10,000 Stores Doomed To Close In 2021, Coresight Projects
About 10,000 stores will close nationwide this year, according to a new report by Coresight Research. That would set a record for retail closures in a calendar year, besting the 8,741 closures in 2020, when the coronavirus pandemic accelerated already-grim circumstances for the retail industry.
The 2021 closures would represent about 138.5M SF of retail space vacated, Coresight estimates.
The drumbeat of closures has already gotten off to a strong start. As of Jan. 22, U.S. retailers announced 1,678 closures, Coresight reports. These include larger stores, such as JCPenney, Macy's and Bed Bath & Beyond, but also a contraction in small locations like 7-Eleven, which will close 300 stores, and Family Video, which will close 250.
"Store-based retail was heavily impacted by the COVID-19 pandemic in 2020, particularly in discretionary categories, resulting in widespread closures," the report notes, adding that Coresight expects that the fallout will be even greater in 2021.
“It seems inevitable that there will be more retail bankruptcies in the months ahead, including some household names,” Allen & Overy partner Dan Guyder told Forbes. “Some of these were bound to happen with or without the pandemic, but that disruption accelerated the process.”
Last year saw 33 major retailers file for bankruptcy, each precipitating closures. So far this year, three major retailers have filed: Christopher & Banks, which will close most of its 449 locations; Godiva Chocolatier, which will close all of its 128 North American stores; and department store Belk, which hasn't announced closures yet.
Last year, 3,151 closures were in the apparel, footwear and accessories sector, far more than any other kind of retail, according to Coresight data. The second-hardest-hit sector was home and office retailers, with 1,428 locations shuttered, and just below that were department stores, 1,347 of which closed.
Ascena Retail Group accounted for the largest number of closures by a single company in 2020, with 1,156 of its stores vanishing. The company's brands include Ann Taylor, Catherines, Justice and Lane Bryant. Other major closures last year came from Modell's Sporting Goods, Tuesday Morning, Foot Locker and Gap.
Even though a massive number of stores are expected to close this year, there will continue to be openings to partly offset them. Coresight estimates that between 3,500 and 4,000 new U.S. stores will open in 2021. In 2020, there were 3,304 openings.
"In 2021, some retailers are likely to be more confident (relative to 2020), given improvement in the economy and consumer confidence and the rollout of vaccines," the report stated. "As such, we estimate a slight increase in openings this year, albeit weighted toward the second half."
The openings will reflect a shift in consumer habits, however. That was the case in 2020, when more than half of the new stores (1,669 locations) were discounters, which includes dollar stores. Last year, Dollar General, the largest dollar store chain, opened 986 locations, while Dollar Tree and Family Dollar opened 319 and 177 stores, respectively.
Though badly hit as a sector, there were apparel store openings in 2020 as well, and they tended to be discounters too. In that sector, Ross Stores and Burlington Stores opened more locations than any other brand: 66 and 62, respectively.