At least 10,000 retailers in 2021 will close: report
14% more retailers will close this year compared to 2020: report
The retail apocalypse is expected to continue into 2021 spurred by pandemic-related shutdowns.
As many as 10,000 retailers could shutter this year in the U.S., a 14% jump from store closings in 2020, according to a report released Thursday by Coresight Research Group.
More owners contemplated bankruptcy last year with fewer people shopping as a result of the virus, and nationwide shutdowns on non-essential businesses forcing many enterprises to close for good. The biggest sectors hit were footwear, apparel, and accessories, the Coresight report suggests.
As many as 10,000 retailers could shutter this year in the U.S. (AP Photo/David Zalubowski)
"Even with a positive vaccination effect, we assume only a partial recovery in brick-and-mortar sales in 2021 in discretionary categories such as apparel, reflecting a high degree of online sales retention. Any sustained shift of sales online will impact store," Coresight CEO Deborah Weinswig said in the report.
In 2020, there were 8,741 store closures from major retailers, or more than 139 million square feet (gross), analysts estimated. Those numbers were down from 9,832 in 2019 spanning more than 119 million square feet.
US COMMERCIAL BANKRUPTCIES UP 33% AMID CORONAVIRUS PANDEMIC
The following major retailers accounted for 75% of total apparel store closings for 2020, including Foot Locker (125 store closings), Gap (119 stores), G-III Apparel (223 stores), The Children's Place (151 stores), Victoria's Secret (231 stores), and Modell's (153 stores), among others, Coresight data shows.
"In 2020, many retailers shelved their store expansion plans due to the uncertainty surrounding the pandemic and the return of consumers to stores, as well as the lack of clarity regarding whether and when vaccinations would begin to be administered," Weinswig said.
What's more, a shocking number of U.S. businesses sought relief in bankruptcy court (33%) as of October compared to the same time in 2019 before the pandemic hit, according to separate data from Epiq, a legal service. In the first three quarters of 2020, Chapter 11 bankruptcy filings were at the 5,529 mark, an Epip filing showed. To compare, filings were just under 5,520 in 2019.
READ MORE ON FOX BUSINESS BY CLICKING HERE
On the somewhat brighter side, Coresight analysts predict there will be 4,000 store openings in the U.S. this year, particularly in the food.