Earlier this year, Coresight predicted that more than 15,000 store closings could be announced by retailers in 2020.
An overabundance of vacant windows will let the owners scramble to fill these spaces or find new uses for their real estate. There aren’t many retailers that continue to grow thanks to bricks and mortar today. And if they are, many are looking to downsize in small stores.
In recent weeks, bankruptcy filings in retail have started to increase. Coresight has said it expects more liquidations, confirming the closing balance sheet. Department store chains Neiman Marcus, Stage Stores and J.C. Penney have filed for bankruptcy. The same goes for the Tuesday morning home goods chain and clothing manufacturer J.Crew. Some of these retailers will close some stores and resume operations, but Stage Stores has warned that it may be necessary to close all of its stores if they cannot find a buyer.
Coresight has so far registered a total of 4,005 closings announced by retailers in 2020, including more than 900 by interior decoration retailer Pier 1 Imports, approximately 300 by the GNC health chain, more than 200 by Tuesday morning , and some of L’s Victoria’s Secret, Papyrus and Penney brands.
“We expect a return to pre-crisis levels in offline discretionary retail sales overall will be gradual, as we expect consumer confidence, demand and spending to be lower than normal for a while, “said Coresight founder and CEO Deborah Weinswig in the report. .
“Since recovery from pre-crisis levels can be gradual, retailers who were struggling to stay in business before the crisis should not be able to stay on course for recovery and may end up by shutting down a number of stores, “she said.
A separate eMarketer report predicts that total retail sales in the United States will drop by more than 10% in 2020 and that they will not rebound to pre-Covid-19 levels until 2022. Meanwhile, eMarketer calls for online sales for 18% increase this year.
It is expected that all categories of retail trade, except food and beverages, as well as health and beauty, will experience lower sales due to the pandemic.
“This is the deepest consumer spending freeze in decades in the United States,” said Cindy Liu, senior analyst at eMarketer.