Virtual News

The COVID-19 pandemic has accelerated the long decline in retail. Twenty-nine retail companies have filed for Chapter 11 bankruptcy, leading to the shuttering of 2,368 apparel stores, 1,433 home furnishing stores, and 907 department stores.
The carnage has also given rise to a new ownership trend in the industry. In 2019, retailers in the United States announced 9,302 store closings, a 59% jump from 2018 and the highest number since tracking the data began in 2012. Over 12,000 physical stores have closed due to factors including over-expansion of malls, rising rents, bankruptcies of leveraged buyouts, low quarterly profits outside holiday binge spending, delayed effects of the Great Recession, and changes in spending habits.
American consumers have shifted their purchasing habits due to various factors, including experience-spending versus material goods and homes, casual fashion in relaxed dress codes, and the rise of e-commerce, mostly in the form of competition from juggernaut companies such as Amazon.com and Walmart. A 2017 Business Insider report dubbed this phenomenon the “Amazon effect” and calculated that Amazon.com was generating greater than 50% of retail sales growth.
The rash of bankruptcies and store closings has greatly intensified during the COVID-19 pandemic, with most retail stores, particularly already struggling mall-based retailers, closing for extended periods. J. Crew, Neiman Marcus, Stage Stores, JCPenney, and Tuesday Morning.
Research from IHL Group finds that when a retailer closes many stores, it says more about the individual retailer rather than the retail industry overall. In 2019, the 20 stores announcing the most closures represented 75% of all closures. IHL found that for each retailer closing stores in 2019, more than five retail chains are opening stores, up from the 3.7 ratio in 2018. IHL also reported that the number of chains adding stores in 2019 has increased by 56%, while the number of closing stores has decreased by 66% in the last year.
The main factor in closing retail stores in the apocalypse is the shift in consumer habits towards online shopping. Holiday sales for e-commerce increased by 11% for 2016 compared with 2015 by Adobe Digital Insights, with Slice Intelligence reporting an even more generous 20% increase.