9300 Stores Shut Down American Entity Retail To Welcome "Cold Winter"

The past ten years have been devastating for the physical retail industry in the US. The "cold winter" has caused traditional shopping centers and stores across the United States to collapse at a record rate.

The main reason behind this phenomenon is simple: Americans are more and more inclined to online shopping.

In the past 2019, the number of stores closed in the United States set a new record. According to the latest data in the commercial insider magazine, there are as many as 9300 stores closed this year, breaking the record of about 8000 stores closed in 2017, including Vitoria's secret, GAP, Forever 21 and other world-famous chain brands, and even the traditional department store giants such as Messi's department store and Sears's department store.

Retail business in the cold war from the financial crisis

According to the inside story of the business, all this has to start with the financial crisis in 2008. This financial crisis laid the foundation for the difficult years of the US retail industry in the next 10 years.

After the housing bubble burst, the US economy experienced the worst recession since the great depression. Thousands of people lost their jobs, and the business system, including large retailers, was also affected.

Over the next few years, unemployment has slowly declined over time, and consumer confidence has improved. However, many retailers are struggling to recover. This led to a group of private Holdings Company starting to acquire large enterprises and divestiture them from publicly traded entities. These private Holdings Company control a range of brands including Belk, Neiman Marcus and other department stores, as well as Hot Topic and PacSun shopping center.

However, in some acquisitions, retailers are carrying huge debts that they cannot afford to pay. Over the past few years, debts of billions of dollars have begun to expire, resulting in a large number of bankruptcies and bankruptcies. This phenomenon will continue in the next few years.

In June 2018, the bankruptcy of Toys R Us, a toy giant, was typical of the private equity issue.

Although toy R & D was the largest toy seller in the United States, the surge in other smaller chains, as well as increased competition from big retailers such as WAL-MART, began to hinder the development of the brand.

The toy R & D city was originally a listed company. In 2005, private equity giants Bain Capital, KKR and the real estate trust investment fund jointly invested $6 billion 600 million to acquire and privatize it. The hope is that the toy Roundup city is hoping to take over a battle. Not only that, the deal left more than 5 billion dollars in debt to the toy city, but the company failed to pay off debts in 10 years and finally went bankrupt.

At the same time, e-commerce has begun to spread rapidly in the past ten years. According to the commercial insider, in 2018, the average household consumption in the US was $5200, an increase of nearly 50% compared with that of five years ago, and consumers began to shift from traditional shops to online shopping. In fact, according to CNN news, the consumption expenditure of the United States this year is still strong, with the unemployment rate below 4%, which is at a low level for half a century.

The latest report by UBS, an investment company, also shows that with the rise of online shopping, more and more stores may be closed in the next few years. By 2026, 7.5 stores that sell clothing, electronics and furniture will be closed, and online shopping is expected to account for 25% of retail sales.

With the rapid rise of e-commerce, a new type of retail business is coming - facing the consumer mode directly. Casper, Glossier and other net red brands focus on cultivating large numbers of fans in social media and no longer need traditional physical sales space. On the contrary, traditional department stores and shopping centers have lost their attractiveness, because it is hard to find unique "flash points" to attract customers.

"Physical retailers have fallen into recession," Moodie analysis chief economist Mark Zandi pointed out. "They have been firing workers continuously." According to statistics, in the past ten years, 1 million 300 thousand of the retail industry employees have been unemployed, and another 728 thousand have been indirectly unemployed because of layoffs.

John Morris, a senior analyst at Financial Services Company D.A. Davidson, said the "cold winter" is a useful reshuffle for the retail industry. "We are in the process of cleaning up for many years. Retailers find that for physical stores, less is more.

Who was "frozen" in the cold winter of retail business in 2019?

Payless:2500 house

Payless, the US shoe giant, filed for bankruptcy in February this year, and said it plans to close all the stores in North America (2500), possibly the largest retail settlement in US retail history.

Online retail's attack on physical retailing is considered to be the main reason leading to Payless closing. This is the second time that the company has filed for bankruptcy since April 2017.

Founded in 1956, Payless is the largest discount footwear chain in the US.

Gap:230 house

Gap said in February this year that it will close 230 stores with the same name in the next two years. The company reported that its brand store sales fell by 7% during the holiday season.

Forever 21:350 home

In September this year, the famous international chain brand Forever 21 filed for bankruptcy protection, and plans to close 350 stores in the world during the restructuring process, including 178 stores in the US.

However, the company said the company just wanted to use the bankruptcy petition to redesign and support its future. Part of the restructuring of the company is to narrow its global market territory and withdraw from 40 countries. It is learnt that, in addition to its business in the US, Forever 21 will continue its business in Mexico and Latin America while reducing its operations in Asia and Europe.

Sears department store: 175

In October 2018, the world department store giant, once the "king of world department stores", has a century old Sears company filed for bankruptcy protection. After breaking away from bankruptcy protection in February, the company announced that it will continue its new round of store closes in August, September and November.

Secrets of Vitoria: 53 houses

The "secret of Vitoria", the world's famous underwear brand, said in March this year that it will close 53 stores in North America this year due to "declining performance". In November this year, from 1995, the twenty-four year old secret show also ended abruptly.

It is reported that the loss in the three quarter of this year was $151 million 200 thousand, a net loss of $252 million. And at its peak in 2009, it set up a record of selling 600 underwear per minute.

A&F (Abercrombie & Fitch):40 home

The US fashion brand Abercrombie & Fitch said in March that it planned to close about 40 stores, most of which are native American stores. In November 26th, the group's third quarter earnings report showed that sales were $863 million during the period, lower than analysts' expected $868 million, while net profit dropped 73% to $6 million 500 thousand.

Barneys New York:15 home

Barneys New York, the famous high-end department store chain, filed for bankruptcy protection in August this year, and said it would close 15 of the 22 stores in New York.

Messi store (Macy's):9 home

The Messi department store, which has been shutting down since 2016, has closed stores in Wyoming, Washington, California, New York, Indiana, Massachusetts, Virginia and West Virginia this year.

In the third quarter of this year, the net sales volume of Messi department store fell 4.3% to 5 billion 170 million US dollars year-on-year, net profit fell 97% to $2 million during the quarter, and the same store sales declined for the first time in two years (3%).