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Retail store closure summary
3-28-17
JLL Retail Research
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 2
The big picture
Larger stores are facing closures in the coming year
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved.
3
Source: ICSC, JLL
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
0
20
40
60
80
100
120
2010 2011 2012 2013 2014 2015 2016
Mill
ion
s
SF to be closed (L)
# of stores to be closed (R)
• While the number of store
closure announcements is
lower than during the
recession, the amount of
retail space being closed is
higher.
• Department stores like JC
Penney, Macy’s and Sears
have large footprints.
Why so many closures?
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 4
• Consumers tastes are
changing, especially as
millennials increase their
prominence and buying power.
• E-commerce penetration is a
reality and it’s growing
(although not as much as some
people fear).
• Consumers want experiences,
convenience and value. Stores
that fulfill those functions well
stay open. Those that don’t will
close.
Does e-commerce tell the whole story?
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 5
Nope. Here’s why:
• While e-commerce is growing at a
steady pace, the fact is most
purchases still take place within a
store.
• What's more, 1.7 percent of sales
occur on bricks-and-mortar
retailers’ websites, and some online
orders even take place inside a
store.
• Even more important: online
retailers are opening physical
locations, proving the importance of
bricks-and-mortar.
ICSC Research Analysis of U.S. Census
Bureau’s Quarterly E-Commerce Report
Pure-Play E-Commerce
3.3%
In-Store E-Commerce
0.9%
Non-Merchandise
Receipts
0.6%
Omni-Channel E-
Commerce
1.7%
In-Store sales
93.5%
What can we expect in the future?
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 6
The store function is shifting from
simple transactions to full-on
experiences. Here is what stores will
increasingly look like:
• Fluid transactions – no waiting at
cash register.
• Showroom/museum feel with
curated products.
• Emphasis on connecting with
consumers over selling.
• Experiential and interactive
environments that entertain
consumers.
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 7
So, who’s closing?
Apparel and shoe retailers are closing the most stores
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 8
958
525
370
284
241
132
131
114
70
59
48
41
36
6
3
Apparel
Shoe stores
Office supply
Restaurants
Books & Music
Discount dept. stores
Sporting goods
Department stores
Drug stores
Dollar stores
Home Furnishings
Grocery stores
Specialty stores
Electronics stores
Wholesale clubs Announced closures
Source: PNC,JLL
• Changing demographics, shifting
consumer tastes in favor of
discounters and fast fashion and some
sales loss to online sellers have all
helped to close some apparel stores.
• Bankrupt retailers like The Limited,
Wet Seal, BCBG Max Azria and
American Apparel are leading the
store closure count.
• Office supply sales are shifting more
and more online.
Retailers closing 50 or more stores
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 9
500
300
250
240
171
130
120
110
108
95
88
70
70
68
64
63
60
59
55
50
50
Payless Shoe Source
Office Depot
The Limited
Family Christian
Wet Seal
JC Penney
BCBG Max Azria
American Apparel
Kmart
Ruby Tuesday
hhgregg
CVS Health
Staples
MC Sports
Macy's
Kenneth Cole
Abercrombie & Fitch
Golfsmith
Noodles & Company
Chico's
Guess Announced closures
Source: PNC,JLL
Over half of announced closures* due to bankruptcy
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 10
Source: PNC,JLL
*JLL-tracked closures
51%49% Announced closures
Filing for bankruptcy Not filing
Retailers who recently announced bankruptcies
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 11
Source: PNC,JLL
4 36 59 68 88 110 120171
240 250
500
GanderMountain
Marbles:The
BrainStore
Golfsmith MCSports
hhgregg AmericanApparel
BCBGMaxAzria
Wet Seal FamilyChristian
TheLimited
PaylessShoe
Source
Announced closures
Apparel and sporting goods are seeing the most bankruptcies
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 12
Source: JLL
Apparel4
Sporting goods3
Books & Music
1
Specialty stores
1
Shoe stores1
Electronics stores
1
# of retailers filing for bankruptcy
Apparel and shoe stores closing the most locations because of bankruptcy
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 13
Source: PNC, JLL
651
500
240
13188
36
Apparel Shoe stores Books & Music Sporting goods Electronics stores Specialty stores
Announced closures
Department stores will close nearly 350 locations
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 14
Source: PNC, JLL
• Discount department stores
like JC Penney and Kmart
are closing the most
locations.JC
Penney130
Kmart108
Macy's64
Sears42
Announced closures
Purchases of office supplies move online
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 15
Office Depot
300
Staples70
Announced closures
• Office supplies are highly
commoditized products, making it
easy for consumers to purchase
online.
• As a result, office supply retailers
are shrinking their store count.
• Office Depot’s acquisition of Office
Max means the retailer must also
close redundant locations.
Source: PNC, JLL
Sporting goods retailers are closing 159 stores
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 16
MC Sports
68
Golfsmith59
Gander Mountain
32
Announced closures
Source: PNC, JLL
• There are three major bankruptcies
happening among sporting goods
retailers, resulting in nearly 160
store closures.
• In comparison, Dick’s Sporting
Goods is a strong performer and is
steadily expanding its footprint,
planning 43 new stores in the next
fiscal year.
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 17
Yes, some retailers
are expanding!
Dollar stores continue their aggressive expansion
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 18
1650
265
167
155
125
108
80
52
48
35
29
25
5
1
Dollar stores
Auto parts
Apparel
Discount department…
Beauty & cosmetics
Specialty stores
Home furnishings
Sporting goods
Grocery stores
Department stores
Wholesale clubs
Pet supply
Electronics
Convenience stores Announced openings
Source: PNC,JLL
Retailers openings 25 or more stores
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. 19
1000
650
190
100
100
90
80
75
73
65
50
43
32
30
29
2
2
Dollar General
Dollar Tree
O'Reilly Automotive
Tractor Supply
Ulta
Ross stores
HomeGoods
Advance Auto Parts
Carter's/Oshkosh
TJ Maxx/Marshalls
Aerie
Dick's Sporting Goods
Sprouts
Target
Costco
Bath & Body Works
Petsense Announced openings
Source: PNC,JLL
© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. The information contained in this document is proprietary to JLL and shall be used solely for the purposes of evaluating this proposal. All such documentation and information remains the property of JLL and shall be kept
confidential. Reproduction of any part of this document is authorized only to the extent necessary for its evaluation. It is not to be shown to any third party without the prior written authorization of JLL. All information contained herein is from sources deemed reliable; however,
no representation or warranty is made as to the accuracy thereof.
Jllretail.com
Contacts
James D. Cook
Americas Director of Research, Retail
+1 317 810 7191
+1 602 363 6691
Keisha Virtue
Senior Research Analyst, Retail
+954 990 0844
+954 449 3182