The sluggish economy combined with increased online competition, particularly Amazon, are a few reasons why many brick-and-mortar retailers are closing their stores nationwide. Another factor is some retailers have failed to change their strategy to meet the needs and demands of today’s price-sensitive shoppers. Following are the nine retailers that are closing the most stores and the factors that contributed to their closures:

Article 5Abercrombie & Fitch has failed to appeal to today’s teen shopper causing it to fall behind competitors. It is now trying to appeal to older shoppers instead, with the hope of turning everything around and improving its overall performance. Closing stores helps cut operations and personnel costs.
Barnes & Noble has been trying to tap into e-commerce to compete against Amazon, but it just can’t measure up. Amazon has been in the online book business since the beginning of its existence.
Aerospostale being pressured by competitors, is forcing it to change its direction to compete with low-price fast fashion retailers. Store closings help free up capital for transformation projects. There have been rumors that the retailer may be seeking to be acquired.
J.C. Penney store closings occur mostly where sales have plummeted. The company failed to generate profit under the management of its CEO, Ron Johnson. The company’s sales has been declining, but Johnson’ new pricing strategy caused sales, earnings and cash flow to drop even further.
Office Depot merged with Office Max, in an effort to cut costs through store closings and job consolidations.
RadioShack has had to close more than 1,000 stores as a result of the slow economy coupled with the rise of online competition.
Sears Holdings has faced tough competition over the years from giants such as Wal-Mart and Amazon, leading to a large number of store closures.
Staples is moving away from brick-and-mortar to an online platform, as half of the retailer’s profit comes from its online store.
Toys “R” Us has been fighting a tough battle against giant discounters such as Walmart and online player Amazon. Toys “R” Us can’t seem to match up to these giants who are competing against each other for dominance in the marketplace.

These companies have been weakened by the slow economy, growth of e-commerce and fierce competitors, leading to store closures.

Discussion Question:

Which retailers are closing the most stores, and why are they doing it?


Source: Douglas A. McIntyre and Alexander E.M. Hess, USA Today, March 12, 2014