After retailers come off the holiday boost, the first quarter of the year is a common time for stores to announce closures. Between January and March, retailers assess their portfolios and make decisions to shed underperforming stores. Central Pennsylvania is no exception. In recent months, several anchor retail spaces have made the decision to close their doors, including Sears, Kmart, and hh gregg as well as a growing list of other retailers struggling to stay in the black.
What factors are fueling these store closings? Well, there are a few including industry consolidation and competition from online shopping that is causing companies to rethink the expense of brick and mortar locations. Experts predict that 2017’s store closure season will result in the most store closures the market has seen since 2010, when we were coming out of the recession.
The good news is that for most store closings, in Central Pennsylvania, there is another retailer ready to move in. For the many other stores who rely on their anchor retailers to pull business into a location, such as a mall or shopping complex, it’s important to have a thriving business in that space. Here’s a look at some of the retail locations in Central PA that will be getting new tenants in the coming months.
Sears in the Capital City Mall will become Dick’s Sporting Goods
In early February it was announced that Dick’s Sporting Goods plans to take over the space being left by Sears at the Capital City Mall in Cumberland County, and will relocate its existing store in Hampden Township. PREIT, the Philadelphia-based real estate investment trust, is working to replace closing Sears stores at malls around the region.
It’s interesting and important that a business like PREIT is assisting in finding suitable tenants to fill the vacated space by Sears. This is a critical step to ensure that mall’s business is not adversely affected by Sears moving out, but rather has the opportunity to drive in even more business with the selection of the right replacement retailer.
Kmart on the Carlisle Pike will become Marshalls, Homegoods and Stein Mart
Sears Holdings Corp. also announced in January that it would be closing two Kmarts in Central Pennsylvania. The closings were part of a larger retrenchment by the company. Plans already are under way to replace one of those Kmarts, in Hampden Township with the thriving boutique department store chain, Marshalls, Homegoods and Stein Mart. Aside from Marshalls, this will be the first Homegoods and Stein Mart on the West Shore.
More Retail Chains Struggling to Stay Afloat
Bon-Ton – According to Time magazine, Bon-Ton has closed “at least” 6 stores in the past two years and its store sales were down 3.1 percent this past holiday season.
J.C. Penney – JCP plans to close 130 to 140 stores and offer buyouts to 6,000 workers as the department-store industry sags in competition with online sellers and nimble niche retailers.
Macy’s – Macy’s recently announced plans to cut 100 of its 675 full-line stores.
Claire’s Stores – According to Reuters, Claire’s debt load has swollen to $2.4 billion, as more people shop online and take teen and pre-teen girls to malls less frequently.
David’s Bridal – Time reported that David’s Bridal moved from stable to negative in September 2016. The store’s CEO also resigned last year after just 3 years on the job with no real explanation.
Gymboree – Moody’s downgraded this children’s apparel retailer in November 2016. The company then announced that its CEO would be stepping down amid a likely $1 billion debt restructuring deal.
- Crew – The company is placing a new emphasis on online sales and athleisure wear, likely due to a possible $2 billion debt restructuring effort that was announced in 2016.
Nine West – A Fitch Ratings report from September 2016 listed the women’s shoes and handbags chain as among those at risk for bankruptcy.
Payless – This discount shoe retailer announced a debt restructuring plan that may include the shuttering of 1,000 stores or even filing for bankruptcy.
And the list keeps growing! See even more retail chains that have been marked as in financial distress.
Final Thoughts: What this means for Central Pennsylvania
The majority of retailers who are closing their doors or struggling to stay afloat sell clothing and goods. In contrast, grocery stores and restaurants remain, for the most part, white hot. Food retailers could become the new, true anchor for malls and shopping centers. E-commerce won’t replace going out to eat and while some grocery chains are looking to expand into online shopping and front door delivery, that majority of people still prefer to shop at a brick and mortar location.
It’s also important to note that though we’ve experienced quite a few retailers closing their doors, it’s not all doom and gloom for Central PA’s retail real estate market. Rising wages, job growth and lower gas prices are expected to stimulate more consumer spending. Though it may seem like a lot of store closings right now, retailers will soon find the balance between e-commerce and brick and mortar locations they need to “right the ship” and stay in business.
What retail chain are you most shocked to see close its doors? Join in the conversation by leaving a comment.
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