- Rue21 which is an American specialty retailer for young men and women’s casual apparel and accessories maybe the latest one to close stores as they prepare to file for bankruptcy.
- Online giant Amazon is eating up most of the industry’s online growth.
Retailers in the U.S. are being battered with slow sales and stores across the board are closing shops. Low cost footwear retailer Payless Inc. which can be found everywhere filed for bankruptcy and announced plans to close down hundreds of shops. Ralph Lauren Corp., meanwhile, said it will close its flagship 5th Avenue Polo store which is a symbol of old-fashioned luxury that no longer resonates with today’s shoppers. Rue21 Inc., fashion chain with 1,000 stores, is preparing to file for bankruptcy as soon as this month.
With so many retailers closing shops shopping malls are left with hundreds of empty slots. According to CoStar Group which is a real estate research firm, more than 10% 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.
It also affecting employment, on the latest data from Labor Department retailers cut around 30,000 positions in March. That was about the same total as in February and marked the worst two-month showing since 2009.
According to Richard Hayne, Urban Outfitters Chief Executive Officer, it's a retail shop bubble Malls added way too many stores in recent years and way too many of them sell the same thing: apparel.
“This created a bubble, and like housing, that bubble has now burst,” he said. “We are seeing the results: Doors shuttering and rents retreating. This trend will continue for the foreseeable future and may even accelerate.”
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 sluggish demand.
HHGregg Inc., Gordmans Stores Inc. and Gander Mountain Co. all entered bankruptcy this year. RadioShack, meanwhile, filed for Chapter 11 for the 2nd time in two years.
Other companies are plowing ahead with store closures outside of bankruptcy court. Sears Holdings Corp., Macy’s Inc. and J.C. Penney Co. are shutting hundreds of locations combined, reeling from an especially punishing slump in the department-store industry.
Kenneth Cole Productions said in November that it would close almost all of its locations. Bebe Stores Inc., a women’s apparel chain, is planning to take a similar step, people familiar with the situation said last month.
When it comes to E-commerce Amazon.com Inc. is still the king which is gobbling up 53% of the e-commerce sales growth in 2016.
Rue21 Women's Denim Crop Cut Shorts (1/2) $8.98
Polo Ralph Lauren Men's Faxon Low Sneaker $54.95
50's Vintage Pin-up Dresses Fit and Flare Sleeveless $29.99
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