Two makes a trend, right?
First Starbucks backed off closing some stores and now Pier 1 is doing the same. The home decor company lowered its number of store closings in its 2009 fiscal year to 50 down from its original plan to close 125. It has closed 31 to date and will close 19 next January and February. (Our previous number had been 80, in part because we’re going by the calendar year. I’ve adjusted the maths below to reflect 31 closures in 2009.)
So is this a “green shoot” in retail? Well, whatever, that doesn’t really matter. What matters is that during the depths of the crisis everyone overshot. Stores thought they had to close more stores than they did. The market was pricing in events that never happened. And if this trend holds, then it also means that many companies cut more jobs than they needed to, hopefully suggesting that the employment picture will get better faster than anyone’s currently expecting.