History rare US apparel retail outlets will be closed
The retail industry in the United States ushered in a new wave of large-scale store closures. According to the data provided by CoStar Group to Bloomberg, more than 10% of the United States, or nearly 1 billion square feet of retail space, may need to be closed.
It is worth noting that clothing has become the biggest disaster area.
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Richard Hayne, CEO of Urban Outfitters, bluntly commented last month that in recent years there have been too many stores in the mall, and too many of them are selling the same thing, that is, clothing. "This creates a bubble. Like the housing market, this bubble has now burst," he said. “What we are seeing now is the result: the closure of stores and the reduction of rents. This trend will continue in the foreseeable future and may even accelerate deterioration.†Since last year, Urban Outfitters has continued to close stores and believes that clothing retailing is not as good as Catering sell home.
Under the fierce impact of fast fashion and e-commerce, the United States youth clothing brand is not spared. It is not a closed shop or a bankruptcy.
Since last year, at least eight youth clothing retailers filed for bankruptcy in the face of brutal competition and stagnant sales, including American Apparel, Aeropostale Inc, Pacific Sunwear of California Inc, Quiksilver, Sports Authority, The Wet Seal Inc. In the United States, it is increasingly difficult to do clothing business, American Apparel had a market value of more than 500 million US dollars is now worth only 88 million US dollars.
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The latest one is Payless, a US footwear retail chain that once had a ubiquitous presence. It filed for bankruptcy protection in the US court on Tuesday to restructure its North American operations and Hong Kong-based logistics and supply chain businesses. The company will be based in the United States. Wait for the closure of nearly 400 stores.
Juvenile clothing retailer Rue21 may be the next one. Informed sources revealed that this chain of approximately 1,000 stores is preparing to file for bankruptcy as early as this month. Just a few years ago, it was sold to private equity firm Apax Partners for about one billion US dollars.
The hard-hit US apparel retail industry is not limited to low-end brands, but also includes high-end brands.
Luxury brand Ralph Lauren announced on Tuesday that it will close the Fifth Avenue flagship store in New York and cut redundant employees. It is reported that Ralph Lauren's flagship store lease in New York will begin in 2013 with a lease period of 15 years and a total area of ​​38,000 square feet. The rent will be as high as $25 million per year. Stephen Stephanou, a partner at investment firm Crown Realty Services, said that Ralph Lauren’s high-profile store is sending signals to other US department stores and retailers, which means that the new round of store closures is about to begin. In the Group's 2016 fiscal year report, Ralph Lauren closed a total of 43 stores last year.
In addition, the performance of high-end apparel department store Neiman Marcus Group has been disappointing due to persistently low performance. The net loss in the second quarter has increased 20 times from the previous year's 7.9 million US dollars to US$171 million. The company confirmed that it will seek to sell and the Group’s valuation Also shrinking, investors have revealed that Neiman Marcus's current acquisition valuation may be only 60% of the year.
Surprisingly, the American designer brand BCBG Max Azria also filed for bankruptcy and planned to close all physical stores in the United States. Due to the recent negative changes in consumer demand, high rents and sluggish sales channels for wholesale channels, the annual sales of the brand have been reduced to US$615 million.
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“The industry is still looking for a breakthrough,†said Noel Herbert, an industry research analyst at Bloomberg. “I don’t know how many stores can be reborn.†The rapid closure of a large number of retailers has caused a large number of vacant shops in shopping centers, and the pain may have just begun.
The direct consequence of the disaster is that the sluggish retail industry has hurt employment. According to data released by the US Department of Labor on Friday, about 30,000 people were laid off in the retail industry in March, which is about the same as in February and the worst two-month performance since 2009.
Christian Booth, an analyst at Credit Suisse Group, said that the speed of the US store closure so far this year has exceeded that of the same period in 2008, that is, the time when the United States was in the last recession. He said in a report that the number of stores closed this year was about 2880, compared to 1153 in the same period of 2016. Based on this assumption, there may be 8640 stores closed in 2017. This will be higher than the record of about 6,200 set in 2008.
Worrying things include the department store industry, which has a large number of stores. In the context of a particularly grim situation in the department store industry, according to industry analysis, it is expected that the combined number of three department stores, Sears Holdings, Macy's and JC Penney, will exceed 500.
In order to reduce costs, some brands are planning to transform into pure e-commerce brands. Kenneth Cole Productions said in November last year that it will close almost all of its stores. Informed sources revealed last month that women's chain Bebe Stores Inc plans to take similar measures.
However, they must face a cruel reality that is difficult to compete with online market overlord Amazon.
According to fashion headline data, Amazon is dominating the US online sales apparel business, and more and more millennials are buying clothing on Amazon. In 2016, compared to other apparel retailers, Amazon consumers aged 18-34 (millennials) contributed the most clothing sales, and Amazon accounted for nearly 17% of all apparel online sales. Over twice the market share of the second Nordstrom sales. Although already in the lead, Amazon has been committed to the extension of the business, the company also introduced and continues to introduce its own clothing brand.
According to EMarketer's data, last year's e-commerce sales growth, Amazon exclusive 53%, only the remaining 47% share shared by all other businesses. For US retail workers, Amazon is a serious threat.
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Up to now, the market value of Amazon has reached US$427 billion, which has surpassed the sum of the eight largest US retailers. The eight traditional retailers are Best Buy, Macy’s, Target, JCPenney, Nordstrom, Wal-Mart, Kolts and Sears.
The purpose and frequency of U.S. consumers going to shopping centers today will be very different from those in the past. “The general trend in the fashion retail industry today is that consumers gradually lose interest in shopping in physical stores, whether they are in traditional department stores or other luxury boutiques,†said Karen Katz, CEO of Neiman Marcus Group.
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