Through mid-August this year, 29 major retailers had filed bankruptcy, passing the 22 filed last year during the same period, according to BDO, a professional services firm.
Clothing and footwear stores felt the brunt of this year’s failures, along with home furnishing and department stores.
In the first six months of the year, 18 retail chains filed bankruptcy, including GNC Holdings, JCPenney, Neiman Marcus, Stage Stores, and Tuesday Morning. From 1 July through August, 11 more retailers went belly up, including Ascena Retail Group, Brooks Brothers, Jos. A. Banks, Lucky Brands, Men’s Wearhouse, and Stein Mart.
The current pace of retail bankruptcies could set a record number this year, passing the previous mark of 48 large retailers that went bust in 2010 in the wake of the Great Recession, BDO said.
During the period, retailers collectively announced the closure of more than 10,000 brick-and-mortar stores, 6,000 of which resulted from bankruptcies.
Thousands of closures also were signaled by companies still in business, such as Bed Bath & Beyond, Gap, and Macy’s.
Of the 130 million square feet of retail space going dark this year, more than half belong to just five companies: Bed Bath & Beyond, JCPenney, Macy’s, Pier 1, and Stein Mart.
By mid-August, the number of vanishing stores already had surpassed the record of 9,500 for all of 2019.
Retailers are likely to close 25,000 stores in total this year, according to Coresight Research.
Before the economic shutdown closed the retail sector and sent shoppers online, many retail chains already had overborrowed and were competing in a market saturated by too many stores.
“The trend is still a lot of liquidations and asset sales,” noted BDO partner David Berliner.
