- Coresight Research estimated in a new report on Tuesday that as many as 25,000 stores could close in the US in 2020.
- Around 55% to 60% of these stores will be located in malls, it said.
- It had previously estimated around 15,000 closings for the year but updated its estimate in light of the “escalating impact of the coronavirus pandemic,” it said.
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As many as 25,000 stores could close in the US this year, according to a new report from Coresight Research.
Coresight, which had previously forecasted around 15,000 closings for the year, updated its estimate on Tuesday in light of the “escalating impact of the coronavirus pandemic,” it said.
Of the 20,000 to 25,000 closings it anticipates, around 55% to 60% of these stores will be located in malls, and “apparel retail and department stores look set to feature prominently,” it said.
Retailers across the US have been reeling from the impact of the pandemic, which has kept many stores closed since mid-March. So far, nearly 4,000 stores have closed in 2020 as legacy names such as Victoria’s Secret, Gap, and JCPenney have been forced to trim their store fleets.
While some have already reopened since the lockdown and started to claw back lost sales, Coresight said that consumer spending is likely to be “short of normal for some time.”
Its 20,000 to 25,000 estimate would smash last year’s record number of store closings where more than 9,300 locations closed and many retailers filed for bankruptcy.
Malls are in a particularly vulnerable position at present. Coresight notes their top occupants – department stores and apparel retailers, which are often anchor tenants – are coming under increased pressure from COVID-19. If these larger stores close, other retailers might follow suit if foot traffic slows or renegotiate for lower rents.
Business Insider’s Hayley Peterson recently reported on this issue, citing data from Green Street Advisors, which expects more than half of mall-based department stores to close by the end of 2021, leading to “excessive dark mall anchor space.”
“Widespread department store closures will accelerate the demise of many malls,” Green Street said in a recent report. “Many malls will be faced with multiple anchor vacancies, a tough place to come back from.”
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