2017-04-08 17:26:30 UTC
Apr 5 2017
The battered American retail industry took a few more
lumps this week, with stores at both ends of the price
spectrum preparing to close their doors.
At the bottom, the seemingly ubiquitous Payless Inc.
shoe chain filed for bankruptcy and announced plans to
shutter hundreds of locations. Ralph Lauren Corp.,
meanwhile, said it will close its flagship Fifth Avenue
Polo store -- a symbol of old-fashioned luxury that no
longer resonates with todays shoppers.
And the teen-apparel retailer Rue21 Inc. could be the
next casualty. The chain, which has about 1,000 stores,
is preparing to file for bankruptcy as soon as this month,
according to people familiar with the situation. Just a
few years ago, it was sold to private equity firm Apax
Partners for about a billion dollars.
The rapid descent of so many retailers has left shopping
malls with hundreds of slots to fill, and the pain could
be just beginning. More than 10 percent of U.S. retail
space, or nearly 1 billion square feet, may need to be
closed, converted to other uses or renegotiated for lower
rent in coming years, according to data provided to
Bloomberg by CoStar Group.
The blight also is taking a toll on jobs. According to
Labor Department figures released on Friday, retailers cut
around 30,000 positions in March. That was about the same
total as in February and marked the worst two-month showing
Retail defaults are contributing to the trend. Payless is
closing 400 stores as part of a bankruptcy plan announced
on Tuesday. The mammoth chain had roughly 4,000 locations
and 22,000 employees -- more than it needs to handle
HHGregg Inc., Gordmans Stores Inc. and Gander Mountain Co.
all entered bankruptcy this year. RadioShack, meanwhile,
filed for Chapter 11 for the second time in two years.
Other companies are plowing ahead with store closures outside
of bankruptcy court. Sears Holdings Corp., Macys Inc. and
J.C. Penney Co. are shutting hundreds of locations combined,
reeling from an especially punishing slump in the department-