J. Crew is following suit as more and more retailers downsize their footprint. In an unexpected move, the retailer announced late Tuesday that it plans to shut down 39 stores by the end of January, or for those keeping track, about 6% of its locations. This is more than double what the company expected to close in the first place.
Reportedly, the company has lost $161 million in the first nine months of 2017, and its loss for the most recent quarter more than doubled. In part these losses are due to the company’s transformation plan, including severance payments to 250 front office employees who were laid off.
The key to this transformation plan is for the specialty retailer to become a “digital-first” business to keep up with what’s becoming known as the Amazon-era. More and more companies are ditching the traditional brick-and-mortar model in favor of e-commerce.
While there might always be a place for traditional brick-and-mortar retailers, it seems the online model pioneered by Amazon is just becoming too strong.
According to Fung Global Retail & Technology, a retail think tank, more stores have closed this year than any year on record. The number comes out to roughly 6,700 closures through the end of October. The previous high was 6,100, which was set in 2008 during the Great Recession.