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More stores go dark

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NEW YORK — The lights continue to go out at an alarming rate in stores across the United States, according to the latest report from Coresight Research. With 2019 nearly two-thirds over, the number of shuttered stores thus far is well in excess of 2018’s total, while the number of openings, which already nearly equal’s last year’s total, is concentrated almost entirely in one sector: small-box discounters, or dollar stores.

Coresight, which tracks store closures and openings in both the U.S. and the United Kingdom on a monthly basis, tallies 7,567 closures as of July 31, far ahead of 5,524 closures for all of 2018.

Apparel specialty retailers have been hammered the hardest, with 2,750 darkened locations so far this year. That represents 36% of the year-to-date total, whereas the sector accounted for just 14% of 2018’s total closures.

The damage has been widespread, with the hardest-hit chains including Gymboree, Dressbarn, Charlotte Russe and Charming Charlie, which together contribute 79% of closures in the sector. Gymboree declared bankruptcy in January and closed 749 stores, followed in February by Charlotte Russe’s bankruptcy filing and announcement that it would shutter at least 500 stores. In May, Dressbarn owner Ascena Retail Group announced it would shut all 661 of the chain’s stores. Most recently, Charming Charlie filed for bankruptcy in July and declared it would close all 261 of its outlets.

The second-hardest-hit segment is footwear specialty, with 2,100 closures, or 28% of the total. That entire total consists of Payless outlets, which represented the largest single-chain total of shuttered sites. The company filed for bankruptcy for the second time in February after entering Chapter 11 and emerging from it in 2017.

General merchandise stores were next, with 1,049 closures, or 14% of the total. Three chains accounted for most of the loss. Shopko Stores, which filed for bankruptcy in January, shuttered all of its 371 stores by June. The Family Dollar Stores division of Dollar Tree, meanwhile, plans to shut a total of 359 stores, while Fred’s Inc. is closing 313 locations, leaving it with approximately 80 stores still in operation.

In the drug store sector, only Walgreens Boots Alliance had reported closures, with 195 planned as of July 31. In early August, however, the company announced it would shutter another 200 stores by fiscal 2022. The company had already closed 631 of the 1,932 stores it acquired from Rite Aid Corp. in 2018. The Coresight total does not include 46 closings announced earlier this year by CVS Health.

In the department store sector, Sears Holdings Corp. accounted for the largest percentage of the total of 183, with 72 announced closings. In early August, the beleaguered retailer added another 21 locations to the list.

At first glance, the store openings count would seem to provide some consolation, with the year-to-date total of 3,064 rapidly approaching last year’s overall total of 3,258. However, more than half (57%) of those openings are concentrated in the general merchandise segment, and of that segment total of 1,739, 1,525, or 88%, will come from just three dollar store chains, Dollar General Corp., and the Dollar Tree and Family Dollar banners of Dollar Tree Inc.

Dollar General, which already fields more than 15,000 locations, has continued its aggressive store expansion program with plans to open 975 more this year, following 836 openings in fiscal 2018. Dollar Tree, meanwhile, intends to debut 348 of its core Dollar Tree banner outlets as well as 202 new Family Dollar stores, somewhat offsetting the 359 closures (which will include some locations being rebannered as Dollar Tree).

While dollar stores are the only segment that can be described as growing aggressively, food retailers have shown considerable resilience, with only 23 announced closures and 228 planned openings. Coresight allocates 159 of those openings to deep-discount grocer Aldi, which plans to open around 2,500 stores by the end of 2022. The Coresight figure is a calendarized estimate for 2019.

Although the apparel specialty sector is clearly taking a pounding this year, it nevertheless claims the second-highest total of openings year to date with 318. Off-price chains Ross Stores and Burlington are bucking the segment’s negative trend with plans to open 100 and 50 stores, ­respectively.

“Overall, with the number of announced closures in 2019 already surpassing the total number of closures in 2018, and standing at more than double the number of year-to-date announced openings, this year continues to represent testing times for brick-and-mortar retail, and we expect this theme to continue in the second half of the year,” the report ­concludes.


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