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Retail Store Closings
Old 01-05-2017, 06:12 AM   #1
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Retail Store Closings

You may want to Google "Store Closings" for the latest information.
Sears will close an additional 150 stores in 2017, and Macy's 68... other major retailers have not disclosed specific plans, but we can expect many more major chains to leave unprofitable stores and accordingly to leave tens of thousands of employees without jobs. Macy's alone plans for a reduction of 10,000 in their sales force.

The ramifications of this are so far reaching as to be the the subject of a major study into this aspect of the U.S. economy. It is too simple to address this social and economic change as an effect of the rise of online shopping, ala Amazon.

The cost of retailing is first and foremost a result of inefficiencies of scale, where each store is required to stock lines of goods to be available at the point of sale. Thus, for instance... one style of a ladies bathing suit might require 3 in size 9, 5 in size 11, 8 in size 12 etc, etc... That's just one style. Multiply that by three different colors, and maybe 6 different sytles, and you have a huge iinventory of one item in one store.

Most of the older stores receive merchandise from different manufacturer, so the shipping and handling is very expensive. Walmart took the big step in the 1970's of establishing huge warehouses to service stores in a wide geographic area... centralized to receive all of the inventory, then to send out in individual trucks to tens or dozens of local stores. This, along with the computerized inventory that allowed a one on one replacement... daily, allowed economies of scale, which also allowed for a major reduction of inventory (think those bathing suits)....

Most of the major chains did not follow Walmart, but remained in large malls, continuing to build and expand, but at the same time, with rising costs. the peak of the Mall came (IMHO) in the early 1990['s, with a very rapid decline in the last 5 to 10 years. Many malls are now mere shells of what were the glory years.

Downsizing chains to retain profitability is a short term solution. The cost to effect the "economy" of relying on the profitable store is incredibly high. Not only the losses on inventory, but the continuing cost of employee benefits, less efficient advertising, central offices and support of all functions of accounting, transportation, buying, management, signing and dozens of other necessary central controlled operations... All of these are ongoing, reduced in cost, but losing the economies of scale.

A very major ongoing cost is that of long term leases... some as long as 20 years, with small likelihood of finding replacement store to take over 100,000 to 200,000 s.f. of space. Thus the ghost malls.

It's not just Macy's, Sears, KMart and Kohls, but almost all major retailers under fire. You will probably remember many that have closed, but it's only when you see listings of defunct retailers, that the awesome breadth of change becomes clear. Try this list from Wikipedia, to see the store brands that have disappeared.

https://en.wikipedia.org/wiki/List_o..._United_States

What does it mean to us? Yes, of course, just a part of change. A shift of what we do and where we spend our time. It only takes a few minutes of imagining to see how this will affect us all, if not this year, at least in the next ten years. Some retailers will stay, and take up the slack, but we'll continue in a slow moving change, in the lower wage jobs, and in the social structure where Malls have become centers of the social part of our lives.

My take, upon reflection of my career in retail.
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Old 01-05-2017, 06:29 AM   #2
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I rarely go to big box retail or what folks refer to as department stores. I buy my shoes, clothes, sporting equipment all online and mostly at steep discounts to retail. We are over retailed IMHO. I am 53 and most that I know younger than me shop retail even less than I do.
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Old 01-05-2017, 06:31 AM   #3
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DW and I commented last time we were on the mainland that the malls were ghost towns compared to what we remembered. Here in Hawaii (Oahu), malls are still reasonably robust operations, but they have only been able to stay that way by squeezing out the old standbys and replacing them with high-end stores - aimed primarily at international tourists. Our local Sears had a huge store in the largest mall (Ala Moana Mall). It is now gone and the mall took the opportunity to spruce up the whole mall, add parking and add even more high-end stores. I assume the rents have gone up as well. So far, the gamble seems to be paying off as Ala Moana is packed with tourists. I try to avoid the place as it has nothing I want (other than a couple of restaurants).

There are still some internet stores that either do not ship to Hawaii or that charge extra (Amazon is not one of them.) I suppose the extra shipping costs on some items encourage "local" shopping vs. more internet shopping. Still, I think we (Hawaii) are just a few years behind the rest of the US in seeing the end of the Mall experience. Of course, I could be wrong. I was once, so YMMV.
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Old 01-05-2017, 06:37 AM   #4
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I was in very few retail locations this past holiday season, but I did visit two different Eddie Bauer stores. In both cases the sales person suggested that if I couldn't find just what I liked, they could happily help me place an online order. I think "retail" locations might gravitate towards "showrooms". JMHO.
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Old 01-05-2017, 06:54 AM   #5
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I think I went to my local mall one time last year. Just too easy to order stuff online. There is an outlet type mall on the coast I frequent when I'm down there. Lot's of stores with good selections at reasonable prices. Always better to see a clothing item in person before buying imo.
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Old 01-05-2017, 07:23 AM   #6
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There's an interesting site called deadmalls.com that probably lists malls familiar to everyone here. I know I've visited a few.

Interesting coincidence: this morning I ordered a platinum chain off e-Bay. I wanted platinum because it will hold some extremely important keepsakes (late DH's wedding band, ate mother's HS class ring, etc.) and platinum is least likely to break. Not only is it hard to find in jewelry stores, but in this area the one I'd trust is in a district with a sales tax of over 9%.

I still like to see and try on clothes before I buy them but I don't buy many these days. I've also got a good stash of dress shoes that will last for years and am likely to need only replacements of my athletic shoes and Birkenstocks in the next 2-3 years. So, I rarely visit malls, either. The clothing they have there is mostly aimed at 20-somethings. I'm almost 64 and in better shape than most 20-somethings but I cannot wear flimsy fabric, spaghetti straps, or pants cropped just below the knee which will make anyone's rear end look fat.

On-line shopping really has changed the way we live.
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Old 01-05-2017, 07:30 AM   #7
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I do 99% of my shopping online when I am home but when on vacation we often do a fair amount of retail damage. To Koolau's point above Ala Moana is a big, beautiful and very busy mall in Honolulu. It's packed whenever we have been there. Another nice looking mall, with a new Macy's even, is opening on the other side of the island in Kapolei. However, here at the home the mall is just for walking on cold weekend mornings. Lol.
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Old 01-05-2017, 07:36 AM   #8
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We shop online but still go to walk the Mall in winter for exercise. It is a very popular place for retirees in the north.

Though we keep the UPS guy busy with Amazon boxes I still like to go touch and feel some stuff before buying online.
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Old 01-05-2017, 07:43 AM   #9
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Good...let them all close down for all I care. Shopping malls are a thing of the past. Look around...what do you see now? Its all outdoor shopping centers. You'll see a dickssportinggoods, costco, tj maxx, khols, bestbuy, lowes or home depot, walmart, etc etc. Those stores are always bunched together. Why? because they offer everything anyone wants.

Sears no longer had anything you couldnt get elsewhere. Tools, appliances, tvs...lowes/bestbuy cover that. Clothes, bedding? Kohls/bed bath beyond has that.

Theres no reason to have this huge eyesore with 100 different stores when shopping plazas have 6 stores that cover everything anyway. Not to mention online shopping is destroying these dinosaurs.
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Old 01-05-2017, 07:46 AM   #10
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I still like retail stores - More often than not, they let you order online and pick up the merchandise at the store with no shipping fee. If there was no shipping fee online to start with, I have no reason to go to stores, unless I am buying something I need to try on, or need to look at. In my area, there is no IKEA store, but evidently, they have a showroom you can visit to see what each piece of furniture looks like in person. That makes sense to me.
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Old 01-05-2017, 07:58 AM   #11
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This isn't surprising at all. Even my almost 90 year old Dad does most of his shopping online.

I was trying to think of the last time I set foot in a retail establishment (not including groceries or Costco) and for the life of me, I cannot recall. I *think* I picked up some gardening stuff at Home Depot, but that would have been back in March or so. So basically, if I can't get it online...I don't need it.
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Old 01-05-2017, 08:00 AM   #12
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This is news? Unless a merchant offers a service that can't be replicated online (many more can be moved online than most people realize -e.g. some doctors diagnosis), or perishable goods (e.g. groceries) - it's inevitable, and it's been underway for 20 years. And even perishables may fall if Amazon and others perfect immediate deliveries, they're working on it now. They already offer same day delivery on many items.

It's not driven by merchants, it's driven by technology. Consumers are voting with their dollars, and more and more move online everyday. I'd rather buy many things online, but I know my generation will resist the change more than pre-Boomers. Why drive to a store to buy TurboTax when I can download it online in my bathrobe? Why drive to a store to buy clothes (they may not have in my size) when I can get exactly what I want on Lands End or LL Bean? Brick-n-mortars are stuck, they can't afford adequate inventory, so consumers walk away empty handed, and end up buying online. I am always amused when I go to a store for something, they don't have it, and the clerk tells me 'I can order one and have it here next Tuesday.' I can order it myself, and have it deliver to my house, why even go to a retail store?

Sure there are some things we'd rather see and touch before buying, but fewer every day. Many people "showroom" these days, go to a store to see an item intending all along to buy it for less online. That's completely unfair to merchants IMO, 'we get what we deserve.'

The changes will accelerate and reach a new norm.
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Old 01-05-2017, 08:16 AM   #13
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Sure there are some things we'd rather see and touch before buying, but fewer every day. Many people "showroom" these days, go to a store to see an item intending all along to buy it for less online. That's completely unfair to merchants IMO, 'we get what we deserve.'
I really try to avoid doing that. the closest I've come to it was the fancy shoe store where I bought a pair I loved at the sticker price, then ordered shoes of the same brand and size off the Sale section of their Web site after that. The store later closed.

Another thought on bricks and mortar: I really try to avoid the big box stores although I sometimes end up there because that's the only place I can get what I want immediately. Too much hiking around to find what you want (Bed, Bath and Beyond is a maze that pretty much requires that you walk past all the glitzy impulse purchases to get back to the boring stuff you came in for and Ikea is worse), frequently very few people around who can help you. I prefer smaller stores where I can find what I want, buy it and be back in my car quickly.
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Old 01-05-2017, 09:14 AM   #14
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I really try to avoid doing that. the closest I've come to it was the fancy shoe store where I bought a pair I loved at the sticker price, then ordered shoes of the same brand and size off the Sale section of their Web site after that. The store later closed.

Another thought on bricks and mortar: I really try to avoid the big box stores although I sometimes end up there because that's the only place I can get what I want immediately. Too much hiking around to find what you want (Bed, Bath and Beyond is a maze that pretty much requires that you walk past all the glitzy impulse purchases to get back to the boring stuff you came in for and Ikea is worse), frequently very few people around who can help you. I prefer smaller stores where I can find what I want, buy it and be back in my car quickly.
Shoes are an issue for me as well, I have some brands I like and have some idea of what they sell for online... the brands are usually only sold in shoe stores or sometime big sporting goods stores. The problem is they want to/or need to charge the full retail on the box listed price. Is it OK to go look at the various styles in the store hoping they will have something you like at somewhat of a discount? In fact it's common for me to be in a store, pick up a shoe and have them say, We don't have that in your size...if they can't match price or online selection are you supposed to just walk by and not even enter the place?
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Old 01-05-2017, 09:48 AM   #15
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Sears just sold the Craftsman brand to Black and Decker. Looks like soon I may have no reason whatsoever to go to a Sears store.

Quote:
Department-store chain Sears Holdings is seeking to stem its bleeding by closing another 150 stores, including 108 Kmart locations, and selling its Craftsman brand to raise cash.


The ailing retailer said Thursday that it had reached a deal to sell the tools brand to Stanley Black & Decker for a net present value of about $900 million, including future royalty payments.
Sears closing 150 stores, selling Craftsman in attempt to survive
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Old 01-05-2017, 09:58 AM   #16
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I look at things I want in mall stores like Macy's and try on clothes. Then I go home and look for the same item for a (typically) lower price online. I don't think I'm alone. The closing of Macy's is a big deal here as at one time it "anchored" main street. It is the last of the old time department stores.
I have good memories, though. I worked while in college for two summers in the department called "Better Dresses" in Marshall Fields on State Street in Chicago. (Was there a department called "Worse Dresses?"--I don't remember). I felt I had "made it" as with such a job in the greatest of all department stores in the center of the city?
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Old 01-05-2017, 10:00 AM   #17
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I used to go to Macy's close to my home when I lived in California because it was never crowded and I hate crowded stores. That says something about Macy's.
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Old 01-05-2017, 10:31 AM   #18
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All part of the evolution of retail.

First general stores, then mail order, downtown departments stores, which then moved into the malls. Now malls are dying/consolidating and more and more is moving online.

Who knows if "printed" products will replace delivered products next? Or something else will...

I am happy that I purchased some AMZN as a long term holding a while back. I'm mostly in index funds, but I keep a few long term shares in businesses that may be good long term companies.
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Old 01-05-2017, 11:05 AM   #19
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One of the Sears stores that is closing is at our closest mall. The anchors at this mall were Macy's, JC Penney and Sears. The Macy's left last year, now the Sears. This will probably be the end of this mall if it's just a JC Penney and what's left of the other mall stores which is only about 50% occupied.

This Sears has been a sad Sears for many years. Sorry to see this happening as this mall was lively and very well occupied for a long time.

I know this is happening to a lot of malls as retail changes shape.
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Old 01-05-2017, 11:19 AM   #20
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Sears just sold the Craftsman brand to Black and Decker. Looks like soon I may have no reason whatsoever to go to a Sears store.

Sears closing 150 stores, selling Craftsman in attempt to survive
Craftsman has been made in China now for I don't know how many years. Craftsman and the in-store brands of Home Depot and Lowes are all under some mega Chinese manufacturer. Some Stanley I think is under them too. The quality of all have been
absolute pit. I mean, a word that rhymes with pit anyway.

I don't see a need to go to retailers for much of anything, with few worthwhile exceptions. I'll go to a place that sells quality shoes at premium prices for great fitting and service. A decade ago that was Red Wing. Not sure who to go to now, but it's time to get some new walking shoes. Same with bicycles. Same with hobby equipment.

I've grown to hate manufacturers making special whatever just for a retailer, often at what I've found to be poorer quality. Read a SKU and it'll have -HD or -WM or -KH on the end to denote Levi or Milwaukee or whoever made a cheaper version of clothes/shoes/tools to sell at a retailer. I'll pay more for better quality at the manufacturer's site, or Amazon, or a specialty store. I'll pay even more at a store for fantastic service and very knowledgeable staff.

Around here, the malls are only crazy packed around major holidays. Meanwhile Ross, Marshalls, Best Buy, outlet malls, TJ Maxx, liquor stores, food courts, electronics and game stores, not to mention Target and Walmart and the big box membership stores, hobby and craft stores, those are the ones with full parking lots.

There are only two retail bookstores in the whole county now. One Sears in a dead mall. Two giant strip malls that are always packed, both in nicer areas of the county, only one of which has any boutique shops.
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