When it comes to store closings, 2020 was a year for records.
Ravaged by a pandemic that closed stores for weeks in the spring, resulting in more online spending, retailers large and small closed 12,200 stores in the United States last year, according to a compilation released Wednesday by the commercial real estate company CoStar Group. In all, this represented 159 million square feet of retail space. In 2019, the total was 10,000 stores.
Some of the bold retail names that closed stores in large numbers last year include JC Penney, which filed for bankruptcy in the spring and emerged with a fraction of its store count just a few years ago, GameStop, The Difference, and Macy’s. A lot of the closures were from retailers who closed completely last year, like Pier 1 Imports and its 950 stores.
The pain was concentrated among mall retailers, who struggled long before COVID-19 hit the ground running. CoStar estimated that a third of store closures were at department stores, clothing chains or other mall-focused businesses, which only account for around 8% of total retail revenue.
At the onset of the pandemic, some large retailers like Walmart, Costco and Target, as well as drugstore chains CVS pharmacy and Walgreens were deemed essential by authorities and allowed to remain open, giving them an edge over the likes of Macy’s, Kohl’s, Nordstrom and Abercrombie & Fitch.
While these companies have weathered the storm so far, the pressure has pushed many shaky retailers over the edge and led to a record number of bankruptcies in 2020. Tuesday, S&P Global According to Market Intelligence, U.S. corporate bankruptcies peaked last year with 603 companies, including 125 consumer goods and retailers. This included Penney, J.Crew, and the parent companies of Ann Taylor and Men’s Warehouse, among others, adding to the carnage.
But even successful businesses have halted their plans to expand the store base. Old Navy and Ulta Beauty, for example, are recovering well from closures and still plan to open hundreds of more stores in the coming year, but are now giving themselves more time to do so.
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