Fung Global Retail & Technology tracks store openings and closures for a select group of US retailers.
What is happening this week?
This week’s store closure announcements added 1,252 stores to our closings list, with the number likely to increase to 1,573 if Michael Kors and Payless go ahead and close 125 (instead of only 100) and 408 (instead of only 112) stores, respectively. We expect the trend of store closures to continue in full force over the next six months, as the retail revolution in US retail shows no signs of abating. Against this backdrop, discount keeps proving it is a winning proposition, with both Five Below and Dollar General continuing to expand their retail locations.
RadioShack Closes 1,000 Stores
This week, RadioShack closed another 1,000 stores, with a large Memorial Day sale of all inventory, including the store fixtures. Undergoing restructuring through Chapter 11, the retailer will continue to operate 70 stores, while RadioShack franchisees will continue to run 425 stores.
Payless on its Way to Close 800 Stores
After announcing that it will close about 400 stores as part of a restructuring plan in April, the bankrupt retailer is seeking court permission to close an additional 112 stores in the US and Puerto Rico. Payless is negotiating the terms of an additional 296 stores, and if these negotiations are unsuccessful, the stores will be closed as well.
Michael Kors Announces it Will Close 100–125 stores
Michael Kors reported earnings this past week, with comps declining by 14.1%, 13.6% on a constant currency basis. As a result of the challenges it faces, the company announced plans to improve the profitability of its store fleet by closing 100–125 full-price retail stores over the next two years, which should realize ongoing annual cost savings of $60 million.
Lululemon Athletica Takes ivivva Online, Closing 40 Retail Locations
Lululemon athletica announced plans “to operate ivivva, its activewear brand for girls, as a primarily e-commerce focused business, with a select number of stores in key communities across North America.” The company will close approximately 40 of its 55 ivivva stores as a result, and convert approximately half of the remaining stores to lululemon-branded stores.
Dollar General and Five Below Expand Retail Footprint
Dollar General and Five Below announced earnings this past week, both beating sales and EPS expectations. Dollar General revised its forecast to open 1,290 stores in FY17, instead of the previously expected 1,000. Five Below opened 31 stores this past quarter, and is on track to reach 100 openings for FY17.