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Despite the resilient performance of the beauty retail sector this year, Sally Beauty is shutting down hundreds of locations.
The Texas-based chain expects to close 350 of its Sally Beauty Supply stores by the end of the year, as well as distribution centers in Oregon and Pennsylvania, Chain Store Age reports.
The company’s executives announced the closures as part of an optimization plan that it expects to save $50M in expenses next year. The company, which operates 4,500 stores in North America and 5,000 worldwide, took a $45.5M write-down in its fourth quarter as a result of the move, which will largely affect U.S. stores.
Its sales were down 2.8% from the previous quarter and flat from last year.
Sally Beauty is contracting despite a time of resurgence for many of its competitors. Foot traffic at beauty retailers was up by 33.3% this summer compared in 2019, according to a study conducted by retail monitoring firm Placer.ai and reported by Vogue Business.
Ulta Beauty announced last year it plans to open 50 new stores annually, and partnered with Target in February for 250 locations inside the department stores.
Beyond the beauty category, retail spending overall has stayed resilient despite months of inflationary pressure. Retail spending was up nationally in October by 1.3%, beating analyst expectations, according to new figures released by the U.S. Commerce Department Wednesday.
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