Wednesday, February 6, 2013

Eight Retail Giants WIll Close the Most Stores in 2013

Best Buy leads the list of troubled chains
Hunter Communications Recommended Reading from:
24/7 Wall Street

Link to Article:
Eight Retailers That Will Close the Most Stores

The current stubborn economic pinch, combined with the continued success of online shopping, has targeted many older retail giants harder than most.  This year, such names as Best Buy, Barnes & Noble, Sears, JC Penney, Office Depot, and GameStop are on top of the list of chains  forced to downsize this year.

Excerpt: "It is the time of year again, when America’s largest retailers release those critical holiday season figures and disclose their annual sales. A review of these numbers tells us a great deal about how most of the companies will do in the upcoming year. And while successful retailers in 2012 may add stores this year, those that have performed very poorly may have to cut locations during 2013 to improve margins or reverse losses.

For many retailers, the sales situation is so bad that it is not a question of whether they will cut stores, but when and how many. Most recently, Barnes & Noble Inc. decided it had too many stores to maintain profits. Its CEO recently said he plans to close as many as a third of the company’s locations.

Several of America’s largest retailers have been battered for years. Most have been undermined by a combination of e-commerce competition, often from Amazon.com Inc. and more successful retailers in the same areas. Borders and Circuit City are two of the best examples of retailers that were destroyed by larger bricks-and-mortar competition and consumers transitioning to online shopping. These large, badly damaged retailers could not possibly keep their stores open.

Currently, the best example of a struggling retailer is J.C. Penney Co. Inc. The department store chain’s third-quarter revenue dropped more than 26% year-over-year, and its same-store sales fell by about the same. With J.C. Penney’s e-commerce sales slipping by an ever greater amount, it was left with nowhere to go for bottom line improvement other than deep cost cuts."

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