga, Amherst and Clarence; three Lane Bryants in Amherst, Hamburg and in Walden Galleria; seven Maurices in Amherst, Orchard Park, Niagara Falls, Lockport, Springville, Batavia and Dunkirk; three Justices at Boulevard Mall, Walden Galleria and the Fashion Outlets.

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Lord & Taylor. The high-end women's apparel retailer announced last week  it would close up to 10 stores, including its New York City flagship, by the end of next year to reduce costs, improve performance and regain profitability.  Lord & Taylor's parent Hudson's Bay, which owns Saks Fifth Avenue, Hudson's Bay and Saks OFF 5th; has seen declining sales. It posted worse-than-expected first quarter results, with a 0.7 percent drop in comparable store sales and pushing share prices down 3.6 percent.

The company has been trying to gain a foothold in the digital world. It recently sold its shopping website Gilt and partnered with Walmart to sell Lord & Taylor merchandise on the Walmart website.

Total store count: 50

Closures announced through 2019: up to 10

Percentage of stores closing: up to 20 percent

Buffalo area locations: One at Walden Galleria

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Signet Jewelers. The owner of such brands as Kay, Zales, Jared, Piercing Pagoda; Signet is one of the largest diamond retailers in the world. But with the majority of its stores located in enclosed malls, its stores have been affected by sharp drops in foot traffic. After a disappointing first quarter, it said 2018 will be a year of transition, outlining a three-year transformation plan that included cost cutting, new ecommerce strategies and innovation at the store level. The store closures are part of the cost-cutting plan.

Total store count: 2,900

Closures announced for 2018: 200

Percentage of stores closing: 7 percent

Buffalo-area locations: There are eight Kay Jeweler locations, three Zales stores, two Jareds and seven Piercing Pagodas.

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Mattress Firm. Acquired by Steinhoff International Holdings in 2016,  the 200 closures scheduled for this year will be offset by another 75 store openings. Steinhoff's stock price fell by more than 80 percent in December after the company announced it had discovered "accounting irregularities" just ahead of publishing its year-end financial statement. Working capital dried up in the wake of the scandal, despite a change in CEO. Mattress Firm has long been criticized for having too many stores, especially at a time when online competitors such as Casper.com are making such a big splash with consumers.

Total store count: 3,285

Closures announced for 2018: 200

Percentage of stores closing: 6 percent

Buffalo-area locations: There are seven Mattress Firms, in Town of Tonawanda, Depew, McKinley Mall, Hamburg, Lockport and Batavia.

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GNC. The vitamin chain has more than 3,000 locations in the United States and Canada, as well as franchised stores and shops within Rite-Aid stores. But after years of reports that vitamins may not be as helpful as scientists once thought, the entire industry is suffering. Profitability at GNC slipped in the first quarter. Consolidated revenue dropped by $47.4 million year over year, and sales in the U.S. and Canada fell 4.5 percent.

Total store count: 5,860 in the U.S. and Canada

Closures announced for 2018: 200

Percentage of stores closing: 3 percent

Buffalo-area locations: There are 13 stand-alone GNC stores, plus 46 store-within-a-store locations at local Rite-Aids.

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Claire's. The mall-based teen jewelry store filed for bankruptcy in March in order to reduce the bulk of its roughly $2 billion in debt. The debt can be traced back to the chain's 2007 acquisition by private equity firm Apollo management, which bought the company for $3.1 billion in a leveraged buyout. It became even more burdensome as shoppers began migrating online and to fast-fashion retailers such as H&M and Forever 21. Its store at McKinley Mall was on the latest list of closures.

Total store count: 7,500

Closures announced for 2018: 132

Percentage of stores closing: 2 percent

Buffalo-area locations: Four, in Walden Galleria, Boulevard Mall, Eastern Hills Mall and Fashion Outlets.

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Foot Locker. For its troubles, the sneaker store has cited the same "retail apocalypse" conditions affecting other struggling mall stores: falling foot traffic, consumer migration online and lost market share to Amazon. In response, it closed 147 stores last year and will trim 110 under-performing  stores this year. It will offset those closures with 40 new high-profile stores with a hyped-up consumer-focused experience to draw in shoppers.

"The disruption that has characterized the retail industry recently is not going away," Richard Johnson, the company's CEO, told investors during its fourth-quarter earnings call. "Consumers want experiences, they want cool products, and they want it all — fast."

Total store count: 1,015

Closures announced for 2018: 110

Percentage of stores closing: 11 percent

Buffalo-area locations: There are three locations at Walden Galleria, McKinley Mall and the Fashion Outlets.

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The Children's Place. If you can't beat 'em, join 'em. The children's apparel retailer said it will close hundreds of brick-and-mortar locations by 2020 as it continues to move its business model away from the physical retail space and into e-commerce. The effort to trim back its store count began in 2013. It ended the first quarter with 1,002 stores.

Total store count: 960

Closures announced for 2018: 100

Percentage of stores closing: 10 percent

Buffalo-area locations: There are four locations, at Boulevard Mall, Walden Galleria, Fashion Outlets and Quaker Crossing in Orchard Park.

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Macy's: Once a shining star of the retail world, the department store closed 70 locations last year and has closed 156 stores since 2008. Though it had a very good first quarter, it still plans to close about 11 stores this year, and has said it will close another 19 stores as their leases expire. It's all part of a plan announced in 2016 to close 100 stores over time, which represented about 15 percent of the company's portfolio at the time.

Facing a sharp drop in mall foot traffic, and changing consumer tastes that have shifted away from traditional department stores, Macy's sales have suffered. But it was one of the first department stores to adapt to omni-channel retail, giving it a leg up its competitors. It has experimented with store-within-a-store pop-ups, store-exclusive merchandise, a revamped loyalty program, and has bolstered its off-price Macy's Backstage concept.

It has closed anchors at McKinley and Eastern Hills Mall, as well as a home store at McKinley Mall and a men's store at Boulevard Mall.

Total store count: 854

Closures announced for 2018: 11

Percentage of store closings: 1 percent

Buffalo area-locations: Two, at Boulevard Mall and Walden Galleria.

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JC Penney: After closing 139 stores last year, including its Dunkirk store, the stalwart department store has announced just eight closures for 2018. Its first-quarter earnings were worse than expected, with a 4 percent drop in sales and an adjusted loss of $69 million. Due in large part to a $190 billion debt repayment, it ended the quarter with $181 million in cash, down from $363 million for the same quarter last year.

The company has seen success with its Sephora store-within-a-store partnership, and has high hopes for its toy and appliance sales.

Total store count: 860

Closures announced for 2018: 8

Percentage of store closings: 0.93 percent

Buffalo area-locations: Six, at Boulevard Mall, McKinley Mall, Walden Galleria, Eastern Hills Mall, Batavia City Centre and Chautauqua Mall.

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Some retailers are bucking the trend, opening dozens or even hundreds of new stores. One thing most of the companies have in common? They sell discounted or value-priced merchandise.

Dollar General: 900 stores

Aldi: 200 stores

Five Below: 125 stores

Ross Stores: 100 stores

Gap: 90 stores

Walmart: 90 stores

Gander Outdoors: 69

Old Navy: 60

Untuckit: 50

Target: 35

Source: Coresight Research

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