The Retail Store Closing Tsunami Intensifies – -2016 Closings Up 33%

The grim reaper is on a shopping binge.
The number of shuttered stores this year is already outpacing last year’s rate – and showing no signs of slowing down.
Last week, Men’s Wearhouse said it will close a whopping 250 stores, whileSports Authority filed for bankruptcy and announced plans to close 140 stores earlier this month.
In February, Kohl’s said it will close 18 underperforming stores. Others such as teen retailer Aeropostale, with more than 900 stores, are teetering on the brink of insolvency. Big-box retailers, including Walmart, Macy’s and The Gap, are also culling stores, blaming a weak holiday season, increased competition and customers’ preference for shopping online, among the reasons.
While most retailers typically trim their ranks at the beginning of a new year – up to 50 percent of store closures happen around now – some industry experts say this year could be the beginning of a big shakeout.
‘We are hitting a tipping point,’ said Richard Church, managing director of Discern Investment Analytics. ‘We are in a weak demand environment that could meaningfully accelerate next year.’

This post was published at David Stockmans Contra Corner on June 8, 2016.