February marks the time each year when America’s largest retailers disclose their holiday and annual sales. These reports are important because they are usually a pretty good indicator of how well the company will do in the upcoming year. 2012 looked great for many companies who will be adding new locations in the upcoming year; however, it seems that some major retailers haven’t quite been able to shake the remnants of recession-reduced shopping habits. So here’s a rundown of some of the largest stores that are expected to be closing many locations in the upcoming 2013 year.
Best Buy
Forecasted store closings: 200 to 250
This gadget and techie giant will be closing over 200 stores this year due to the company’s massive drop in sales. According to a Yahoo finance article, Best Buy has been a victim of the phenomenon of “showrooming,” which is when customers browse products in-person at the store, but then purchase online where it can be found for cheaper.
Sears Holding Corp.
Forecasted store closings: Sears 100 to 125 and Kmart 175 to 225
In the past five years, Sears and Kmart have been struggling to keep up with competitors such as Target and Walmart that are often able to offer the same products at much reduced prices.
Barnes and Noble
Forecasted store closings: 190 to 240
Barnes & Noble Booksellers will also be closing over 200 stores, which is just shy of 30 percent of its total 689 stores nationwide. This massive bookstore chain has been struggling in the last few years, already having shut down hundreds of locations. Barnes & Noble represents the all too common dilemma that brick-and-mortar stores across the country face in which customers have switched to online purchasing from websites such as Amazon.
J.C. Penny
Forecasted store closings: 300 to 350
Profitability issues have plagued J.C. Penny for years now. Most recently they hired Ron Johnson, of Apple fame, to completely revamp the retailer’s overall strategy, changing everything from pricing to implementing in-store makeovers. However, even with all these new changes, Penny’s has struggled to keep up with other department stores and is predicted to close over a third of their U.S. locations in the upcoming years.
Office Depot
Forecasted store closings: 125 to 150
Office Depot and its competitors such as Staples and OfficeMax saw business suffer massively during the recession, making competition for customers all the more cutthroat. Office Depot reported an operating loss of $21 million dollars in the third quarter of 2012, which has led the company to make the decision to close at least 20 stores so far.
Radio Shack
Forecasted store closings: 450 to 500
Radio Shack has had a difficult time recovering from the recession. To make matters worse, the company just recently ended its partnership with Target when neither side could formulate a mutually beneficial deal to extend the contract. Again, the company has been a victim of the Amazon effect, as more and more customers turn to the Internet to complete their online shopping, particularly for gadgets and technology.
Sources:
http://www.reuters.com/article/2012/01/25/us-jcpenney-idUSTRE80O1HG20120125