In April, Payless ShoeSource filed for Chapter 11 bankruptcy protection, and announced plans to close around 400 locations. This news comes about two months after RadioShack filed for Chapter 11 bankruptcy protection for the second time in just over two years. The company has already made plans to close more than 500 locations nationwide, and has yet to announce what it will do with its remaining 1,000 locations. During the 2015 bankruptcy, about 2,000 RadioShack stores closed.
Radioshack and Payless’ bankruptcy announcements are the latest in what has been a disastrous year for retailers and retail employees. Many of the nation’s largest retailers have closed or are in the process of shutting down operations. These retailers are closing a varying number of locations. The major retailers alone that are going bankrupt or restructuring are closing well over 2,000 stores nationwide, often at some of the biggest malls in the country.
American Apparel, The Limited, and others have declared bankruptcy and will disappear this year. Big names such as Kmart, Macy’s, J.C. Penney, and others will each close dozens of stores as they attempt to respond to the changing shopping habits of Americans, who more and more consumers choose to shop online. These are the 22 retailers closing the most stores in 2017.
Many of the companies on this list have long fought an uphill battle — and many would say a losing one — against surging e-commerce companies such as Amazon. Amazon’s revenue reached $136 billion in fiscal 2016, about nine times its revenue a decade ago. It is now, according to the National Retail Federation, the eighth-largest U.S. retailer based on annual sales.
As Amazon and other e-retailers thrive, major, primarily brick-and-mortar retailers have struggled and have been forced to shut down dozens, if not hundreds, of stores each year. In some cases, the closures are part of a major retailer’s restructuring, as many eliminate less profitable locations and work on focusing their operations. Wal-Mart closed over 150 U.S. locations last year, but the company was and remains one of the largest and most profitable retailers in the world.
For other retailers, this year’s store closings are evidence of a dying business. Sears Holdings Corporation, which owns two brands that are closing stores this year — Sears and Kmart — reported net losses in each of its last five fiscal years. J.C. Penney, which will close 140 of its roughly 1,000 U.S. locations in 2017 — with some analysts anticipating more closures announced by the end of the year — has reported net losses in its last seven fiscal years
One of the most foreboding signs of the changing American retail landscape is the fact that mall development in the United States has ground to a halt. Currently, only two shopping malls are being built in the United States, and dozens have closed in recent years. J.C. Penney and Macy’s frequently serve as cornerstone stores — the major department stores that drive foot traffic to American malls. As these stores go out of business, they cause a chain reaction, severely cutting down traffic to the smaller stores commonly found at malls.
In its most recent annual report, Abercrombie & Fitch, which will close 60 locations this year, stated, “We cannot control the loss of an anchor or other significant tenant in a shopping mall in which we have a store … if the popularity of mall shopping continues to decline generally among our customers, our sales may decline, which would impact our gross profits and net income.” Over the past three years, Abercrombie & Fitch’s sales have fallen by more than $1 billion, and profits have declined by almost 85%.
Some of the retailers closing the most stores this year are not downsizing but shuttering their businesses entirely. The five companies at the top of this list have all filed for bankruptcy and announced plans to close all their stores.
To identify the companies closing the most stores, 24/7 Wall St. reviewed major U.S. retailers that have announced store closings for 2017. All listed store closings are based on company announcements that will either take place entirely, or will begin, in 2017. Total store counts are based on company annual reports, when available, or corporate websites, and are U.S. store closures only, unless otherwise specified.
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