Apr 14, 2020
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About this Deal
Get ready for what could be the biggest slate of store closures and retail bankruptcies in recent memory.
For every day that retailers are closed during the coronavirus crisis, the chances that they won't survive this pandemic grow larger.
While some retailers are flourishing – namely chains with major grocery sales like Walmart, Target, Kroger and Costco – others are trying to stave off doom. In many cases, these retailers were already in trouble already as Americans shopped increasingly online.
Forever 21 and J.C. Penny were hanging by a thread, while Sears and Kmart have been waiting for the final shoe to drop for years. Now these and other chains, including Neiman Marcus, David's Bridal and Ascena Retail Group, are losing cash rapidly while they await the chance to reopen their doors. But there’s no guarantee that customers will come flocking back to shop amid serious concerns about their finances and getting exposed to the still lingering virus.
U.S. retailers have already announced 2,184 permanent closures this year, most of which were announced before the pandemic began, according to retail analytics firm Coresight Research.
Papyrus, Modell’s Sporting Goods and Art Van Furniture announced plans to liquidate all of 635 of their locations.That follows a year in which more than 9,700 stores closed, according to updated data released Friday by Coresight.
Now, chains like GNC, J. Crew and Rite Aid are fighting for their lives, according to analysts.
Camilla Yanushevsky, a retail stock analyst for CFRA Research, said the fallout for retail will be “pretty striking” after several years of mass closures.
“It’s a battle of who’s going to survive, who’s just going to close and who’s going to need to file for bankruptcy,” she said. “The companies that are most at risk at the ones that were already distressed before the crisis.”
While the federal government’s $2.2 trillion stimulus package includes funds to ease the financial impact of the coronavirus on consumers, airlines and small businesses, Yanushevsky said it’s not likely to help large physical retailers much in the long run.
“I think a lot of people are going to be more hesitant to go into stores, specifically malls or more closed areas, until a vaccine comes out,” Yanushevsky said. “We’ve already seen a big shift to e-commerce and that’s just going to proliferate more for safety reasons.”
Read More Here: https://www.usatoday.com/story/money/2020/04/14/coronavirus-store-closures-bankruptcy-covid-19-pandemic-retail/5124326002/