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Retail Is Still A Mixed Bag Of Bankruptcies, Closures & Openings, Depending Upon the Chain, Location
After closing stores, making job cuts, and attempting to raise additional emergency financing, Bed Bath & Beyond Inc. two weeks ago filed for Chapter 11 bankruptcy protection. The filing surprised almost no one. The 52-year-old home goods chain — one of the original big-box retailers and so-called “category killers”— has been inching toward bankruptcy since January.
In a statement, Bed Bath & Beyond said that it filed for Chapter 11 “to implement an orderly wind down of its businesses while conducting a limited marketing process to solicit interest in one or more sales of some or all of its assets.”
Bed Bath & Beyond will begin closing its 360 namesake stores and 120 BuyBuy Baby stores as it looks to sell parts of its business. The company noted in its filing that it has sought to sell itself since last year, to no avail. Rockland County’s two Bed Bath & Beyond stores pre-deceased this final retail death spiral long before now.
Foot Locker, another company retail analysts are watching with concern, has a new plan to move the company forward, which includes some major changes in its store portfolio. As part of its new “Lace Up” plan, the athletic footwear giant is transforming its real estate footprint by shifting to off-mall locations and opening new formats. It also plans to close some 400 mall-based stores by 2026, including 200 locations in C and D malls and 200 underperforming stores in A and B malls. The store closings include some 125 underperforming Champs Sports stores, which will shutter in 2023.
Foot Locker has a presence in The Palisades Center in West Nyack.
Tuesday Morning, which does not have a New York presence, will close more than 250 stores this year. A&G Real Estate Partners is auctioning off leases to the stores, which are 10,000 to 20,000 square feet. The off-price home goods and décor chain entered Chapter 11 bankruptcy protection for the second time in three years. No date has yet been set for the bidding.
Retailers like Sears (also long-gone from Rockland County, with its buildings awaiting a buyer or new tenant), Bed Bath and Beyond, and David’s Bridal, which will close stores in in Middletown and Yonkers, are making attention-grabbing headlines with bankruptcy filings and store closures.
The bridal retailer operates more than 290 stores across the country, but all are under threat of closure unless a buyer emerges to save the chain from its financial woes.
Is this the Retail Apocalypse 2.0 or something else?
It feels a bit like the pre-Pandemic era when the signs of a big-box retail closures were rife. But the National Retail Federation says so far in 2023 more stores have opened than have closed. Retail experts say shoppers still clamor for the brick-and-mortar experience despite the explosion of online retailing. Rockland County’s Route 59 corridor is a mixed story. The Shops at Nanuet are still underperforming and shopping centers like Rockland Plaza have moved toward discounters. But in general, vacancies appear to be low.
In 2023, the National Retail Federation tracked 2,700 new stores opening compared to 1,800 closings. Retail analysts say brick-and-mortar has its place in the online shopping paradigm. Often customers purchase online but pick up from stores.
The Federation predicts a 4 percent to 6 percent growth in retail sales in 2023.
Still Business Insider reports that 800 retail stores are slated to close this year. The list, which includes Bed Bath and Beyond and Tuesday Morning, also cites Party City, which has put twelve locations up for auction due to bankruptcy, seven Walmarts, a handful of Big Lots!, Banana Republic, and the RealReal. Macy’s still plans to shut down 125 stores in the next three years.
In May, Target is closing down four stores that are not meeting financial expectations.
Jenny Craig will close its 500 company-owned and franchised stores in the United States and Canada after four decades in the weight loss and nutrition business, according to NBC News, due to its “inability to secure additional financing.”
Realtors also say dark holes left by shuttered retailers are not the dire problem they once were. Chains including TJ Maxx, HomeGoods and Ross have been filling vacant stores. Burlington, Five Below, Nordstrom Rack and budget gyms like Planet Fitness are also scooping up the spaces in strong retail corridors.
Retail analysts say demand is strong because of a perfect storm: a slowdown in commercial construction since the 2008 financial crisis, rising interest rates, low inventory. New commercial retail real estate construction reached a new low in 2022 for the third consecutive year, according to CBRE. And retail space vacancy rate fell to 4.9 percent at the end of 2022 – the lowest level since CBRE began tracking the market in 2005.
Behemoth’s like Bed Bath & Beyond have fallen but retail analysts see growth in the discount segment as shopper continue to feel inflationary pressure. Physical store openings surpassed closings in 2022 for the first time since 2016, according to Coresight Research.