American retailers have closed a record number of stores for good this year as the coronavirus pandemic upended the industry, a new report says.
Chains including Starbucks, Macy’s and Office Depot have announced plans to shutter 10,226 stores so far in 2020 — a number that already outstrips last year’s record total of 9,500 closures, according to professional-services firm BDO.
Nearly 6,000 of those stores belonged to 29 retailers that had filed for bankruptcy through mid-August, putting this year on pace to rival the 48 filings seen in 2010 on the heels of the Great Recession, the firm said in its twice-a-year report on retail bankruptcies.
“Government-mandated store closures, social distancing measures, supply chain issues and upticks in e-commerce sales have only intensified existing pain points felt by brick-and-mortar retailers, accelerating the pace of bankruptcies going into the second half of the year,” the report reads.
Most of this year’s closures have affected stores in malls, which have suffered “sustained” coronavirus-related disruptions and seen far less foot traffic than other locations, BDO says.
And the bankruptcies have primarily hammered apparel and footwear merchants, which account for 10 of the year’s filings so far, according to the report. Examples of clothiers claimed by the crisis include iconic American fashion label J.Crew, upscale suitmaker Brooks Brothers, and the True Religion jeans brand.
Nationwide retail sales have rebounded to pre-pandemic levels following historic plunges this spring as lockdowns meant to control the virus shut down non-essential shops across the country. But merchants will still have to maintain a strong digital presence to keep up with consumers’ preference for online shopping amid the pandemic, according to BDO.
“With a slow recovery outlook for the coronavirus recession, retailers need to reflect on the challenges faced in the first part of the year, focus on new product categories, and double down on digital- and hygiene-centric trends in the lead-up to the holiday season,” the firm’s report says.