Retail meltdown: Which chains are closing stores in 2016?
With some retailers, including Sports Authority and Sports Chalet, closing all of their stores, and others, like Aeropostale, teetering on the edge of heading into the great strip mall in the sky, this has been a difficult year for brick-and-mortar retailers.
The damage, however, is not limited to the chains that are closing up shop entirely. A number of others -- including some iconic names -- are getting smaller, closing stores as a way to shrink into, if not profitability, at least lower losses.
It's a tough time for America's shopping centers, with it looking like those temporary pop-up Halloween stores will have their pick of prime locations this year. Blame the Internet in many cases, changing consumer demands in others, bad management in a few, and a combination of all of the above in many cases.
Here's a look at some of the retailers that have either already begun closing locations or plan to do so this year.
Ralph Lauren (NYSE: RL) plans to cut 8% of its workforce while closing more than 50 stores, according to the company. It also plans to trim its management structure from an average of nine layers down to six. CEO Stefan Larsson, who joined the company from Old Navy, where he led a successful turnaround, also plans to cut the amount of time it takes the brand's clothes to go from idea to stores.
Macy's (NYSE: M) plans to close 40 stores and eliminate as many as 4,500 jobs, a process that has already started and will continue through the summer. CEO Terry J. Lundgren said the moves were needed due to the company's "disappointing 2015 sales and earnings performance." The chain does plan to open five new Macy's locations in 2016 as well as 50 additional Macy's Backstage off-price stores.
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Sears (NASDAQ: SHLD) has struggled with both its namesake brand and its low-price Kmart locations and announced in April that it plans to close unprofitable locations this summer. The company has already begun the process of closing 68 Kmart and 10 Sears stores.
"The decision to close stores is a difficult but necessary step as we take aggressive actions to strengthen our company, fund our transformation and restore Sears Holdings to profitability," said CEO Edward S. Lampert in the press release. "We're focusing on our best members, our best categories and our best stores as we work to accelerate our transformation."
Office Depot (NASDAQ: ODP) entered 2016 expecting to no longer exist by the end of the year as it had planned to merge with Staples (NASDAQ: SPLS). That deal was nixed by federal regulators and now the chain must find a way forward. Part of its ongoing strategy involves closing stores and it had already shut down nine as of its fiscal first quarter and plans to close a total of 50 locations in 2016.
Staples has also been steadily shrinking and it closed 73 stores in 2015 with plans to shut down another 50 this year, according to its Q4 earnings release. Those closures are expected to continue even though the Office Depot merger has been called off.
Wal-Mart (NYSE: WMT) has been stepping up its digital sales efforts while it has been making strategic decisions to close stores. The company announced in January that it plans to close all of its 102 Wal-Mart Express stores as well as 52 full-size U.S. locations.
"Actively managing our portfolio of assets is essential to maintaining a healthy business," said CEO Doug McMillon in the press release. "Closing stores is never an easy decision, but it is necessary to keep the company strong and positioned for the future. It's important to remember that we'll open well more than 300 stores around the world next year. So we are committed to growing, but we are being disciplined about it."
Gap (NYSE: GPS) has faced some of the same retail headwinds that have plagued Ralph Lauren. That has led the company to a major pullback of some of its international efforts. For example, it pulled the Old Navy brand out of Japan entirely, closing over 50 stores. The company's North American operations have not been hurt as dramatically as some of its international ones, but the retailer did close 14 stores across its Gap, Old Navy, and Banana Republic brands in its fiscal Q1. More closures are expected in the U.S. in 2016, but the company has not set a specific number.
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