Neiman Marcus is the first American department store to go bankrupt during the closure of the Coronavirus. “Before COVID-19, the Neiman-Marcus Group made solid progress on our path to long-term profitable and sustainable growth,” CEO Geoffroy van Raemdonck said in a statement. “But like most companies, we are now facing unprecedented disruptions from the COVID-19 pandemic, which has put relentless pressure on our business,” Geoffroy van Raemdonck said in a statement. Macy’s relies heavily on its brick and mortar businesses and laid off 125,000 workers in the first two weeks of closure. J.Crew filed for bankruptcy in early May.
JCPenney and Lord & Taylor are also reportedly considering bankruptcy, but the pandemic is actually just another nail in the coffin. These companies had to contend with the entry into force of the home accommodation orders long before the entry into force. A recent report by S&P Global Market Intelligence found that department stores are seen as more at risk of not repaying their loans than any other consumer sector, with a 42 percent chance of default over the next 12 months. In 2017, Credit Suisse estimated that 20 to 25 percent of malls would close between 2017 and 2022, largely because anchor stores such as Macy’s, JCPenney and Sears closed.
While Neiman Marcus has not yet revealed whether he plans to close stores, many well-known brick and mortar stores have done just that. In 2019, the major retailers closed more than 9,300 stores (almost 60 percent more than in 2018). In ten years’ time, many well-known names could be a thing of the past. Here’s a look at once-popular stores that went out of business (or soon maybe).
10. Department Stores
Department stores have long defined retail. They are the anchor shops within the shopping centers. They occupy most of the properties in suburban shopping malls and in urban retail blocks. Marshall Field’s was founded in the 19th century, and Hecht’s department store was founded in 1957. Macy’s acquired both brands in 2005 and rebuilt or closed all stores.
The following year, Macy’s retired the department store brand Kaufmann’s. But, as already mentioned, Macy’s (founded in 1929) is facing great battles of its own. It plans to close 125 stores over the next three years. In 2018, the Bon Ton stores (including its subsidiaries Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers) were liquidated. As a result, 256 stores were closed. In 2009, Filene’s Department Store, a department store founded in Boston in 1881, went bankrupt.
None of his brick and mortar sites were preserved. And California-based Mervyn’s was founded in 1949 and had nearly 200 locations at its peak. In 2008, the company filed for bankruptcy and closed all its businesses. Two big department stores, Sears and JCPenney, are holding out, but they are in trouble. Sears (along with KMart) has closed more than 3,500 stores and cut about 250,000 jobs over the past 15 years. The company submitted an application for Chapter 11 in October 2018 and began closing stores.
In February 2019, the company was acquired by Transformco, which announced that fewer than 200 Sears and KMart stores will continue to operate. In 2010, JC Penney had more than 1,100 stores but had to close most of it due to its declining sales. The retailer has not reported quarterly sales growth since the 2017 holiday season. (In 2019, same-store sales fell 7.5 percent on the holidays.) Six stores closed in early 2020. The coronavirus ultimately proved too much to cope with, and this month JC Penney finally filed for bankruptcy.
9. Clothing Stores
There are shops that sell clothes for the whole family, and those that specialize. Some are aimed at children, tweens or teenagers. Others focus on consumers of a certain size. And there are shops that sell only one type of goods: underwear, or socks, or hats, or suits. As mentioned earlier, department stores that sell clothing for every family member are not doing well. Filene’s Basement, an off-price store that began at Filene’s department store, closed all 20 stores in 2011.
The Limited abruptly closed all 250 of its stores in 2017. And in January 2019, Henri Bendel closed all 23 of its stores after 123 financial years. Charlotte Russe, a women’s clothing chain founded in the mid-1970s, closed more than 500 stores in April 2019. Avenue, a high-size women’s outerwear chain, closed 222 stores in August 2019. In the same month, San Antonio-based A’Gaci closed all 54 stores.
And the luxury department store brand Barneys New York, founded in 1923 in New York City, ceased operations in February 2020. DressBarn announced that it would close all 650 stores as the chain “did not have an acceptable level of profitability in today’s retail environment”. In 2009, Steve & Barry’s, which sold inexpensive sportswear for teenagers, closed all its stores. Gadzooks, another teenage clothing store, opened in 1983 and filed for bankruptcy in 2005 when it was bought by Forever 21, which subsequently closed all stores. Wet Seal, a teenage clothing store, finally closed its stores in 2017 and now sells only online.
Gymboree, a chain of clothing for babies and children, closed 400 stores in 2017 under Chapter 11 protection. In January 2019, the retailer filed another application, this time closing all (more than 800) of its Gymboree and Crazy 8 stores. (The Gymboree items are now being sold by former rival The Children’s Place.) Children’s premium brand Peek Kids closed its stores when parent company Charlotte Russe (above) quit its business.
The apocalypse in retail and declining birth rates (which reached an all-time low in 2018) forced Destination Maternity to file for bankruptcy in 2019. Only a handful of the 458 stores of Destination Maternity, Motherhood Maternity and Pea in the Pod remain open. Clothing stores that remain open – while closing many of their locations – include Forever21, Gap, Chico’s, Victoria’s Secret, Christopher & Banks, Francesca’s, Abercrombie & Fitch and J. Crew. .
8. Shoe Stores
Brick and mortar shops specializing in shoes suffer. They feel the same pressure as clothing stores, and they compete with online power plants like Zappo’s, Shoe.com, and Amazon.
Take Kinney Shoes, for example. The store, which opened in 1894, had 467 stores at its peak. All were closed in 1998. In the 1960s, Thom McAn had more than 1,400 Tom McAn stores. The chain closed in 1996, but the brand is still available through other retailers. In February 2019, Payless ShoeSource filed for bankruptcy and closed all of its 2,500 stores in one of the largest retail liquidations in history.
7. Toy Stores
How picturesque it is to imagine children looking into the colorful shop window of the toy store in the city center! But the reality is that toy shops are simply no longer popular. It’s not about kids not playing, it’s more about what they’re playing with and how they buy their toys. Games and electronics are very popular even among the very little ones, so the interest in toy railways, wooden puzzles, and babydolls is low. And much of what children play with can be digitally streamed.
The iconic toy store FAO Schwarz was located at a prominent location on Fifth Avenue in New York City. The retailer closed in 2015 but reopened three years later at a new location in Manhattan. Other toy shops weren’t so lucky. Imaginarium was an educational toy business in the 1980s. In the 1990s, the stores began to close, and by 2003 the parent company Toys R Us had closed all stores. Zany Brainy’s businesses filed for bankruptcy in 2001. K-B Toys closed all of its 1,300 stores in 2009. And Toys R Us, the toy store of all toy stores, closed in 2018.
6. Electronics and Computers
While children and adults prefer electronic entertainment over everyone else, the shops that sell the stuff are not immune to the apocalypse of retail. Media Play, which opened as a big-box version of Sam Goody (see below), closed forever in 2006. Electronics chain Tweeter launched in 1972 but closed all of its stores in 2008. Circuit City closed 567 stores in 2009. CompUSA, a chain founded in 1984, lost its last business in 2012. Sharper Image sells goods through its website, third-party catalogs and retailers, but no longer has any stores.
And now that video games are so easy to download, players no longer have to go to a store to buy them. This is a problem for GameStop, which has more than 5,700 locations in 14 countries. The company has suffered major losses and lost revenue in recent years, closing nearly 200 stores in 2019. And CFO James Bell warned of a “much larger tranche of closures in the next 12 to 24 months”.
5. Music and Video Stores
Before consumers could stream movies and music, they searched the shops for their favorites. Much of the younger generation has never experienced music in a format other than digital. Tower Records, one of the largest record stores in the 1990s, closed all of its U.S. stores in 2006.
The first Sam Goody music store opened in the 1940s, but he too couldn’t keep up with the evolving music technology. By 2010, its stores were either closed or switched to other brands (such as FYE). Hastings Entertainment closed all 123 stores in 2017. And Virgin Megastores, the king of the CD market, closed all US locations in the same year.
Fifteen years ago, the blockbuster video rental company had more than 9,000 stores and changed the way people watch movies. But long before Netflix changed it again, Blockbuster suffered and filed for bankruptcy in 2010. Now there is only one blockbuster store: in Bend, Oregon..
4. Furniture and Home Goods
Despite HGTV’s positive impact on the DIY and furnishing business, furniture and homewares stores are not safe from the retail apocalypse. Levitz Furniture was founded in 1910 but closed all of its stores in 2008. Linens ‘n Things had more than 500 stores in 2006 and zero stores in 2008. (The company still maintains an online presence).
In October 2019, Hamilton Beach Brands announced that it would close all 160 stores of The Kitchen Collection, which sold small kitchen appliances and cooking appliances. The craft chain A.C. Moore closed all of its 145 stores. The parent company Nicole Crafts is in the process of converting about 40 locations into Michaels stores.
Bed, Bath & Beyond felt the heat and closed 60 stores in 2019. Pier 1 Imports announced plans to close 57 stores in 2020. And Z Gallerie, a furniture store, will close 17 of its 76 stores as part of its restructuring under Chapter 11.
3. Book Stores
Bookstore chains had a negative impact on smaller, independent bookstores. Then electronic readers like Kindles and digital audio apps like Audible hurt the chain companies. In the end, however, sales of e-books flattened, and the physical book did not. What changed was the way real books are bought: not in bookstores, but online.
In 1987, Barnes & Noble acquired B.Dalton Books and officially closed the bookstore in January 2010. Barnes & Noble is the largest bookstore chain, but it has struggled and has closed about 10 percent of its stores since 2011.
Waldenbooks, founded in 1933, merged with Borders in 1994. When Borders was liquidated in 2011, all locations of both brands closed for good. In 2017, the Family Christian Stores closed with 240 stores selling books and other religious goods. And LifeWay Christian Stores closed 170 stores in 30 states. Book World, the chain of 45 stores founded in 1976, announced its liquidation in December 2017. “Sales in our malls have fallen from 30 percent to 60 percent this year,” owner Bill Steur told The New York Times. “The Internet is killing the retail trade. Bookstores are only the first to leave.” It was Amazon that replaced Book World as the fourth-largest bookstore chain.
2. Sporting Goods
The sport is also fiercely competitive in the retail sector.
Oshman’s Sporting Goods was founded in 1933, acquired by Gart Sports in 2001 and renamed Sports Authority. Sports Authority, in turn, had more than 200 U.S. locations when the company went bankrupt in 2016. She closed them all and sold her website to Dick’s Sporting Goods. Dick’s also acquired Galyan’s Trading Post in 2004, Joe’s in 2009 and Golfsmith in 2016.
Sport Chalet, which first opened in 1959, abruptly closed all its stores in 2016. MC Sports closed in 2017. In 2019, Advanced Sports Enterprises filed for bankruptcy protection and announced the closure of 102 Performance Bicycle stores.
Sports retailer JackRabbit bought Olympia Sports and announced plans to close all 76 stores, and Modell’s Sporting Goods, which opened in 1889 and was the oldest sporting goods chain, announced the closure of all 115 stores in March 2020.
1. Discount Chains
Saving never goes out of fashion, but the way consumers look for bargains is.
The Ames department store, which has more than 700 locations, struggled with debt and declining sales before closing all stores in 2002. Dollar Tree has converted 200 Family Dollar stores into Dollar Tree stores and closed nearly 400 other Family Dollar stores.
In 2019, discount chain Fred’s closed 159 stores in May, 104 in June and 49 more in July. By the end of the year, all 520 stores were permanently closed.
And Shopko, which began in 1962, offered customers “high-quality service and low prices”. When Amazon arrived and offered the same thing, Shopko went under. It closed all 371 of its stores in 2019.
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