This document summarizes retail store closure trends in 2017. True Religion filed for bankruptcy and will close 27 stores. Starbucks is closing all 379 Teavana locations. Over 6,800 store closures were announced but only 5,756 specific locations have been identified. Apparel and electronics retailers account for half of 2017 closures. Many closures are due to bankruptcy, especially for apparel and electronics chains. While some retailers like Macy's and T-Mobile are expanding, overall openings still do not offset the high number of closures across the retail industry.
2. What’s new in closures?
• True Religion has filed for bankruptcy. Denim
retailer True Religion filed for Chapter 11 this week,
citing a capital structure reorganization as the
primary reason. Some 27 retail stores, i.e., 19% of
the total store fleet, are set to be closed in the
process.
• Starbucks closes Teavana locations. Starbucks is
pulling the plug on its Teavana division, which it
acquired in 2012, due to tepid performance. The
specialty F&B retailer will shutter all 379 locations
over the coming year.
+27 closures
+379 closures
3. Retailers to watch for closures
Source: Credit Intell
Retailer
Credit Intell
Rating
Retailer
Credit Intell
Rating
Academy Sports + Outdoors D1 Bon-Ton Stores E2
Boot Barn D1 Claire's Stores E2
J.C. Penney Company D1 99 Centers Only Stores F1
Jo-Ann Stores D1 bebe stores F1
Tailored Brands D1 Le Chateau F2
Christopher & Banks D2 Sears Holdings F2
Destination Maternity D2 Gordmans Stores DIP
Hudson's Bay Company D2 Sports Authority DIP
Lands' End D2 Gander Mountain DIP
Stage Stores D2 Gymboree Corp DIP
Stein Mart D2 rue21, inc DIP
Fred's E1 Aeropostale DIP
J. Crew Group E1 American Apparel DIP
Neiman Marcus Group E1 Michigan Sporting Goods DIP
Rite Aid Corp E1 Wet Seal DIP
Credit Intell Rating Definitions
CI rating
Equivalent
S&P rating
Credit quality
D1 B Below satisfactory
D2 B- Below satisfactory
E1 CCC+/CCC Poor
E2 CC Poor
F1 C Critical
F2 D Critical
DIP - Filed for bankruptcy
• These retailers all have credit ratings below satisfactory. Future closures may be
imminent.
4. What’s new in openings?
• Macy’s Backstage is expanding. Macy’s off-price
concept, Backstage currently has approximately 30
outlets and the retailer plans to open at least 19 more
in-store shops by the end of the year.
• T-Mobile opening stores at a breakneck pace. At
the beginning of the year, T-Mobile reported plans to
open 1,000 new T-Mobile stores, expanding its retail
footprint to catch up with its network expansion. After
the first quarter, T-Mobile updated its outlook to 1,500
T-Mobile stores. The company has opened 1,000
stores already this year, surpassing its original goal.
+19 new stores
Source: PNC
+1,500 new stores
15. Midwest states have the most department store closures
Source: Credit Intel, JLL
31
14
18
1416
16
Top 10 announced
department store closures
#
Number of announced
department store
closures
15
12
11
11
19. Despite headlines, retail openings still trounce closures
MOVE-OUTS
MOVE-INS
24.1 MILLION S.F.
Mall square footage opened or closed over the last 12 months
15.1 MILLION S.F.
Source: CoStar, JLL Research
20. 0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1
Millions
Mall SF vacated Mall SF absorbed
Mall space absorbed outweighs space vacated
Source: CoStar, JLL Research