Last year took a devastating toll on the retail industry, and the carnage will continue in 2017. A number of chains will likely not survive the year, and many that do will finish 2017 smaller than before. In some cases, you can blame the internet, falling retail traffic, and the trends that all brick-and-mortar retailers have to deal with, but in a few cases, it's simply a matter of a brand once being trendy, and not adapting to changing tastes.
So far, in a bleak period for malls, shopping centers, and other retail outlets, these are the major names closing stores.
1. J.C. Penney getting smaller
While it has been retail's comeback kid, J.C. Penney (OTC:JCPN.Q) has still decided that it needs less retail stores. The company said in late February that it will close 130-140 locations "over the next few months." CEO Marvin Ellison tried to paint the move as a positive step in the company's impressive march back from the brink.
"We believe closing stores will also allow us to adjust our business to effectively compete against the growing threat of online retailers," he said in the press release. "It is essential to retain those locations that present the best expression of the JCPenney brand and function as a seamless extension of the omnichannel experience through online order fulfillment, same-day pick up, exchanges and returns."
The CEO wanted to make it clear that while it's closing stores, J.C. Penney remains committed to having brick-and-mortar locations. He also seemed to want to distance the company from rival Sears Holdings (NASDAQ:SHLDQ), which has been cutting stores quickly, with seemingly no end in sight.
2. Sears Holdings keeps shrinking
Sears Holdings, which owns Sears and Kmart, has been shedding locations so quickly that it's hard to keep up. There were rumors in 2016 that the company was preparing to shutter its entire Kmart chain. That did not happen, but in January 2017 the struggling retailer detailed plans to close 150 non-profitable stores consisting of 108 Kmart and 42 Sears stores. It's very likely that those numbers will increase over the course of the year as the retailer has been very aggressive in doing whatever it can to save cash.
3. BCBG Max Azria struggling to stay afloat
Fashion retailer BCBG Maz Azria recently filed for Chapter 11 bankruptcy protection, reporting assets in the range of $100 million to $500 million and liabilities ranging from $500 million to $1 billion, according to a press release. With about 570 stores globally, the company plans to have a much smaller retail footprint, though it has not released final totals for store closures (120 closures were announced before the filing, but more may happen). The fashion company does have a commitment for up to $45 million in debtor-in-possession (DIP) financing, which the chain says it will use to remain open during the reorganization process.
4. Macy's closures are underway
While it's in better shape than many of the chains on this list, Macy's (NYSE:M) has been closing unprofitable and even marginal locations it does not see improving. It released plans to close 100 stores beginning in August 2016 and had added another 68 to that list as of January 2017.
It's also worth noting that along with the closures, Macy's plans to open two new locations of its namesake brand in the current year. The chain also plans to add 30 Bluemercury locations and approximately 30 Macy's Backstage locations inside Macy's stores. In 2018 and beyond, the company also has plans to expand its Bloomingdale's brand on its own and through partnerships.
5. American Apparel has closed its stores
A one-time mall staple, American Apparel has been struggling with falling sales for years. The chain was sold in a bankruptcy auction to Canada's Gildan Activewear, which quickly released plans to close its remaining retail locations, The Los Angeles Times reported in January 2017.
At its height, the company had 230 stores for its made-in-America clothing brand, but some of those had previously been closed. At the time of its bankruptcy filing, the chain had 110 remaining U.S. locations that were going to be closed by its new owners after inventory sell-off sales.
6. hhgregg shuttering 88 stores
Regional electronics chain hhgregg (NYSE:HGGGQ) has decided to close 88 stores and three distribution centers as part of its just-filed Chapter 11 bankruptcy protection plans. The company expects to emerge from bankruptcy in about 60 days and has received funding for the reorganization process from a non-disclosed source.
"We've given it a valiant effort over the past 12 months," said CEO Robert J. Riesbeck in a press reelase. "We have conducted an extensive review of alternatives and believe pursuing a restructuring through Chapter 11 is the best path forward to ensure hhgregg's long-term success."
The electronics retailer will have 132 locations after the closures are completed. About 1,500 people will lose their jobs when the stores close, which the chain expects to happen by mid-April.
7. Abercrombie & Fitch getting smaller
Another struggling mall retailer, Abercrombie & Fitch (NYSE:ANF), plans to close approximately 60 stores in the U.S. during its fiscal 2017. The timing on these closures will vary as the company plans to shutter stores as leases expire. In addition to the closings, the retail chain does plan "to open six full-price stores in fiscal 2017, including four in the U.S. and two in international markets. The company also plans to open two new outlet stores," according to its Q4 2016 earnings report. The company operates roughly 900 stores under various brands across North America, Europe, Asia and the Middle East.
8. Wet Seal flounders
Wet Seal filed for bankruptcy protection in February with plans to close its remaining 170 or so stores. Since then, the remaining assets of the brand have been purchased by Canadian rival Gordon Brothers, though the deal still needs court approval, WWD reported. It is possible, however, that the company could open some stores under its new owner.
"Our plan for Wet Seal is to rebuild and reposition the brand and develop a unique new business model to best position it for future success." Ramez Toubassy, who leads Gordon Brothers' brands division told WWD. That's not exactly a definitive statement, but it does leave the door open.
9. Crocs closing stores
Crocs (NASDAQ:CROX), the company best known for making comfortable, rubber shoes (among other things), has decided it needs less physical locations. In its Q4 earnings release Crocs said it planned to close 160 retail stores by the end of 2018, leaving it with about 400 retail outlets. The move is part of an overall plan to cut spending.
"In order to accelerate improved profitability, we have identified $75 to $85 million of annualized SG&A reductions that we expect will generate an annual $30 to $35 million of improvement in earnings before interest and taxes by 2019," said CEO Gregg Ribatt, who is stepping down, but will remain a board member. "Looking ahead, I am confident that these actions will pave the way for renewed growth and improved shareholder value."
10. The end of The Limited
In January, The Limited began closing all 250 of its retail stores, according to Fortune. The closures were expected to result in 4,000 people losing their jobs.
"In an increasingly challenging environment for mall-based retail and women's apparel, we are very disappointed that the company has had to make the difficult decision to close its retail locations," the company's private equity backer, Sun Capital, said in a statement. The chain has also closed its website, which had remained online briefly after the retail closures were announced to sell off inventory. A note on the website does call the closure "temporary," but acknowledges that the company has filed for Chapter 11 bankruptcy protection.