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Retail Store Closures Soar In 2014: At Highest Pace Since Lehman Collapse
Zero Hedge ^ | 04/21/2014 | Tyler Durden

Posted on 04/21/2014 2:52:51 PM PDT by SeekAndFind

What a better way to celebrate the rigged markets that are telegraphing a "durable" recovery, than with a Credit Suisse report showing, beyond a reasonable doubt, that when it comes to traditional bricks and mortar retailers, who have now closed more stores, or over 2,400 units, so far in 2014 and well double the total amount of storefront closures in 2013, this year has been the worst year for conventional discretionary spending since the start of the great financial crisis!

From Credit Suisse's Michael Exstein

Since the start of 2014, retailers have announced the closure of more than 2,400 units, amounting to 22.6 million square feet, more than double the closures at this point in 2013 (940 units and 6.9 million square feet). After several years of attempting to cut overhead costs, the acceleration in store closures appears to be a response on the part of retailers to cope with the challenge of ecommerce and structural declines in foot traffic, and the need to address declining levels of in-store productivity. The year-to-date totals for store closing activities now challenges 2009 as the most recent year for the highest number of store closings announcements.

 

While distressed retailers (eg. Radio Shack) and bankruptcies, which have reached a three-year peak year-to-date, make up 63% of the unit closures in 2014, they comprise only 34% of the total square footage closed. On a square footage basis, broadline retailers  contributed over 28% of closures, with M, DDS, JCP, TGT, and Sam's Club participating in right-sizing their store bases.

 

Office supply stores have been equally significant contributors to the rationalization process as they grapple with the effects of broader distribution and deeper online penetration. We expect this trend to continue as Office Depot evaluates its real estate in the wake of its merger with OfficeMax. Even dollar stores and drug stores, which combined have consistently built out hundreds of stores per year, are beginning to reel back on expansion, with Family Dollar and Walgreens both planning to shutter  underperforming stores.

 

The acceleration in retail closings follows several years of negative sales growth for many retailers. After slashing expenses and taking a more disciplined approach to spending, there appear to be few levers left to pull, as the top line growth remains difficult. Mall-based stores (both department store anchors and specialty apparel) in particular appear to have taken advantage of leases that have come up for renewal, as opportunities to close underproductive stores. Those that have not participated in the trend to close stores—such as higher end retailers (eg. JWN, Bloomingdale's, and Saks)—have been relocating existing stores to more productive malls, or areas of existing malls. JWN for example recently announced the relocation of its Westfield Horton Plaza San Diego store to an upgraded area within the same mall, and is doing the same thing in Honolulu at the Ala Moana Center. 


Of course, it wouldn't be a Wall Street sellside piece if there wasn't a bullish spin on the data:

We would view more momentum in store closures as a positive for the retail industry. Retail as a whole remains overcapacitied.... further rationalization appears to be a necessary change in trend where even during good economic times the store base is being adjusted

Yup - nothing but blue skies ahead.

In fact, here is some more good news. As Bank of America notes, Consumer Durable spending - another key component of any, well, durable recovery - is founering. In their words: "Durable spending has had a very weak recovery by historic standards. The ratio of consumer durables to GDP shows that while the share of spending has recovered, it remains at recessionary levels."

Don't worry, that too is "positive" for the... making shit up industry.

Of course, who needs to spend on durables when one can just spend on stocks that in the new normal can never, ever go down?



TOPICS: Business/Economy; Society
KEYWORDS: economy; retail; retailstores

1 posted on 04/21/2014 2:52:51 PM PDT by SeekAndFind
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To: SeekAndFind

This is great news! Think of all of the people being released from “job lock”, and we all know that unemployment benefits are great for the economy, right? (/s)


2 posted on 04/21/2014 2:54:17 PM PDT by NEMDF
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To: SeekAndFind

I’m not surprised. This news comports with what I’m witnessing in my area.


3 posted on 04/21/2014 2:55:53 PM PDT by fwdude ( You cannot compromise with that which you must defeat.)
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To: SeekAndFind

Great news that people can’t afford dollar stores

/sarcasm


4 posted on 04/21/2014 2:57:34 PM PDT by GeronL (Vote for Conservatives not for Republicans!)
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To: NEMDF

Now they will have time to paint and stuff


5 posted on 04/21/2014 2:58:03 PM PDT by GeronL (Vote for Conservatives not for Republicans!)
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To: GeronL

Indeed. Free from the curse of job lock at last!


6 posted on 04/21/2014 2:59:09 PM PDT by Cyber Liberty (H.L. Mencken: "The urge to save humanity is almost always a false front for the urge to rule.")
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To: Cyber Liberty

7 posted on 04/21/2014 3:00:25 PM PDT by SeekAndFind (If at first you don't succeed, put it out for beta test.)
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To: GeronL

8 posted on 04/21/2014 3:01:42 PM PDT by SeekAndFind (If at first you don't succeed, put it out for beta test.)
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To: SeekAndFind
I live near a large and rather “upscale” mall not too far from Boston.A substantial number of their store plots (or whatever they're called) are empty today.This mall serves several of the wealthiest suburbs of Boston yet the fancy jewelry stores,women's clothing shops,etc are have shut down...even in the last 6 months.Even the Tesla dealership they have is absolutely EMPTY most of the times I pass it (I go there often to “power walk”)
9 posted on 04/21/2014 3:01:49 PM PDT by Gay State Conservative (Stalin Blamed The Kulaks,Obama Blames The Tea Party)
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To: Gay State Conservative

RE: .Even the Tesla dealership they have is absolutely EMPTY most of the times I pass it

Sheeesh, how many wealthy people do these Tesla folks think the area has who would want to buy their cars?


10 posted on 04/21/2014 3:03:10 PM PDT by SeekAndFind (If at first you don't succeed, put it out for beta test.)
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To: SeekAndFind
Is this number of closures net the number of openings and expansions? If not then it is really pretty much rubbish reporting.
11 posted on 04/21/2014 3:07:16 PM PDT by hinckley buzzard
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To: fwdude

Yup. Vacant storefronts are reaching epidemic proportions here (Buffalo, NY). A perfect marriage of internet shopping and Obama administration policies.


12 posted on 04/21/2014 3:09:23 PM PDT by fhayek
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To: SeekAndFind

You’d be surprised. I have a BIL who sells Lexus in SoCal. He’s doing fine.


13 posted on 04/21/2014 3:12:44 PM PDT by Cyber Liberty (H.L. Mencken: "The urge to save humanity is almost always a false front for the urge to rule.")
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To: GeronL

“Now they will have time to paint and stuff”

and fill out forms for public assistance.


14 posted on 04/21/2014 3:20:08 PM PDT by headstamp 2 (What would Scooby do?)
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To: Gay State Conservative

Legacy Place seems to be doing quite well,but Chestnut Hill——not so much.

.


15 posted on 04/21/2014 3:20:19 PM PDT by Mears
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To: SeekAndFind

:-( It’s not just “regular” retail (clothes, housewares, books, miscellaneous). I found out today the the tile supplier (Associated) I have always used has gone out of business. I’m sure the schmancy-fancy “showrooms” were what killed them.

In my fit, I started looking for other vendors I’ve used in the past & Salas wood products seems to be gone, too. Is Wilsonart next?

I’m p*ssed. How am I supposed to do my work? I really *need* the dimensional ceramic I’m looking for right now (similar wood appears to be 50 bucks a square), Wood would work, but not at that price.

(What’s really ticking me off is this pseudo opulence, “living at Versailles” mentality. WTH ever happened to normal? Even Lowes & Home Depot are caught up in it.) grrrr


16 posted on 04/21/2014 3:23:33 PM PDT by KGeorge (Till we're together again, Gypsy girl. May 28, 1998- June 3, 2013)
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To: fhayek
We're having grocery stores closing, so the internet trend isn't relevant in that aspect.
17 posted on 04/21/2014 3:24:21 PM PDT by fwdude ( You cannot compromise with that which you must defeat.)
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To: GeronL

And write cowboy poetry.


18 posted on 04/21/2014 3:29:05 PM PDT by Fledermaus (Conseravtives are all that's left to defend the Constitution. Dems hate it, and Repubs don't care.)
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To: SeekAndFind

Except for food, drug store and hardware store/home maintanance items, there’s very little worth buying in stores. There aren’t any around here that sell things that are high quality and individual. It’s all WalMart with a fancy label.


19 posted on 04/21/2014 3:29:10 PM PDT by grania
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To: Mears
Legacy Place seems to be doing quite well,but Chestnut Hill——not so much.

Haven't the first clue where Legacy Place is.Actually,it just occurred to me...is that that new complex right across from the Chestnut Hill Mall? I've driven by there but never stopped.I know that that's where the new Wegman's is...I *am* tempted to stop there.I recently drove by there and found the old Atrium Mall looking like Pompeii.That surprises me,having occurred in Chestnut Hill.And yes,It appears that the Chestnut Hill Mall has seen better days.

20 posted on 04/21/2014 3:31:41 PM PDT by Gay State Conservative (Stalin Blamed The Kulaks,Obama Blames The Tea Party)
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To: Gay State Conservative

Legacy Place is in Dedham, on the site of the old Dedham Cinema.

It is owned buy The Patriot Place people.

I shopped at Chestnut Hill for years and the last time I was there it was like a ghost town. Losing Filene’s seemed to have a huge impact.

.


21 posted on 04/21/2014 3:36:48 PM PDT by Mears
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To: SeekAndFind

Less competition leads to higher prices.


22 posted on 04/21/2014 4:42:10 PM PDT by PoloSec ( Believe the Gospel: how that Christ died for our sins, was buried and rose again)
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To: Fledermaus

Yup


23 posted on 04/21/2014 4:44:57 PM PDT by GeronL (Vote for Conservatives not for Republicans!)
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To: PoloSec

And higher prices lead to more competition...


24 posted on 04/21/2014 5:19:20 PM PDT by fhayek
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To: NEMDF

Wasn’t it Nancy Pelosi who said something about unemployment compensation bolstering the economy?


25 posted on 04/21/2014 6:58:37 PM PDT by Bon of Babble (The dogs bark; the caravan moves on!)
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To: Gay State Conservative

It’s even worse in California. Businesses are closing right and left.

There are MANY such empty stores in my upscale community - the local blockbuster just closed its doors across from a large Conway’s flowers building that’s sat empty for years.

I visited a friend near the coast and entire blocks were filled with empty stores. We ate at a restaurant that was on the outside of a large, entirely closed mall.

No one is moving into these buildings — and, as this is California, with a very hostile business climate, there won’t be any businesses moving in.


26 posted on 04/21/2014 7:01:27 PM PDT by Bon of Babble (The dogs bark; the caravan moves on!)
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To: fhayek

And gov’t regulation continues to stifle competition, the cycle will continue until global corporations have equal control with the gov’t, which IMO is the goal, two powerful entities battling for total control until the two morph into one.

Kind of like science fiction morphs into reality, right in-front of our eyes.


27 posted on 04/21/2014 7:57:49 PM PDT by PoloSec ( Believe the Gospel: how that Christ died for our sins, was buried and rose again)
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To: PoloSec

until global corporations have equal control with the gov’t,....

the two morph into one...like science fiction morphs into reality....


I believe that has already happened.


28 posted on 04/21/2014 8:36:54 PM PDT by reformedliberal
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