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6 Brands Closing Stores in 2013

02/07/2013

16412581_BG12013 will go down in the books as the year of store closings.

This year consumers will see venerable brands like Sears, JCPenney and Best Buy shut down and shutter up hundreds of stores.

And the question remains…will we even miss them? I suspect not.

For many retailers, the sales situation is so bad that it is not a question of whether they will cut stores, but when and how many. Most recently, Barnes & Noble decided it had too many stores to maintain profits. Its CEO recently said he plans to close as many as a third of the company’s locations.

Several of America’s largest retailers have been battered for years. Most have been undermined by a combination of e-commerce competition, often from Amazon and more successful retailers in the same areas. Borders and Circuit City are two of the best examples of retailers that were destroyed by larger bricks-and-mortar competition and consumers transitioning to online shopping. These large, badly damaged retailers could not possibly keep their stores open.

Store closings can bring a retailer some relief and may not always portend its demise. Gap announced in 2011 it would shutter 21% of its U.S. store base. Since then its business has been revitalized. Same with Starbucks.

Very few retailers get into sudden trouble. Most often poor management and marketing can be identified as the source of a retailers problems. Chains like Kmart and RadioShack have struggled for years just to stay in place. Their brands have lost much of their luster. Their stores have become old and their locations no longer attractive. The consumer’s perception is that the products they sell can be found elsewhere, usually at a cheaper price, and at retailers with better customers service and wider selections of products.

Here is a short list of big brands that will close stores in 2013:

Best Buy – Forecasted to close 200 to 250 of their 1,056 stores in the US.

Sears Holding – Forecasted to close 175 to 225 Kmart’s and Sears 100 to 125 of the 2,118 US stores.

JCPenney – Expected to shutter 300 – 350 of its 1,100 stores.

Office Depot – Closing 125 – 150 of its 1,114 stores in the US.

Barnes and Noble – has stated it will close 190 to 240 of its 640 stores.

Radio Shack – Planning to close 450 to 500 of its 4,400 stores.

Hindsight is always 20/20 but the over building of stores in the 1990’s was not sustainable. The joke about there being a Starbucks inside a Starbucks was nearly true.

Retailers today must do two things to survive and thrive in the years to come:

  1. Think and act like merchants. Sell, add value, be unique, take care of your customers, value your employees, be bold with product and how you sell it
  2. Be future oriented. Business models are changing – rapidly. Create a department of future trends. Stay on top of mobile, social media,  Be innovative, but test, test and test again

Last of all retailers need to flush the investment guys, PE guys and non-merchants out of leadership roles. Instead fill the ranks with skilled merchants who know how to sell product. Merchants are a special breed. Don’t let their skills go to waste.

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