A store stands closed near Wall Street as the coronavirus keeps financial markets and businesses mostly closed on May 08, 2020 in New York City.
Spencer Platt | Getty Images
One result of the coronavirus pandemic could be as many as 25,000 store closures announced by retailers this year, as the crisis takes a toll on many businesses, and already has pushed some over the brink and into bankruptcy.
U.S. retailers could announce between 20,000 and 25,000 closures in 2020, according to a tracking by Coresight Research, with 55% to 60% of those situated in America’s malls. That would also mark a new record — which was previously the more than 9,300 locations in 2019.
Coresight was earlier this year forecasting there could be more than 15,000 store closures announced by retailers in 2020.
A glut of vacant storefronts will leave landlords scrambling to fill those spaces or find new uses for their real estate. There are not many retailers still growing via bricks and mortar today. And if they are, many are looking to downsize to smaller shops.
In recent weeks, bankruptcy filings in retail have begun to mount. Coresight said it expects more liquidations, ticking up the closure tally. Department store chains Neiman Marcus, Stage Stores and J.C. Penney have filed for bankruptcy protection. So have the home goods chain Tuesday Morning and the apparel maker J.Crew. Some of these retailers will close some stores and begin operating again, but Stage Stores has warned it may need to shutter all of its stores if it doesn’t find a buyer.
Coresight has, so far, recorded a total of 4,005 announced closures by retailers in 2020, including more than 900 by the home decor retailer Pier 1 Imports, roughly 300 by the health chain GNC, more than 200 by Tuesday Morning, and some from L Brands’ Victoria’s Secret, Papyrus and Penney.
“We expect that a return to pre-crisis levels in offline discretionary retail sales overall will be gradual, as we expect consumer confidence, demand and spending to be short of normal for some time,” Coresight founder and CEO Deborah Weinswig said in the report.
“Given that recovery to pre-crisis levels may be gradual, retailers that were struggling to stay in business pre-crisis are unlikely to have the wherewithal to stay the course on the road to recovery and could end up closing a number of stores,” she said.
A separate report by eMarketer is forecasting total retail sales in the U.S. to fall more than 10% in 2020 and that they won’t bounce back to pre-Covid-19 levels until 2022. Meantime, eMarketer is calling for e-commerce sales to surge 18% this year.
It expects all categories within retail except for food and beverage, and health and beauty, to see sales decline due to the pandemic.
“This is the sharpest consumer spending freeze in decades in the US,” said eMarketer senior analyst Cindy Liu.
