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There’s no way we could’ve predicted at the start of 2020 how devastating the year was going to be for retail. The coronavirus pandemic made preexisting problems even worse for struggling retailers.
A number of retailers are entering 2021 with some vulnerabilities that could result in bankruptcy, store closures, or both. (Spoiler alert: Lots of them are in malls.)
Here’s who we’re watching:
This one has been on our watch lists for a few years, especially since they filed bankruptcy in 2018 and nearly closed all stores in 2019. They’ve sold off a lot of the company’s pieces and are down to only a few dozen stores nationwide, so it’s feeling like a long goodbye that could culminate in 2021.
They filed for Chapter 11 bankruptcy protection back in May and closed 150 stores before emerging from bankruptcy with new owners. They’ve already announced 15 additional closures by Spring 2021, and a general trend away from malls isn’t likely going to be solved in 2021 — with the Covid pandemic still going strong.
Mall-based department stores continue to struggle in the midst of the pandemic, to the point that Southeastern chain Belk announced in January that they’re planning to file for Chapter 11 bankruptcy protection.
Although there aren’t any plans yet to close any of Belk’s nearly 300 stores, that could change if things don’t turn around quickly for the company.
We’ve been watching Victoria’s Secret over the last couple of years, and the trajectory hasn’t been good. Rapidly declining stock, several rounds of store closures, changing consumer behavior, and a recent sale have all pointed to the mall-based lingerie seller’s demise. It may not be long before liquidators are called in.
Bed Bath & Beyond
This could go either way. Bed Bath & Beyond clearly has a plan to make their post-pandemic finances a lot healthier, but it comes at the expense of 200 stores closing and the selloff of some of the company’s pieces. Any more hiccups and things could get pretty serious for BB&B.
Covid-19 has made parties real difficult to have (and in some cases, against the law) — so the existing difficulties of niche, event-based retailers like Party City were magnified by the pandemic. They’ve dropped from 815 to 739 stores since 2019, and with losses in the hundreds of millions of dollars, a bunch more stores could close soon.
Although the department store was one of the first to declare bankruptcy during the pandemic and one of the first to come out of it, analysts say Neiman Marcus’s finances are still shaky. They closed most of their clearance stores last year, and if things don’t improve for the mall-based retailer, look for main brand stores to shutter.
Off-price retailer Tuesday Morning closed 1/3 of their stores in 2020 — 230 locations — as part of a Chapter 11 bankruptcy filing. Like most discount department stores, they don’t have an online store. So unless traffic picks up at their remaining locations, we could see additional closures soon.
Mall stores have been hit hard over the last few years, and the pandemic has made it worse. Macy’s announced they’d be closing 1/5 of all locations over the next couple of years. We don’t expect Macy’s to go out of business anytime soon, but look for more store closures as shopping trends and the pandemic continue to affect sales.
Carter’s has grown their online business during the pandemic, and their products are carried in a number of other retailers, but their own brick-and-mortar locations have suffered over the past year. In October they closed 25% of their 750 stores. If sales don’t improve at the remaining stores, they could just opt out of flagship stores and sell online and to other retailers.
Sur La Table
They filed for bankruptcy in 2020 in the wake of coronavirus, and the specialty kitchen goods chain continues to struggle with sales in 2021. They’re down to around 50 stores now, after closing 70 or so in 2020. It wouldn’t take much to see the rest of them close.
Specialty retailers like Guitar Center have struggled a lot during the coronavirus pandemic, and although they grew their online business, they’ve taken a huge financial hit in 2020. They filed for bankruptcy, closed a handful of stores, and emerged with less debt and new investors, but the industry is still pretty fragile. More closures could be coming.
Another mall-based fashion retailer, Express was in the midst of financial difficulty before the pandemic hit. Although they cut costs by closing 100 stores and successfully raised funds to stay afloat, the margin for error feels really slim right now.
Jos. A Bank
Jos. A Bank was saved by Tailored Brands six years ago, but after their parent company filed for bankruptcy — because formalwear sales have plummeted since coronavirus — they closed 63 stores. Unless formal sales rebound soon, expect Jos. A Bank to be up against the ropes again.
The stationery and paper products speciality store filed bankruptcy in January 2020, and has since closed 178 stores in the U.S. Although we don’t know exactly how many stores are left, it’s safe to assume that it’s a significant number of stores, since they had 450 back in 2013.
Before the pandemic hit, Chico’s announced that 250 stores would close before the end of 2022. As of August 2020, they’d only closed 49 stores, so expect at least 200 closures over the next two years — or more, if the financial difficulties continue.