Only the Strong Survive: JCPenney, Payless, LifeWay to Close 3,000+ Stores

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The weak keep getting weaker. Another 3,000 stores will bite the dust and mall vacancies are at an 8-year high.

“In the post-digital era, only the strong will survive. Darwin would love this,” said one retail analyst as JCPenney, Payless, LifeWay Announce 3,000+ Combined Store Closures.

Retail job cuts for January and February total 41,201, said research firm Challenger, Gray & Christmas in a new survey, including nationwide retailers such as Payless and Charlotte Russe.

“This is significant, and marks an acceleration of store closures and job cuts in the near term," said Mark Hamrick, a senior economic analyst at Bankrate. “Retail is ground zero for seeing the shifts of change in our lives.”

Lifeway Christian Bookstores announced last week it would be closing the doors of all 170 brick and mortar stores, in a pivot to focusing on digital and e-commerce.

“The decision to close our local stores is a difficult one,” said Lifeway Chief Executive Officer Brad Waggoner. “While we had hoped to keep some stores open, current market projections show this is no longer a viable option.”

“In the post-digital era, only the strong will survive,” Ron Johnson, CEO of Enjoy, a retail technology company, told NBC News. “You need a great brand, a strong balance sheet, and a vision for experience that commences digitally. Darwin would love this.”

Mall Vacancies on the Rise

The Financial Times notes US Shopping Centre Vacancies Rise to Eight-Year High

"US retailers have set out plans to close 5,480 stores, according to Coresight Research — almost as many as the 5,730 announced in all of 2018."

Trump Sounds Like the French

Save the local bookstores was the cry in France. Here's reality.

Lexi then goes off the deep end with anti-capitalist nonsense.

Unfair Competition

Businesses that cannot compete always complain about fairness.

They want subsidies at taxpayer expense, higher prices for consumers, or both.

Pathetic Hooey

What a pathetic bunch of hooey from Trump.

Mike "Mish" Shedlock

Comments (33)
No. 1-11
Max66
Max66

Isn't the high cost of commercial real estate along with high debt the key reason rather than just online competition? This single reason logic is actually what is taught in business schools. The reality is usually a multiple of reasons.

lol
lol

Dealerships next in line,1/3 of new car dealerships will be gone in a year.more than half in 2 years without a bailout or the fed starting to quietly buy cars off dealer lots to prop em up.the big 3 will lookin at bankruptcy or bailout your pick.

ReadyKilowatt
ReadyKilowatt

Maybe we're all just tired of buying stuff. When was the last time you bought a suit? Every day is casual Friday unless you're an undertaker. The rest of the time we're in jeans or worse. JC Penny can't be doing well.

Mish
Mish

Editor

I do not support subsidies. Period. Amazon does not survive because of them. Nor are stores going under because of subsidies to Amazon.

thimk
thimk

max66 may be on to something: the demise of brick and mortar may be directly attributable to its increase in overhead costs (e.g. rent , taxes, liability , association fees, utilities) just to name a few. net net; online is cheaper. look at the sears and robucks catalogs; the predecessor to amazon of years ago;, people still bought items at brick and mortar. this catalog had everything . time to jump on the wayback machine. jus say'n

Mish
Mish

Editor

"Dealerships next in line,1/3 of new car dealerships will be gone in a year. more than half in 2 years"

I think that timeline is wrong but the idea is correct 5-7 years

Carl_R
Carl_R

Smaller chains are also going under. As I pointed out in another recent thread, a Wisconsin based chain of discount stores with stores in 34 states, Shopko, which was sort of like a K-Mart or Walmart, filed for bankruptcy in January, and they are closing about 300 stores. There were Payless Shoe stores inside them, so those would be included in the numbers above for closing Payless Shoe stores. Many of the other smaller discount store chains have also closed.

DFWRealEstate
DFWRealEstate

"I do not support subsidies. Period. Amazon does not survive because of them. Nor are stores going under because of subsidies to Amazon."

I would respectfully disagree. So does the data. Amazon may not survive because of them, but the huge subsidies Amazon receives certainly increase Amazon's monopoly power in the marketplace, thereby increasing the company's profit, and insuring its viability as a going concern. This much is obvious. It's pretty difficult to compete with a business which pays no federal taxes while also receiving huge state and local sweeteners which pad their bottom line. This crony capitalist formula has also been working wonders for Mr. Bezos' bottom line as well.

It seems many of the "gig economy" wonder tech companies are rushing to get their IPO's out the door. It will be interesting to see how well they fare if and when they are subject to labor laws and regulations which they have been flouting. Remove the regulatory, tax avoidance schemes, and may of them have business models which aren't really innovative at all.

KidHorn
KidHorn

The survivors will be determined by what they sell. Not by their balance sheet. There will always be a need for grocery stores, dry cleaners, clothing stores, hair salons, etc... .

Mike 2112
Mike 2112

The Lexi guy says that the "neighborhood is being dictated by those who don't live there." But that's not true. The ppl who live there are buying online and choosing to NOT go to the local store.