J.C Penny, Sears, Macy’s and Kmart Store Closures
J.C. Penny, Sears, Macy’s and Kmart closing stores due to “market corrections”. Penny’s announces the closure of 130 to 140 stores plus offering buyouts to 6000 workers.
Macy’s is planning on 100 store closings. Sears will close 150 stores and Kmart looks to close 108 stores. These department store closings are reflective of a trend of closures over the past decade. On the flip side, Amazon’s growth has grown to $120 billion since their beginning in 1997 and their growth doesn’t seem to be slowing.
“Traditional department stores are having trouble with millennials,” says Paul Whaba, writer for Fortune Magazine.
Experts say millennials are more interested in an in-store shopping experience or a no-shopping experience through a couple of clicks on the Internet and a next-day delivery. The shift of on-line sales to brick and mortar sales has repercussions all around.
“It became apparent to us that our footprint was too large,” Penney CEO Marvin Ellison said. The closures will “allow us to raise the overall brand standard of J.C. Penney” and invest in remaining stores.
Analysts also speculate that remaining department stores may reduce the size of the stores and look for different brands to distinguish themselves rather than compete with the on-line outlets and their prices of the same goods.
“This is just a market correction,’’ Farla Efros, president of HRC Retail Advisory, said in an interview. “There were too many stores, and too many retailers and too much noise in the market.’’
Paul Whaba attributes the ‘market correction’ to department stores not keeping up with the new age.
“The same old, same old is the road to ruin,” remarks Wahba. The lack of innovation by department stores and retail outlets have been a topic of criticism these outlets have struggled with in the past decade.
Whaba says to draw people back into stores “products need to be visually appealing, interactive” with the sales people leading the conversation rather than directing a sales pitch.