Thousands of mall-based stores in US are shutting down in what’s fast becoming one of the biggest waves of retail closures in decades.More than 3,500 stores are expected to close in the next couple months.Department stores like JCPenney, Macy’s, Sears, and Kmart are among the many companies shutting down stores, along with middle-of-the-mall chains like Crocs, BCBG, Abercrombie & Fitch, and Guess.Some retailers are exiting the brick-and-mortar business altogether and trying to shift to an all-online model.For example, Bebe is reportedly closing all 170 of its stores to focus on growing online sales, according to a Bloomberg report . The Limited also recently shut down all 250 of its stores , while still selling merchandise online.
As stores continue to close, many shopping malls will be forced to shut down as well.When an anchor store like Sears or Macy’s closes, it often triggers a downward spiral in performance for shopping malls.
There has to be a winner in all this misery and that is JEFF BEZOS of Amazon who leapfrogged Warren buffet and spanish fashion tycoon ortega to become the second richest person in world yesterday.The Bloomberg Billionaires Index shows Bezos is now worth $75.6 billion. His worth jumped by nearly $1.5 billion dollars on Wednesday, powered by a record high for Amazon’s stock.
We can expect the same in India too. Already we are having many ghost malls. high pressure on mall lease rentals in future…dont know if thats good or bad but should surely help in bringing the prices of branded products down as rentals were probably a high input cost..what say ?
i agree with you. the biggest cost is rents and leases and online is already leading to rethink of business models.
Why the wave of closures ? What are the Core Reasons please….
Three reasons
US was having highest numbers of retail malls per person and online is now becoming a big business
retail malls require space and pay for min wages ( human beings) which can be controlled in online
americans are shifting their preserence from buying retail to spenfing more on entertainment and eating out