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Retail Apocalypse (2016-Present)

retail Amazon Sears Target store chains economy business middle America mall retailers

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#1
Yuli Ban

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For those who want to so eagerly relive the 80s and 90s, I have bad news! The cornerstone of any 80s teen or 90s teen's life— the mall— is going away. I'm surprised we never had a dedicated thread for this. It's a major news story, and I feel we should be discussing it and analyzing it in detail.
 

Who will the 'retail apocalypse' claim in 2018?

From Sears to Toys R Us, the so-called retail "apocalypse" has claimed some of the holiday season's biggest brands. But the slaughter doesn't end when the ball drops, retail analysts say.
The Reaping
Shopping is changing. While many retailers bank on Christmas sales to boost their yearly revenues, brick-and-mortar shops are finding it harder and harder to keep up with online giants like Amazon.
Toys R Us, which filed for bankruptcy protection in the US in September, nearly collapsed in the UK in December.
It brokered a deal in the 11th hour with its creditors, but must still close 26 of its 105 stores in the UK.
Meanwhile in North America, traditional department stores are facing an uphill battle. Stocks in JCPenney have fallen from above $9 (C$11; £7) last December to just above $3.


For those out of the loop...
 
 

Retail apocalypse

The retail apocalypse refers to the closing of a large number of American retail stores beginning in 2016. Over 4,000 physical stores are affected as American consumers shift their purchasing habits due to various factors, including the rise of e-commerce. Major department stores such as J.C. Penney and Macy’s have announced hundreds of store closures, and well-known apparel brands such as J. Crew and Ralph Lauren are unprofitable. Of the 1,200 shopping malls across the US, 50% are expected to close by 2023. The retail apocalypse phenomenon is related to the middle-class squeeze, in which consumers experience a decrease in income while costs increase for education, healthcare, and housing. Bloomberg stated that the cause of the retail apocalypse “isn’t as simple as Amazon.com Inc. taking market share or twenty-somethings spending more on experiences than things. The root cause is that many of these long-standing chains are overloaded with debt—often from leveraged buyouts led by private equity firms.” Forbes has said the media coverage is exaggerated, and the sector is simply evolving.The most productive retailers in the US during the retail apocalypse are the low-cost, “fast-fashion” brands (e.g. Zara and H&M) and dollar stores (e.g. Dollar General and Family Dollar).


One could argue that the roots of the retail apocalypse date back to when megachains like Walmart and JC Penny drove main street mom & pop shops out of business, but that may be beside the point now that even these megachains are closing shop.


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#2
Yuli Ban

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The collapse of brick-and-mortar retail could spiral into a real estate crisis

The collapse of brick-and-mortar retail becomes a real-estate question.
Caught up in the middle of the brick-and-mortar retail meltdown, Macy’s announced wave after wave of store closings. The 100 store closings it announced in August 2016 included Macy’s Men’s store in San Francisco and its store at Stonestown Galleria in San Francisco. Macy’s owned the buildings of both of them. This will bring Macy’s store count in San Francisco from three to just one store.
That’s how bad the meltdown is!
Macy’s is symptomatic for the brick-and-mortar retail sector. There have been thousands of store closings across the US over the past two years. So what will happen to the buildings and malls when big anchor stores are shuttered? Other locations may not be so lucky – if that’s the right word – as the two Macy’s locations in San Francisco.


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#3
Yuli Ban

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The Great Retail Apocalypse of 2017 

From rural strip-malls to Manhattan’s avenues, it has been a disastrous two years for retail.

There have been nine retail bankruptcies in 2017—as many as all of 2016. J.C. Penney, RadioShack, Macy’s, and Sears have each announced more than 100 store closures. Sports Authority has liquidated, and Payless has filed for bankruptcy. Last week, several apparel companies’ stocks hit new multi-year lows, including Lululemon, Urban Outfitters, and American Eagle, and Ralph Lauren announced that it is closing its flagship Polo store on Fifth Avenue, one of several brands to abandon that iconic thoroughfare.
A deep recession might explain an extinction-level event for large retailers. But GDP has been growing for eight straight years, gas prices are low, unemployment is under 5 percent, and the last 18 months have been quietly excellent years for wage growth, particularly for middle- and lower-income Americans.
So, what the heck is going on? The reality is that overall retail spending continues to grow steadily, if a little meagerly. But several trends—including the rise of e-commerce, the over-supply of malls, and the surprising effects of a restaurant renaissance—have conspired to change the face of American shopping.



Here are three explanations for the recent demise of America’s storefronts.

And before anyone says anything, no, this has nothing to do with Trump. No, not Obama either. It's a combination of online shopping, changing demographics, and the cold fact that the aforementioned 80s and 90s kids spurred retailers to build far, far, far too many outlets to begin with decades ago. Essentially overpopulation of business.


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#4
Yuli Ban

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A Major Retail Bankruptcy Could Trigger Recession

Summary

This article reviews the challenges facing physical retail and why it is such a tough business.
Although retailers decline slowly, even profitable companies can suddenly face a liquidity crisis during an economic slowdown.
Despite their difficulties, department stores and other brick-and-mortar behemoths employ a large percentage of U.S. workers.
The bankruptcy of a major retailer could put hundreds of thousands out of work, endanger landlords and vendors, and potentially trigger a recession.



Living in small-town Louisiana, I can safely say that the retail apocalypse can be seen here to some extent. They're lucky that big chains aren't that common around here (besides Walmart; I think there are three in the immediate 15-mile area). Especially Best Buy. I can't think of any other major electronics place in town or any of the surrounding towns.  But even that isn't exactly helping them. Especially if Amazon really does buy Target.


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#5
Yuli Ban

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America's department stores are in deep, deep trouble

Last year was heralded by many analysts as the "retail apocalypse." The term is a bit of a misnomer, since the overall industry is doing okay. But things were really bad for department store chains, which have lost 500,000 jobs since 2001. In 2017 alone, a whole swath of chains including Payless and Toys "R" Us filed for bankruptcy, while major department retailers like Sears, J.C. Penney, and Macy's shuttered around 9,000 stores.
It looks like 2018 could be even worse.
"The number of store closings in the U.S. is expected to jump at least 33 percent to more than 12,000 in 2018, and another 25 major retailers could file for bankruptcy," Business Insider reports, working off an analysis by commercial real-estate firm Cushman & Wakefield.


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#6
Yuli Ban

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17 Retailers on the 2018 Death Watch

The past year has been a bleak one for many retailers. Over 20 retail chains -- including Radio Shack, Toys R Us, and HHGregg -- filed for bankruptcy, and some were liquidated.
Things are not likely to get better in 2018. They may even be worse.
"I think the early part of next year will be pretty bad ... I think it will be tough," Moody's lead retail analyst Charlie O'Shea told CNBC.
The 17 companies below all struggled in 2017. Many of them closed stores and some have even filed for bankruptcy at least once before. These aren't the only retailers struggling as we head into 2018, but they are some of the most prominent.

Aamazon and Alibaba will take their place, of course.


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#7
Erowind

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As a former mall rat, this is a true shame. Gotta love when the security guards bust lightsabers out of their trunks we all put on Easter costumes from mall storage and duke it out in the parking lot.


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Current status: slaving away for the math gods of Pythagoras VII.


#8
Mike the average

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I think the other best feature about malls (other than shopping) will still keep them going, that is they are a social hub. Asia will still boom because air conditioning is a luxury.
'Force always attracts men of low morality' - Einstein
'Great spirits always encountered violent opposition from mediocre minds' - Einstein

#9
Raklian

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So, instead of malls, we'll have robotized distribution centers all over the place...?


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#10
Yuli Ban

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Except there'll be "Bots Only" signs inside so us filthy monkeys know to keep our distance.


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#11
Alislaws

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I imagine they will repurpose the malls, once normal retail becomes unprofitable renting storefronts will become very cheap. So the ones that aren't miles out of town will get more and more stores that cant be online, like hair dressers, restaurants etc.

 

I hope someone figures out a decent movement system so VR arcades kick off! we should definitely repurpose shopping malls into VR/AR experiences. 



#12
Yuli Ban

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Here are the stores Macy's is closing next

Macy's will close nearly a dozen stores early this year, as part of a previously announced plan to trim the retailer's massive store fleet and cut back on expenses.
About this same time last year, Macy's released more than 60 locations that would close in 2017, saying 100 total closures would take place over time. Eleven stores were officially added to that list Thursday.


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#13
caltrek

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Retail Apocalypse: Why Are Major Retail Chains All Over America Collapsing?

 

http://theeconomicco...rica-collapsing

 

Introduction:

 

If the economy is improving, then why are many of the largest retail chains in America closing hundreds of stores?  When I was growing up, Sears, J.C. Penney, Best Buy and RadioShack were all considered to be unstoppable retail powerhouses.  But now it is being projected that all of them will close hundreds of stores before the end of 2013.  Even Wal-Mart is running into problems.  A recent internal Wal-Mart memo that was leaked to Bloomberg described February sales as a “total disaster”.  So why is this happening?  Why are major retail chains all over America collapsing?  Is the “retail apocalypse” upon us?  Well, the truth is that this is just another sign that the U.S. economy is falling apart right in front of our eyes.  Incomes are declining, taxes are going up, government dependence is at an all-time high, and according to the Bureau of Labor Statistics the percentage of the U.S. labor force that is employed has been steadily falling since 2006.  The top 10% of all income earners in the U.S. are still doing very well, but most U.S. consumers are either flat broke or are drowning in debt.  The large disposable incomes that the big retail chains have depended upon in the past simply are not there anymore.  So retail chains all over the United States are now closing up unprofitable stores.  This is especially true in low income areas.

 

When you step back and take a look at the bigger picture, the rapid decline of some of our largest retail chains really is stunning.

 

It is happening already in some areas, but soon half empty malls and boarded up storefronts will litter the landscapes of cities all over America.

Just check out some of these store closing numbers for 2013.  These numbers are from a recent Yahoo Finance article

 

That is right, This was written in 2013.  I have been traveling lately and have yet to see "half empty malls" littering the landscape.  A boarded up store front or two perhaps, but not the collapse of an entire mall.  Something is filling those commercial spaces left by the statistically documented collapse.  In one case, I noticed an exercise gym where a store used to be.  

 

In other cases, a different retail outlet filled the vacated storefront.  

 

So, is this just the whirlwind of creative destruction continuing apace?

 

Mind you, that this may be an indicator of the declining purchasing power of certain segments of our society is worth exploring.


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#14
Yuli Ban

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^ The writing was really on the wall as far back as period directly after the Great Recession. Those with a keen eye on middling-term investment predictions could connect the dots of mismanagement + convenience + rapidly accelerating technology to figure that, at some point between 2015 and 2025, brick-and-mortal chains were going to suffer and terribly.
What's depressing is that millions of workers are the ones are who are gonna suffer, alongside a few stock brokers who held out too long expecting a turnaround.

 


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#15
Frizz

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I don't understand why brands are so eager to have bricks and mortar stores. Have a few flagship stores in major shopping destinations and focus almost exclusively online.
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#16
rennerpetey

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Here are the stores Macy's is closing next

Macy's will close nearly a dozen stores early this year, as part of a previously announced plan to trim the retailer's massive store fleet and cut back on expenses.
About this same time last year, Macy's released more than 60 locations that would close in 2017, saying 100 total closures would take place over time. Eleven stores were officially added to that list Thursday.

 

I go to Honey Creek Mall quite often, that's kind of sad that Macy's is closing there.

 

as for closed malls, there is a man on YouTube who tours dead malls, it is kind of cool, and creepy at the same time.


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#17
bgates276

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For me, this doesn't seem like a positive thing. While I have ordered a couple things online, out of necessity, I prefer to visit the actual stores. First of all, I don't have to wait a couple of days before it gets delivered, and I don't have to wait around and waste time at home for the delivery man.  Second, you can't always tell what something is really like, just by looking at it online. For something like a new television, how are you going to know what the picture quality is like, unless you see it in person? I also like trying on my clothing before I purchase, to see if it actually fits. I suppose you could return the items, but that is quite the hassle. 

 

Another point, what if you are just starting out in life, or, have to start back at square one? I mean, how are you going to order a new computer or phone online, if you don't already have one and you don't know anyone who will let you use theirs to place the order? I could see a lot of people getting put in a bind. I guess what I am saying is that there needs to be some kind of backup plan.

 

Finally, I don't know if anyone else has noticed, but Amazon often has high prices that don't seem to be competitively priced whatsoever. You really have to pay attention on their site to see whether you are actually getting a good deal or not. I sure hope they don't become a monopoly.   



#18
rennerpetey

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For me, this doesn't seem like a positive thing. While I have ordered a couple things online, out of necessity, I prefer to visit the actual stores. First of all, I don't have to wait a couple of days before it gets delivered, and I don't have to wait around and waste time at home for the delivery man.  Second, you can't always tell what something is really like, just by looking at it online. For something like a new television, how are you going to know what the picture quality is like, unless you see it in person? I also like trying on my clothing before I purchase, to see if it actually fits. I suppose you could return the items, but that is quite the hassle. 

 

Another point, what if you are just starting out in life, or, have to start back at square one? I mean, how are you going to order a new computer or phone online, if you don't already have one and you don't know anyone who will let you use theirs to place the order? I could see a lot of people getting put in a bind. I guess what I am saying is that there needs to be some kind of backup plan.

 

Finally, I don't know if anyone else has noticed, but Amazon often has high prices that don't seem to be competitively priced whatsoever. You really have to pay attention on their site to see whether you are actually getting a good deal or not. I sure hope they don't become a monopoly.   

I can't see the retail industry COMPLETELY disappearing.  I imagine that one would still be able to go out and buy just about whatever you want.  The result of this "retail apocalypse" would be that the main shift of buying things would go from stores to online.


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#19
Yuli Ban

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Claire's Plans Bankruptcy, With Creditors Taking Over

Claire’s Stores Inc., the fashion accessories chain where legions of preteens got their ears pierced, is preparing to file for bankruptcy in the coming weeks, according to people with knowledge of the plans.
 
The company is closing in on a deal in which control would pass from Apollo Global Management LLC to lenders including Elliott Capital Management and Monarch Alternative Capital, according to the people, who asked not to be identified because the matter isn’t public. Venor Capital Management and Diameter Capital Partners are also involved, the people said. The move should help ease the $2 billion debt load at Claire’s.
 
A spokesman for New York-based Apollo declined to comment. Representatives for Claire’s and the creditors declined to comment or didn’t respond to messages. New York-based Monarch specializes in distressed companies, while Elliott Capital is run by Paul Singer, the billionaire and activist investor.


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#20
Yuli Ban

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5300 jobs at risk as two big UK retailers collapse

It's a very dark day for British retailers and their workers.
Toys "R" Us and electronics chain Maplin have collapsed in the UK, putting a combined 5,300 retail jobs at risk.
Administrators were appointed Wednesday to run both businesses after executives failed to find buyers.
Toys "R" Us is one of the UK's largest toy retailers with 3,000 staff and 105 stores across the country. Maplin employs just over 2,300 staff at more than 200 stores, selling electronics, tech toys and smart-home devices.
Investors took fright at the news, selling off shares in some other British retailers. Mothercare, which sells maternity and baby products, saw its shares plunge 10% in London trading.
 
Insolvency specialist Moorfields Advisory has been put in charge of winding down Toys "R" Us, closing stores and selling off assets. The collapse into administration follows Toys "R" Us filing for bankruptcy in the US in September under the weight of $5 billion in debt.


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