Economic Recovery? 13 Of The Biggest Retailers In America Are Closing Down Stores

Tyler Durden's picture

Submitted by Michael Snyder via The Economic Collapse blog,

Barack Obama recently stated that anyone that is claiming that America’s economy is in decline is “peddling fiction“.  Well, if the economy is in such great shape, why are major retailers shutting down hundreds of stores all over the country?

Last month, I wrote about the “retail apocalypse” that is sweeping the nation, but since then it has gotten even worse.  Closing stores has become the “hot new trend” in the retail world, and “space available” signs are going up in mall windows all over the United States.  Barack Obama can continue huffing and puffing about how well the middle class is doing all he wants, but the truth is that the cold, hard numbers that retailers are reporting tell an entirely different story.

Earlier today, Sears Chairman Eddie Lampert released a letter to shareholders that was filled with all kinds of bad news.  In this letter, he blamed the horrible results that Sears has been experiencing lately on “tectonic shifts” in consumer spending

In a letter to shareholders on Thursday, Lampert said the impact of “tectonic shifts” in consumer spending has spread more broadly in the last year to retailers “that had previously proven to be relatively immune to such shifts.”

 

“Walmart, Nordstrom, Macy’s, Staples, Whole Foods and many others have felt the impact of disruptive changes from online competition and new business models,” Lampert wrote.

And it is very true – Sears is doing horribly, but they are far from alone.  The following are 13 major retailers that are closing down stores…

#1 Sears lost 580 million dollars in the fourth quarter of 2015 alone, and they are scheduled to close at least 50 more “unprofitable stores” by the end of this year.

#2 It is being reported that Sports Authority will file for bankruptcy in March.  Some news reports have indicated that around 200 stores may close, but at this point it is not known how many of their 450 stores will be able to stay open.

#3 For decades, Kohl’s has been growing aggressively, but now it plans to shutter 18 stores in 2016.

#4 Target has just finished closing 13 stores in the United States.

#5 Best Buy closed 30 stores last year, and it says that more store closings are likely in the months to come.

#6 Office Depot plans to close a total of 400 stores by the end of 2016.

The next seven examples come from one of my previous articles

#7 Wal-Mart is closing 269 stores, including 154 inside the United States.

#8 K-Mart is closing down more than two dozen stores over the next several months.

#9 J.C. Penney will be permanently shutting down 47 more stores after closing a total of 40 stores in 2015.

#10 Macy’s has decided that it needs to shutter 36 stores and lay off approximately 2,500 employees.

#11 The Gap is in the process of closing 175 stores in North America.

#12 Aeropostale is in the process of closing 84 stores all across America.

#13 Finish Line has announced that 150 stores will be shutting down over the next few years.

These store closings can be particularly cruel for small towns.  Just consider the impact that Wal-Mart has had on the little town of Oriental, North Carolina

The Town’n Country grocery in Oriental, North Carolina, a local fixture for 44 years, closed its doors in October after a Wal-Mart store opened for business. Now, three months later — and less than two years after Wal-Mart arrived — the retail giant is pulling up stakes, leaving the community with no grocery store and no pharmacy.

 

Though mom-and-pop stores have steadily disappeared across the American landscape over the past three decades as the mega chain methodically expanded, there was at least always a Wal-Mart left behind to replace them. Now the Wal-Marts are disappearing, too.

Of course there are many factors involved in this ongoing retail apocalypse.  Competition from online retailers is becoming more intense, and consumer spending patterns are rapidly changing.

But in the end, the truth is that you can’t get blood out of a rock.  The middle class in America is shrinking, and there just isn’t as much discretionary spending going on as there used to be.

And now that we have entered a new economic downturn, many retailers are finding that there are some local communities that can no longer support their stores.  The following comes from CNBC

Though the shift to online shopping is no doubt playing a role in lighter foot traffic at malls, there’s more to their changing economics than the rise of Amazon. Changing demographics in a town are another reason a shopping center could struggle or fail — for example, if massive layoffs in a particular industry cause people to move away to find employment.

 

“A lot of people want to try and tie it to the Internet or ‘that’s not cool,’ or teens don’t like it,” Jesse Tron, a spokesman for industry trade group International Council of Shopping Centers, told CNBC last year. “It’s hard to support large-format retail in those suburban areas when people are trying to just pay their mortgage.”

In order to have a thriving middle class, we need good paying middle class jobs.  Unfortunately, our economy has been bleeding those kinds of jobs quite rapidly.  For example, Halliburton just announced that it is eliminating 5,000 more jobs after getting rid of 4,000 workers at the end of last year.

During the Obama years, good paying middle class jobs have been getting replaced by low paying service jobs.  At this point, 51 percent of all American workers make less than $30,000 a year.

And there is no way that you can support a middle class family with children on $30,000 a year.

We have an economy that is in the process of failing.  We can see it in the explosion of subprime auto loans that are going bad, we can see it in the hundreds of retail stores that are shutting down, and we can see it in the tens of thousands of good paying energy jobs that are being lost.

During the Obama years, interest rates have been pushed to the floor, the Federal Reserve has created trillions of dollars out of thin air, and the size of our national debt is getting close to doubling.  Despite all of those desperate measures, our economy continues to crumble.

We stole from the future to try to paper over our failures and it didn’t work.  Now an economic downturn that will ultimately turn out to be even worse than the “Great Recession” of 2008 and 2009 has begun, and our leaders have absolutely no idea how to fix things.

I wish I had better news to report, but I don’t.  Get prepared now, because very rough times are ahead.

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Shocker's picture

Every sector is getting hit, from Schools, Coal, Oil.... list going on and on. Pretty sad to watch

Layoff / Closing List: http://www.dailyjobcuts.com

The9thDoctor's picture

Amazon Dot Com.

That's the reason why your brick and mortar stores are shutting down in mass.

Barack Obama has little to nothing to do with the evolution of retail. Brick and mortars were on their way out by the early 2000s. Jeff Bezos has had way more impact on this trend.

The minute that Bezos figures out how to deliver groceries to your residence is when grocery stores will be gone too.

Consuelo's picture

I want my ass wiped.

 

Until Bezos offers that, it ain't real.

 

 

 

DownWithYogaPants's picture

I've done enough online selling to tell you that it is WAYYYY better than local shop.   How would you feel about having a gaggle of Niggerians come in to do some browsing?

The shrinkage alone is worth several percents.

Omen IV's picture

retail for the internet and bricks and mortar are down considerably since Obama started - the discretionary income of the consumer isnt there -obama's BLS stats are BS

he is the biggest disaster since the civil war in 1860

FireBrander's picture

13 Of The Biggest Retailers In America used CHEAP money to build WAY TOO MANY stores...

Walmart, Target, Home Depot, Chipotle, Subway...they all built too many stores too close to each other.

peddling-fiction's picture

All these stores are making tactical decisions to improve their bottom line. /s

PTR's picture

It's a brave new world.

bloofer's picture

The grocery store in my town is already gone. This is a town with a population of over 5,000 and there is no grocery store in town. The last one closed before Christmas.

Scooby Doo's picture

Just think about the costs involved to even open one.  I doubt people would have the gumption to try.  A ton of upfront costs, loans, outrageous insurance costs, & then try to make a profit.  Then have the government breathing down your neck to take 99 cents of every dollar you make.  Employees who need $15/hour but don't want to work.  If the store does manage to make a profit, everyone will hate the owner who beat the odds & can make some money.  Greedy bastard! Risked his last dime to make a go of it & is hated for making a profit. Who would want to risk everything in this "Feel the Bern" environment? 

hongdo's picture

So true.  Just paid the county Gross Receipts tax.  That's the tax you pay whether you make any money or not.  Already paid county sales and business equipment property taxes and state licensing fees.  State and Federal income taxes  taxes are next.

I looked at expanding and moving to a new location, but no way.  Costs, permits, zoning restrictions are out of sight.

1000yrdstare's picture

There will soon be a cover up, you won't be worry about any recovery, we will have WAR!

http://nextnewsnetwork.com/evacuation-nations-call-citizens-to-leave-lebanon-ahead-of-major-ground-offensive/

 

trying to confirm if the link is true, but its not looking good in the M.E.

lincolnsteffens's picture

I would think if the Saudis decided to paticipate in attacking Russia a small geographic area in SA would receive a gift from Russia. This would destroy the rule in SA and boost the value of Russia's and Iran's oil and gas holdings dramatically.

azusgm's picture

I think Iran would prefer to do the honors.

open-range's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.wallstreet34.com

nofluer's picture

Get a job, skuzbucket spammer!!!

Kaiser Sousa's picture

"buy stawks...

the consumers are doing fine."

Sincerly,

CNBS

ZeroPoint's picture

Soon enough, there will be another line on your withholdings on your paystub, right after Federal tax: MyRA contribution!

 

Scooby Doo's picture

Now, isn't that interesting?  If the government can mandate that all people must buy health insurance & can fine the ones who don't, will they make it mandatory to fund a "MyRA" account?  Will there be subsidies if a person doesn't earn enough to put the required amount into his MyRA?  

max2205's picture

those don't even count the open stores that no one goes into

Joe Cool's picture

It's a slow bleedout...Just slow enough where the majority doesn't sense a problem...

Pabloallen's picture

Not the majority.......  the population that is still franchised........   That number dwindles daily......

One-Eyed-Thong's picture

what's with all this fiction you're peddlin'  ?

khnum's picture

cant be Obama must be the weather...again(sarcasm)

loosh's picture

Of course it's the weather! Winter was too warm and we are positive that summer will be too cold and all that cheap crap from China is unseasonably too expensive for the increasingly poor underclass.

cant be Obama must be the weather...again(sarcasm)

TEOTWAIKI's picture

Robots don't eat, don't need clothes, don't need Chinese plastic junk.

There's seems to be a larger pattern emerging.

Now it looks like the plan is to kill off all the sea and land animals, most of the humans and have robots take care of the elites needs.

I think that is where all of this is heading.

Prophet of Rage's picture

Well, the American people wanted "Hope and Change". Here it is.

Soul Glow's picture

Weight watchers is down 27% today.  Does that mean Oprah got fat again?

kbohip's picture

On the contrary, I read that she lost a cool $27 million through this WW deal so far.  Her wallet has lost a ton of weight!

youngman's picture

Minimum wage increases and the internet would be my reasos

gatorengineer's picture

couldnt be that no one has any money could it?

Vlad the Inhaler's picture

That's because you don't understand how a consumer economy works.  If people were paid more, they could actually buy shit with that money, which supports the stores.  People are broke  = no buying stuff.  No buying stuff = no selling stuff.  No selling stuff = close the store.  Seems so basic even a third grader could understand.

Meanwhile, if the stores had to pay more, they have plenty of options of where to cut costs, including profit to shareholders and executive pay.  The shareholders and execs would rather loot the sinking ship however and fuck off to their gated mansion to dream up the next heist.

The9thDoctor's picture

If people's rents or mortgages weren't so damn high, they could afford more junk sold at retail stores.

Vlad the Inhaler's picture

Agreed.  Maybe if they would stop selling foreclosures wholesale to the hedge funds instead of letting them hit the market, and put some controls on purchases by non citizens, and stop with the FHA loans...   but that would be bad for the "my house is my ATM machine" crowd and their Realtor cheerleaders.

azusgm's picture

The spectre of reasonably priced residential real estate is enough to keep tax appraisers and school board members up at night.

The Gladiator's picture

Maybe you missed this article from yesterday. Why stop at $15 an hour? If $15 is good,$30 would be great!

 

http://www.zerohedge.com/news/2016-02-25/teachable-moment-young-person-c...

Vlad the Inhaler's picture

If $7.25 is too high, let's make it 75 cents per hour.  That would really give those stores the edge they need to remain open.

insanelysane's picture

Sports Authority bankrupt closing somewhere from 200 to 450 stores.

http://fortune.com/2016/02/24/sports-authority-bankruptcy/

Lost in translation's picture

I really missed Michael Snyder.

Not.

How disappointing to see him back here, as well as soiling USA Watchdog, too.  Pity.  Just another know-nothing idiot.

hound dog vigilante's picture

 

 

...and yet SOMEONE is actually buying stawks in this so-called 'short-squeeze' episode. 

Can anyone explain to me WHO would be buying equities here/now and WHY?  It. makes. no. sense.

Does someone actually have something to gain by being the bagholder/sucker?  I just don't see the angle for someone buying risk right now...

If they're betting on QE4-to-inifinity, why buy now?  If the Fed is going to reverse policy and ease this year, the market will HAVE to suffer much deeper losses... so buying now makes no sense if you're just waiting for the Fed to pump. And surely nobody is buying this market on hopes of higher rates... so where's the angle for being a buyer now?

Solarman's picture

Nobody is.  The are covering a short position, essentially going from -1 to 0.

Arnold's picture

Six years and asking a question like that?

 

My name and time are for sale, $190,000 USD.

hound dog vigilante's picture

Why cover a short?  Because you're getting squeezed this week?  We're going alot lower any minute now... so covering a short position (as if we're going to rocket to new highs tomorrow?) is just plain stupid.

If I'm interpretting this market correctly, then we're going see BIG moves downward very soon.

If Skynet/algos are doing all the buying today, then whoever owns those robots/algos already knows they are toast. 

 

 

Is it possible that much/most of the robot/algo action in the market are just surrogate Fed accounts?  Could the Fed be sucking the stink off this market in some futile attempt to 'control' downside movement?  It's the only thing that makes any sense to me.  No rational person (or robot!) interested in keeping their job would buy into the early stages of a global economic contraction.