Game Stop, New York & Co., and Papyrus On List Of Struggling Retailers
Mall owners are ending the year on a troubled note.
In 2019, more than 9,100 stores closed across the country, the highest number of any single year. Mall closures alone have reached 4,087 this year, a 140% increase year over year from the 1,696 closures in 2018, according to Bank of America. And, if interest rates have bottomed and are heading north, this too could be a headache for mall owners.
“Unfortunately the pace of closures has exceeded our expectations,” said Bank of America research analyst Craig Schmidt.
The larger-than-expected number of closures can partly be attributed to the rise of e-commerce. For the sixth straight year, U.S. consumers say online shopping has reduced their desire for mall shopping.
The firm expects e-commerce to outpace store sales by an average of 7 percent over the next five years, a trend it says is “most problematic” for retailers.
Rockland County has seen the shuttering of Macy’s, Sears, J.C. Penney, and in January, Lord & Taylor will darken its lights.
A raft of chains and big boxes including drug stores and supermarkets are closed or are in bankruptcy. Mall traffic declines have hurt a cross-section of specialty retailers. Three vulnerable retailers are Game Stop, which has three Rockland locations, and New York & Company and Papyrus, both with locations in the Palisades Center.
Services like buy online-pickup-in-store could help retailers differentiate themselves but analysts say it isn’t enough to increase mall traffic.
The American Dream Mall in Bergen County, NJ, will be closely watched, as its mix of entertainment, dining, and retail is said to be the panacea for dying malls. Recently the mall opened the country’s first indoor ski dome, as well as an amusement park. More than 450 retailers are slated to open in 2020.
Whether that mix of retailers will include some of the weaker ones remains to be seem.
Here in Rockland, we’re keeping an eye on struggling retailers.
Game Stop announced its plans to close up to 200 stores, after suffering from a 14.3% decrease in global sales during its second quarter. Even bleaker, Game Stop’s net sales fell nearly 26% year over year to $1.4 billion in the third quarter. Net loss for the period was $83.4 million.
The owner of New York & Co., RTW Retailwinds (NYSE:RTW) plans to close 27 stores after a disappointing third quarter. The company reported a net loss of $11.6 million from net income of $1.7 million in the third quarter. Net sales fell five percent to $200.1 million with a 4 percent decrease in same-store sales. Notably, the company saw a 4 percent increase in e-commerce to 36 percent of sales, up from 32 percent last year.
RTW operates 414 retail and outlet locations.
Meanwhile, stationery retailer Papyrus is trying to win rent concessions from landlords and could close some stores. The retailer, with 260 stores, has hired A&G Realty as it looks to negotiate with landlords, according to Debtwire. The news service reported that Papyrus “joins a host of financially strained brick-and-mortar retailers looking to renegotiate store leases as online competition eats away at their earnings.