Feb 18 - American Retail Store Era Coming To An End, Look How Many Stores Closing.

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 5 years ago '05        #1
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Andrefrbk 1067 heat pts1067
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Feb 18 - American Retail Store Era Coming To An End, Look How Many Stores Closing.
 

 
Eight Retailers That Will Close the Most Stores


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It is the time of year again, when America’s largest retailers release those critical holiday season figures and disclose their annual sales. A review of these numbers tells us a great deal about how most of the companies will do in the upcoming year. And while successful retailers in 2012 may add stores this year, those that have performed very poorly may have to cut locations during 2013 to improve margins or reverse losses.

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 Inc. (BKS) 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.

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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.com Inc. (AMZN) 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.

Currently, the best example of a struggling retailer is J.C. Penney Co. Inc. (JCP). The department store chain’s third-quarter revenue dropped more than 26% year-over-year, and its same-store sales fell by about the same. With J.C. Penney’s e-commerce sales slipping by an ever greater amount, it was left with nowhere to go for bottom line improvement other than deep cost cuts.

Store closings can bring a retailer some relief and may not always portend its demise. Gap (GPS) announced in 2011 it would shutter 21% of its U.S. store base. It has since transformed itself into a much more successful clothing retailer. As the retailer completes the process of downsizing, its store operations likely will become even more efficient and its margins greater.

Very few retailers get into sudden trouble. Chains like Kmart and RadioShack Corp. (RSH) 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.

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24/7 Wall St. reviewed the weakest large U.S. retailers and picked those that likely will not be profitable next year if they keep their current location counts. 24/7 analyzed the retailers’ store counts, recent financial data, online presences, prospects against direct competitors and precedents set by other large retailers that have downsized by shuttering locations. We then forecast how many stores each retailer will have to close this year to sharply increase its prospects financially, even if some of those location closings do not occur for several years. These forecasts were based on drops in same-store sales, drops in revenue, a review of direct competitors, Internet sales and the size of cuts at retailers in the same sector, if those were available.

These are the eight retailers that will close the most stores in 2013.

1. Best Buy


REUTERS/Brendan McDermid
> Forecast store closings: 200 to 250
> Number of U.S. stores:1,056
> One-year stock performance: -36.8%

The holiday season was rough for Best Buy Co. Inc. (BBY). Same-store sales declined by 1.4% year-over-year, with international stores posting a 6.4% decline while U.S. same-store sales were flat. Companywide, the electronics retailer reported that holiday revenue had declined to $12.8 billion from $12.9 billion the year before. In the most recent completed quarter, during which same-store sales declined 4.3%, the company reported a loss of $0.04 per share. Best Buy has been plagued by customers “showrooming” — looking at products in the store and then purchasing them online — in recent years. Speculation persists that former chairman and founder Richard Schulze may buy out the company.

2. Sears Holding Corp.


AP Photo/Alan Diaz
> Forecast store closings: Kmart 175 to 225, Sears 100 to 125
> Number of U.S. stores: 2,118
> One-year stock performance: 8.8%

Both Sears and Kmart have been going down the tubes for a long-time, steadily losing their middle-income shoppers to retailers such as Wal-Mart Stores Inc. (WMT) and Target Corp. (TGT). Sears Holdings Corp.’s (SHLD) same-store sales have declined for six years. In the most recent year, same-store sales at the namesake franchise fell by 1.6% and at Kmart by 3.7%, compared to the year-ago period. The company is already in the process of downsizing its brick-and-mortar presence. In 2012, Sears announced it was shutting 172 stores. CEO Lou D’Ambrosio is leaving the company in February, to be replaced by chairman and hedge-fund manager Edward Lampert. Lampert has minimal operating experience in retail management.

3. J.C. Penney


REUTERS/Mike Blake/Files
> Forecast store closings: 300 to 350
> Number of U.S. stores: 1,100
> One-year stock performance: -53.6%

J.C. Penney has gone through a rough stretch recently. In the most recent quarter, same-store sales fell by 26.1% compared to the year-ago period. Even Internet sales, which are increasing significantly across the retail sector, have taken a turn for the worst, falling 37.3% in the third quarter, compared to the prior year. J.C. Penney sales have taken a turn for the worst since former Apple Inc. (AAPL) retail chief Ron Johnson took the helm at the company. Johnson’s plan, among others, has been to wean customers off of heavy discounting and simply give customers low prices. However, retail strategists and analysts have argued that Johnson’s plans have created confusion among customers and has been a further setback to any potential turnaround.



4. Office Depot


Jack Dempsey/Invision for Office Depot/AP Images
> Forecast store closings: 125 to 150
> Number of U.S. stores: 1,114
> One-year stock performance: 50.7%

Office Depot Inc.’s (ODP) troubles date back to years of competition against OfficeMax Inc. (OMX) and Staples Inc. (SPLS), as well as big-box retailers like Walmart. All three stores were dealt a blow from reduced business activity during the recession, as well as increased popularity of online retailers such as Amazon. The company’s North American division reported an operating loss of $21 million in the third quarter of 2012. Office Depot plans to relocate or downsize as many as 500 locations and close at least 20 stores. In the third quarter of 2012, the company closed four stores in the United States, and same-store sales were down by 4% year-over-year.

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5. Barnes & Noble


REUTERS/Mike Blake
> Forecast store closings: 190 to 240, per company comments
> Number of U.S. stores: 689
> One-year stock performance: 8.95%

The move by customers away from print books toward digital books has hurt Barnes & Noble Inc. (BKS). Same-store sales during the nine-week holiday season fell by 8.2% year-over-year. The bookseller has tried to offset the declines in physical book sales with its Nook e-book reader device, but sales of that device fell 13% compared to the previous year. The company already has begun cutting down the number of its stores in the past several years. In a recent interview with the Wall Street Journal, the head of the retail group at Barnes & Noble said he expected the company to have just 450 to 500 retail stores in 10 years.

6. Gamestop


REUTERS
> Forecast store closings: 500 to 600
> Number of U.S. stores: 4,471
> One-year stock performance: -2.2%

In November, just as the holiday season was in full swing, GameStop Corp. (GME) announced it would close 200 stores in 2013. The video game retailer, hurt by growth in mobile gaming at the expense of console gaming platforms, had a 4.6% year-over-year decrease in revenue, as well as a 4.4% decline in comparable-store sales over the nine-week holiday period. For the third quarter of 2012, the most recent quarterly release, gross profits fell at GameStop’s three core product segments: new hardware, new software and used products.

7. OfficeMax


Carlo Allegri/Getty Images
> Forecast store closings: 150 to 175
> Number of U.S. stores: 872
> One-year stock performance: 80.8%

OfficeMax, like rival office-supply stores such as Staples and Office Depot, has been hit hard by both online competition and lower sales for technology products such as personal computers. In the third quarter of 2012, OfficeMax reported that same-store sales in the U.S. fell by 2.6%. Midway through the fourth-quarter of 2011, the company announced that it would seek to close 15 to 20 stores every year for the next five years. In addition, the company has been in the process of downsizing its square-footage presence by moving into smaller locations.

8. RadioShack


AP/Lisa Poole
> Forecast store closings: 450 to 550
> Number of U.S. stores: 4,412
> One-year stock performance: -68.1%

Earlier this month, RadioShack’s long-term prospects as a viable company took another hit when its partnership with Target ended after neither side could come up with a mutually beneficial deal. The company had operated mobile kiosks at 1,500 Target locations across the country. Shares of the consumer electronics company are down by roughly 68% over the past year. The company recorded an operating loss of nearly $60 million in the third quarter of 2012. Same-store sales in the quarter dropped by 1.6% year-over-year. Revenue in the quarter fell by 3.8% year-over-year. Between 2010 and 2011, the company closed 2.2% of its existing locations — more than 120 locations in all.

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 Eight Retailers That Will Close the Most Stores - Yahoo! Finance

Its pretty much a wrap for retail stores here. Yet everything is fine according to Obama... I mean those hundred thousands in job losses when they close wont mean anything, economy is improving image

Every seasoned economist is pointing towards an economic collapse this year, if this isnt a sign i dont know what is. Manufacturing is gone, and now retail is leaving. If people simply arnt buying, and when they do its from online stores. Whats going to happen to all of those people who would serve customers? They are out of a job, where will the jobs to replace the losses come from?

Bottom line these are scary times, stack paper outside of banks, buy gold/silver, gun ammo, and canned food non perishables etc. If you know your history, this is 1930s all over again, PREPARE YOURSELF. Good luck.

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Last edited by Andrefrbk; 02-18-2013 at 02:56 PM..

66 comments for "Feb 18 - American Retail Store Era Coming To An End, Look How Many Stores Closing."

 5 years ago '05        #2
Andrefrbk 1067 heat pts1067 OP
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I guess i got time to rant a bit more on this fu*k it.

Yo anyone noticed you go to a big name retail supermarket right... What do you see at check outs now.

YOU DONT EVEN SEE PEOPLE WORKING. Now its like 1-2 cashiers, and 3-4 self checkout lines. The sad shiit is people actually prefer self checkout because they can ring the shiit up quick. I never use that fukery, id be supporting it which i never will.

I went to best buy the other day to buy some duster air, i couldnt even find help. I used to work for bb i never seen it that bad. And i worked there during the crash of 2008!!

New latest trends sweeping across America, MALLS CLOSING, SHUTTING DOWN FOR GOOD. You see all these big malls with stores shutting down, and forcing them to figure out a plan to wrap it up.

Malls were the future we thought 50 years ago, so we kept building them bigger and bigger. Now look, no one goes to malls. Malls are such an inefficient way to shop now.

The system is collapsing before our eyes, manufacturing is gone, retail is going, online retail is down but picking up because of offline retail failing. People dont have the purchasing power to keep these stores going.

If retail goes what do we have left for young people? Non professionals, those who are displaced because of not being able to find a job in their field? Hmm.
 02-18-2013, 02:50 PM         #3
Tyrant Noir 
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Well said
 5 years ago '05        #4
Andrefrbk 1067 heat pts1067 OP
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 Tyrant Noir said:
Well said
Thanks brah.


Listen yall...
People need to keep in mind this is just 8 stores. ONLY EIGHT! Imagine how many other chains are shutting down. The other night i drove by burger king and a kfc near by my crib shutting down. These places have been around since i was born. Changed owners a couple times, but now its done for good. I notice shutters down the strips in brooklyn now, middle of the day and nothing but closed store shutters.

Yo, lol i seriously cant understand how people are blind to the situation we are in. It can only get worse under a president and congressional leaders who dont want to fix it. Keep thinking shiit is sweet. We are now over 50 mil soon 60mil on food stamps. over 1/3 of the population is no longer working, if this isnt great depression i dont know what is. I guess when unemployment reaches 30% and the government is telling them its only 9% people will start to see it.
 5 years ago '07        #5
Ham Rove 3511 heat pts3511
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I even saw walmarts profits done first quarter, no store closings yet but still kinda odd.
 5 years ago '07        #6
j_k1dd 8 heat pts
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Adjust to the change, it was only a matter of time technological advances started freeing up more time for us humans.

Forget holding on to the idea that you "need" humans standing in malls and working to scan your material things. There is no use in using this newly found spare time complaining about the system collapsing. It is time to start looking within yourselves to find what you can bring to the table. It's time to start thinking what your role is.

The people that got people out of the depression wasn't concerned about trying to uphold a crumbling system, they was trying to build anew.


Last edited by j_k1dd; 02-18-2013 at 03:25 PM..
 5 years ago '04        #7
abstractq 5 heat pts
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if malls are inefficient then they need to go anyway

suprised more department stores arent closing. . .macy's, dilards, bloomingdales. . .i never see n*ggas in those spots

all about that ecommerce. online sales growing like 15% every year
 02-18-2013, 03:25 PM         #8
killya 
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so much for the economy improving. No president can turn this sh*t around.
 02-18-2013, 03:41 PM         #9
Tyrant Noir 
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 killya said:
so much for the economy improving. No president can turn this sh*t around.
The creation of new jobs for the masses is an illusion. It's just playing with the numbers and creating jobs that don't have legs at the unemployment office. Also big government jobs that most people in the US cannot get. All a shell game sh*t is about to get real fu*ked up.
 5 years ago '10        #10
Hovi Bryant 676 heat pts676
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Gonna have to call OP a bit naive.

There was a time where corporate CEO's, managers, and employees lived not too far from one another. Today, the big wigs live on remote islands with bank accounts in other countries.

Democrats want to cut that sh*t out and the big businesses say, "well now that I have to pay you more, I'm going to shut down a store", instead of cutting their own pay and benefits.

Why do the employees get paid like sh*t or forced to take paycuts when these fat n*ggas give themselves raises and vacations for doing relatively nothing?

You want to blame Obama? Fine, but I'm all for making life much more proportional than what it is right now.
 5 years ago '05        #11
autoraptronix 11 heat pts11
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 Andrefrbk said:

Every seasoned economist is pointing towards an economic collapse this year, if this isnt a sign i dont know what is. Manufacturing is gone, and now retail is leaving. If people simply arnt buying, and when they do its from online stores. Whats going to happen to all of those people who would serve customers? They are out of a job, where will the jobs to replace the losses come from?

Bottom line these are scary times, stack paper outside of banks, buy gold/silver, gun ammo, and canned food non perishables etc. If you know your history, this is 1930s all over again, PREPARE YOURSELF. Good luck.
what? stack food because best buy might close some stores?? stop listening to people who profit off of fear and uncertainty.
 5 years ago '04        #12
dj X 33 heat pts33
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fu*k it.



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If this place ever closes down, I will shoot myself...


Premier Adult Factory Outlet.. O-town heads know what i'm talking about



Last edited by dj X; 02-18-2013 at 04:44 PM..
 5 years ago '05        #13
Andrefrbk 1067 heat pts1067 OP
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 autoraptronix said:
what? stack food because best buy might close some stores?? stop listening to people who profit off of fear and uncertainty.
SMFH, stack food because of hyper inflation and devalue currency.

Are you a fu*king moron?

Have you been to the supermarket lately? Do you even buy your own food or does your mommy do it for you?

Hey man get the fuking c*m out your eyes maybe you will see better, stop standing infront of govts officials c*cks.


Have you noticed how food production is affected by our weather? Have you noticed how food prices have gone up production down?

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Low food production in some areas + low wages... Hmmm ever heard of inflation?

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)

Hey man you better start using your head and think for yourself. Stop listening to what the majority tells you. That kind of thinking will get you k!lled, see the titanic for reference.

Edit.

Yo bro run your fat a.ss to the store really quick, tell me the price of milk now, tell me how much it was 5 years ago.


Last edited by Andrefrbk; 02-18-2013 at 06:10 PM..
 5 years ago '12        #14
SHADOW 326 heat pts326
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It's all about online

Amazon and Google will eventually take over 90% of all things
 5 years ago '12        #15
Phuck Yiu 34 heat pts34
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im surprised sears hadnt closed down already, no one ever goes there.
 5 years ago '11        #16
UrbanGAAWD 209 heat pts209
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Well there's stores like Starbucks and Apple who are opening more and more stores......I'm not an expert on this particular matter but whatever these stores are doing, then they need change their sh*t...whether it be increase online stores or cutting off too many stores in one location...where I live at, there's probably 8 best buys within a 15 mile distance
 5 years ago '08        #17
arthurmack27 8 heat pts
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i think its a lack of innovation. the products are evolving yet the retailer isnt. when you fail to evolve, you open the door for other innovative entrepreneurs.
 02-19-2013, 01:06 AM         #18
Lazy Mikey 
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Technology is eliminating a lot of jobs. I know theres a new thing in the works to make cashiers basically non existent. Put all your sh*t in a cart and as you walk out the door it scans your entire purchase with a new type of bar code and sends the bill to your house. You either swipe your card on the cart or stores will have their own member cards to scan to bill you. Obviously they'll need at least 1 cashier or self check out for cash transactions, but in time people won't want to wait in line and give in to the card. It's all sensored too, so say you think you're being swift by not swiping your card and just filling up the cart, try to walk out the door and it wont open, or theres theft of cards but each exit will have a high quality camera on it... pretty cool, dude that lives by me is creating it. Has pretty big investors, let alone his own money.
 5 years ago '04        #19
WhoThaFuk 2 heat pts
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I haven't bought anything from Best buy in 6 years. I stopped shopping in stores in general around 4 years ago. I have a busy schedule during the day so I don't have the time to travel from place to place especially when everything is available from my laptop or tablet. I'm looking into doing my food shopping online too.
 5 years ago '10        #20
ghettofire 3 heat pts
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Targets doin alright
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