The Retail Apocalypse – Reasons and Realities

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A recent Bloomberg article took a deep dive into the retail “doomsday” that everyone has been talking about. While some think the hype is triggered by the media, there are some harsh realities of what is going on in the sector. It’s true that 3,000+ store openings were announced in the first three quarters of the year, but what about the closings? Here are some key findings from the article:

  • Almost 6,800 store locations were scheduled to close in the U.S. through the third quarter of this year – more than double the 2016 stat and quite close to the all-time high of 6,900 during the 2008 financial crisis
  • Many believe the root cause is not solely blaming online sales and the millennial generation; rather, it’s the fact that the large chains are overloaded with debt (and the debt coming due very soon)
  • An explosive amount of risky debt owed by retail comes due over the next five years
  • Retail is the largest employer of Americans at the low end of the income scale, and jobs at physical stores sank by over 100,000 this year
  • The big-box era of large retailers is now going bust
  • Clothing and entertainment stores lead the country’s closings through the first three quarters of 2017
  • Ohio, West Virginia, Michigan and Illinois are the hardest-hit states for declining retail employment

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