22 Retailers Closing the Most Stores

Thursday, August 24, 2017 by

Stores

Sears Holdings Corp., owner of Sears and Kmart stores, said Thursday it plans to close 28 more Kmart locations this year, in another sign the once-iconic retailer’s financial condition is deteriorating.

The announcement about the store closings follows previous announcements from the Hoffman Estates, Illinois-based retailer that it shuttered 180 Sears and Kmart stores this year and will close 150 more locations by the end of the third quarter.

Sears also reported fiscal second-quarter financial results Thursday that put the company’s difficulties in stark relief. The retailer said overall sales at stores open at least a year – a key retail industry metric – declined 11.5% during the second quarter of 2017, below analyst expectations.

Sears is dealing with the same challenging retail environment as peers such as Macy’s and J.C. Penney Co. — falling foot traffic at shopping malls and the migration to e-commerce companies such as Amazon.com.

Due largely to the success of e-commerce companies, Sears is just one of several major retailers that are closing dozens, and in some cases hundreds of stores. Some of the retailers closing the most stores this year are not downsizing but shuttering their businesses entirely. All but one of the five companies at the top of this list have filed for bankruptcy and announced plans to close all their stores.

To identify the companies closing the most stores, 24/7 Wall St. reviewed major U.S. retailers that have announced store closings for 2017. All listed store closings are based on company announcements that will either take place entirely, or will begin, in 2017. Total store counts are based on company annual reports, when available, or corporate websites, and are U.S. store closures only, unless otherwise specified.

22. Guess
> Closings: 60
> Total stores: 339
> Industry: Fashion

Guess is one of a number of retailers which have a substantial presence in mall and other shopping centers to announce substantial store closings. During the company’s fourth quarter earnings call in mid-March, Guess?, Inc. CEO Victor Herrero announced plans to shutter about 60 of the retailer’s locations. This will approximately match the number of locations it has closed over the past two years combined. Most of the closures will likely be the company’s flagship stores. Herrero said the Guess would also target locations of the company’s Marciano chain for closures.

21. Abercrombie & Fitch
> Closings: 60
> Total stores: 340
> Industry: Teen apparel

Teen and young adult apparel company Abercrombie & Fitch, which also owns Hollister, has fallen on hard times as of late. The company’s sales have been hurt by the ever-growing popularity of online shopping and by more affordable fast-fashion retailers. In its most recent annual report, A&F noted that its success is closely tied to foot traffic in American malls. The company warned that if mall traffic continues to decline, it will likely be felt in the retailer’s bottom line.

During its fourth quarter conference call in March, the company said it will close 60 stores this year. Given that sales of the company’s namesake brand are down 11% from 2015 to 2016 while Hollister sales have remained steady, it is likely that most closings will be A&F locations.

20. CVS Health

> Closings: 70
> Total stores: 9,709
> Industry: Health and wellness

CVS Health announced in December 2016 its plans to close 70 of its 9,700 locations over the next few months. The announcement came after a relatively good year for CVS, in which the company’s annual revenue increased 16% from $153.3 billion in 2015 to $177.5 billion in 2016. The closures are part of several cost-cutting measures CVS is implementing that the company estimates will generate $3 billion in savings by 2021. While the company has reported rising profits in recent years, the cost-cutting initiative may be a precautionary measure in light of growing uncertainty within the health care industry under the current presidential administration.

19. Staples
> Closings: 70
> Total stores: 1,255
> Industry: Big box retailer

During its fourth quarter earnings announcement, in which it also reported a 7% quarterly decline in same-store sales, Staples announced plans to close 70 locations in North America. The office supply retailer already closed 48 stores in 2016 and 73 in 2015 as it has been facing increased competition both from other brick-and-mortar as well as online retailers. In an effort to consolidate, Staples sought to merge with Office Depot, but the deal fell through in 2016 after a federal judge blocked the move on antitrust grounds. In April, The Wall Street Journal reported that the struggling retailer is considering offering itself up for sale in light of the failed merger.

18. Office Depot
> Closings: 75
> Total stores: 1,441
> Industry: Office products

In August 2016, three months after a federal judge blocked the company’s proposed merger with Staples, Office Depot announced its plans to close approximately 300 stores over the next three years. The company intends to close 75 locations in 2017. The closures are part of a cost savings program that Office Depot expects will generate $250 million in benefits by 2018. The company has already closed 400 stores since 2014, but plans to expand its pilot program for a new store concept by opening 100 redesigned stores roughly half the size of a typical Office Depot location.

P/C MIKE MOZART 

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