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US apparel retail stores continue to close in 2017
28
Oct '17
US apparel retail stores continue to close in 2017
Indicating the growing preference for online shopping among consumers, clothing brands continue to pull shutters down at several retail locations across the US. Some like Gymboree and Bebe even went for complete financial restructuring this year. The trend, observed for last few years, is not likely to subside in face of declining retail footfalls.

This year, teen specialty apparel retailer Rue21 closed approximately 400 underperforming stores in its 1,179 store fleet in order to streamline operations, better align the size of its footprint with market realities, and focus on its hundreds of highly performing locations. As on September 11, 2017, Rue21 operated 758 stores in 45 US states in shopping malls, outlets and strip centres.

Women’s apparel chain The Limited closed down all its 250 stores across the US beginning January this year. However, it is continuing to sell online.

Tailored Brands, which includes Jos A Bank and Men’s Wearhouse in its portfolio, saw its total number of stores reduce from 1,667 as on January 28, 2017 to 1,484 on July 29, 207. This includes the closure of all its 170 tuxedo shops at Macy’s.

Meanwhile, Gymboree Corporation announced last month that it had successfully completed its financial restructuring and emerged from Chapter 11 as a new corporation under the name Gymboree Group, Inc. The company which operates specialty retail brands closed several stores to eliminate “more than $900 million of debt from its balance sheet and right-sizing its store footprint”.

Ascena Retail Group, Inc., a leading national specialty retailer offering apparel, shoes, and accessories for women, closed 55 stores in the quarter ended January 28, 2017, followed by another 36 stores in quarter ended April 29, and 56 in quarter ended July 29. As a result, the number of store locations under the Group decreased from 4,920 to 4,807 during the nine-month period. Except for Lou & Grey, all brands under the group have seen store closures this year.

Global luxury fashion brand Michael Kors announced in May this year that it intends to improve the profitability of its store fleet by closing between 100 and 125 of its full-price retail stores over the next 2 years. It is anticipating 20 to 40 store closures in fiscal 2018, according to its latest quarterly financial result report.

Announcing the completion of its reorganisation in June this year, Bebe Stores, Inc. said it has reached agreement with substantially all of its retail store landlords to terminate the existing leases. “Going forward, the company anticipates having no retail operations, and its sole operations will be the collection of royalty income from the JV (with Blue Star Alliance).”

In its first quarter results report in May this year, global specialty retailer of apparel and accessories Abercrombie & Fitch Co said it anticipates closing approximately 60 stores in the US during the fiscal year through natural lease expirations. The company reiterated the statement in its second quarter results this August.

The total store count of Guess?, Inc and its subsidiaries in the US decreased from 342 in July 2016 to 320 on July 29, 2017. Guess designs, markets, distributes and licenses a lifestyle collection of contemporary apparel, denim, handbags, watches, footwear and other related consumer products.

In the 26 weeks ended July 29, 2017, Chico’s FAS, Inc, which also owns White House Black Market and Soma, closed 21 stores while opening only 2 new ones, thus reducing the total count to 1,482.

In accordance with its fleet optimisation initiative, The Children’s Place, Inc., the largest pure-play children’s specialty apparel retailer in North America, closed 7 stores and did not open any stores during the second quarter of 2017. The company ended the quarter with 1,026 stores and square footage of 4.801 million, a decrease of 3.4 per cent compared to the prior year. A similar number of stores were closed in the first quarter. Since its fleet optimisation initiative was announced in 2013, the company has closed 156 stores.

This list, however, is not exhaustive, and some companies that have closed its outlets this year might not have found mention here. But, the point remains that apparel retail outlets are facing a closure due to intense competition with e-commerce. At the moment, this trend is limited to the US, and it is not necessary that the same trend would be witnessed in other regions as well. (RKS)

Fibre2Fashion News Desk – India


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