Fung Global Retail & Technology tracks store openings and closures for a select group of US retailers.
What is happening this week?
Abercrombie & Fitch Seeks Buyer
Teen apparel retailer Abercrombie & Fitch is reported to be working with investment bank Perella Weinberg Partners to seek external interest in taking over the company, although neither company has confirmed the reports.
Bebe Stores Closes all 180 Stores but Avoids Bankruptcy
We adjusted the number of stores that Bebe Stores Inc will close to 180, which equates to its entire store fleet. The company has managed to successfully avoid bankruptcy after a deal was struck between the retailer and landlords with regard to the store closures. Bebe Stores will continue its operations online.
Coach Acquires Kate Spade & Co in $2.4 billion Cash Deal
Coach has agreed to a $2.4 billion cash deal for the acquisition of Kate Spade & Co. Kate Spade will continue to run as an independent brand and key talents will be retained after the acquisition is finalized.
Gymboree Closing 350 Stores
Children’s apparel retailer Gymboree is reported to be closing up to 350 stores, 27% of its entire store fleet, as part of a broader restructuring process to prepare for Chapter 11 filing. The news was reported by the Wall Street Journal. We first reported that Gymboree was preparing to file for bankruptcy in tracker #4 during the week of April 15.
Hudson’s Bay Co Seeks to Merge with Neiman Marcus
Hudson’s Bay Co has hired investment bank Evercore Partners Inc as a debt restructuring adviser for a potential merger with Neiman Marcus Group, a US department store operator. Hudson’s Bay has long since expressed interest in acquiring Neiman Marcus—the only deterrent has been the department store’s $4.7 billion of debt.
More Store Closures to Come for Gander Mountain after Bankruptcy Auction
Camping World Holding has won the bankruptcy auction for Gander Mountain and more store closures are expected. We previously reported that the company would close 32 stores, but the new owner has now announced its intention to keep around 70 of the 160 stores, leaving room for more closures.
The majority of retailers that have been closing stores fall within the department store and specialty retail categories. Primary reasons for the closures include: 1) declining mall traffic; and 2) the reconfiguration of store networks as consumers make more purchases online. The second reason is particularly challenging, as brick-and-mortar sales volumes are declining at different rates in various markets across the country, and each market requires a localized solution for its excess retail capacity problem. Those retailers that approach this with a one-size-fits-all mentality will end up closing significantly more locations, which is why we expect more announcements in the coming months, particularly for stores located in lower-grade malls.
Forever 21 Expands its Beauty Offering with 10 New Stores
Forever 21 is planning to launch its first 10 standalone beauty boutiques called Riley Rose, according to retail and tech trend watcher Retail Dive.
Aldi Plans to Open 400 Stores by the end of 2018
Aldi is continuing is aggressive expansion in the US market, raising the number of stores to be opened by the end of 2018 to 400. It is adopting a strategy of lowering prices, revamping existing stores and expanding its footprint, which is believed to be aimed at putting pressure on Walmart. We have adjusted the previously recorded store opening numbers for Aldi accordingly.
Value-driven retail concepts such as discount and fast fashion have been aggressive in expanding their store footprint, despite the difficult retail environment. Categories such as beauty and athleisure are outperforming the market, which is evident in their footprint expansion over the past 15 months.