Chasing the Customer … But to Where? Chapter 2

Everything Must Go!

Look for a lot of Brick and Mortar store closings over the next few years. A changing consumer, product obsolescence, too much retail space, mall-aversion, lack of niche or competitive advantage and the internet are all driving forces.

Recent examples:

  1. Staples announced they are closing 200 stores citing the fact that over 50% of their sales are now online.
  2. Radio Shack announced the closing of 1,000 stores (yep, that’s a correct number). The CEO said the company is ‘broken’.
  3. Dots, a women’s clothing chain, filed for bankruptcy and will close all 300 stores.
  4. Safeway will be acquired by Albertson’s in a $9 billion leveraged buyout. Expect store closings as the  merger / consolidation takes place.

Keep an eye on Sears, KMart, Office Max, Office Depot, Game Stop, Best Buy, Aeropostale and Barnes and Noble.

On January 24th, 2014, I included the following paragraph in Chasing the Customer … But to Where?

‘Drastic downsizing is about to happen. John Kernan, Coven & Co believes that shoppers are likely to see an average decrease in overall retail square footage of between 1/3 and 1/2 within the next 10 years. Sears has already closed 300 stores since 2010. J.C. Penny and Macy’s have also announced multiple closings. Impact example? Perhaps no retail niche is more relevant to the dynamics of change than book retailing. Anybody seen a Border’s Bookstore lately?’

Read the Staples and Radio Shack stories below. They give a pretty good synopsis of what’s ahead for many brick and mortar retailers.

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