It’s just 10 days into the New Year, and some of the biggest retail brands in the country have announced major store closings due to dismal holiday season sales and the continued shift to online shopping.
One of the biggest announcements came from department store bellwether Macy’s M, who, after reporting a 2.1% drop in comparable sales for November and December and slashing its full-year profit forecast, is closing 63 stores this spring, eliminating 10,000 jobs in the process. Of the total jobs being cut, 3,900 jobs will be at stores being shut down, already part of a plan announced last August to close 100 of its 730 namesake stores. An additional 6,200 jobs will be eliminated due to streamlining and cutting costs.
Fellow department store Sears SHLD, in addition to news that it would sell its iconic Craftsman tool brand to Stanley Black & Decker SWK, announced it would close 109 Kmart stores and 41 of its namesake Sears outlets; the company did not say how many workers would be affected. Sears closed 78 stores last year, and over 200 in 2015.
CVS Health CVS recently outlined its long-term growth strategy, which includes closing 70 stores in the next few months as well as a cost-cutting plan that would bring in $3 billion in savings from 2017 to 2021.
Women’s clothing retailer The Limited, based in New Albany, Ohio, closed all of its brick-and-mortar stores this past weekend, but will continue to operate online only after January 8. The company operated about 250 mall-based stores in 2016, and the closings will affect roughly 4,000 jobs. Over the past several weeks, The Limited started winding down its business, heavily discounting its product up to 70%-80% with signs exclaiming “Everything Must Go!”
Other mall retailers like Aeropostale, American Eagle Outfitters AEO, The Children’s Place PLCE, Chico’s CHS, Finish Line FINL, and Men’s Wearhouse are all expected to close stores this year as well. The first quarter is notoriously hard for retailers, as consumers are recovering from holiday shopping.
In the midst of all this traditional retail chaos looms Amazon AMZN, quietly waiting, ready to strike when the moment is right. In the past, that moment has been books, the Cloud, Internet of Things, movies & television, grocery shopping, drones, and almost everything else. Whether or not it will ever be retail, only Jeff Bezos and his crystal ball have the power to tell us that.
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Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Stanley Black & Decker, Inc. (SWK): Free Stock Analysis Report
American Eagle Outfitters, Inc. (AEO): Free Stock Analysis Report
Chico's FAS, Inc. (CHS): Free Stock Analysis Report
The Finish Line, Inc. (FINL): Free Stock Analysis Report
Children's Place, Inc. (The) (PLCE): Free Stock Analysis Report
CVS Health Corporation (CVS): Free Stock Analysis Report
Macy's Inc (M): Free Stock Analysis Report
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