Changes in shopper behaviors, online shopping and deep discounters have led to bankruptcies or brick-and-mortar closings for retailers. Many experts expect the closings to continue in 2017 as more people shop online.
In just the five days between Thanksgiving Day to Cyber Monday, consumers spent nearly $13 billion online in the U.S., according to Adobe Digital Insights.
Consumers account for 70 percent of U.S. economic activity, so retail spending is critical in fueling a stronger economy. Stronger growth is expected to translate into more hiring.
In the region, three locations of The Limited women’s clothing store were closed permanently the last week of December. Hoards of shoppers snagged 90 percent off deals on Limited merchandise at The Greene Town Center in Beavercreek and Tri-County Mall in Cincinnati following the announcement. The Limited at the Liberty Center further south closed quietly on Dec. 21.
Earlier in December, the company announced more than 240 employee lay-offs at its headquarters in a Columbus suburb. The company alerted the Ohio Department of Job and Family Services of the 248 layoffs at the New Albany offices.
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Florida-based Sun Capital Partners has owned the specialty retailer since 2007, when the private equity firm bought the chain from L Brands.
The Limited, which did not return requests for comment, isn’t the only store to shut down several locations. Other stores, including American Eagle, The Children’s Place, Finish Line, Men’s Warehouse and Office Depot, have closed locations in recent years.
Back in May, Aeropostale sought Chapter 11 bankruptcy protection and announced the closure of 20 percent of its stores in North America, including eight in Ohio. The New York company said Wednesday that it is closing 113 of its 739 U.S. stores and all 41 locations in Canada. When the company announced the bankruptcy filing, its market capitalization had dropped to about $2 million.
At least two Aeropostale stores closed in the Cincinnati region, and the location at the Dayton Mall is in the midst of a rebranding effort.
“Such closures will help stem the debtors’ significant cash burn, increase the debtors’ liquidity, and allow the debtors to focus their reorganization efforts around a smaller footprint of more profitable store,” the company said in a statement.
Retail Metrics president Ken Perkins said foot traffic is even waning at brick-and-mortar retailers during the holiday season. Despite less inventory, retailers are still offering major discounts but selling less product. And websites like Amazon are benefiting most from the shift to mobile and e-commerce shopping, Perkins told the website RetailDive.
“Shopping online is more convenient than ever before — while traveling, emailing or relaxing at home, we’re seeing consumers of all ages researching and shopping for online deals,” said Pam Goodfellow, principal analyst at Prosper Insights & Analytics.
But brick-and-mortar stores still have an important role to play as hubs for e-commerce shipments and places where customers can have face-to-face conversations with company representatives. Retailers can keep customers coming, especially millennials, by making shopping a destination experience.
“Retailers have to give people a reason to physically drive there,” said Jason Dorsey, a Millennials and Generation Z researcher for The Center for Generational Kinetics.
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BY THE NUMBERS
• $13 billion spent online between Thanksgiving and Cyber Monday
• Amazon had 36.9 percent of the online holiday sales in 2016.
• 80 percent of Kmart's stores have leases that expire in next five years.
• 50 percent of Abercrombie & Fitch's 745 U.S. leases will expire this year.
Source: Adobe Digital Insights, JLL
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