15 Big Box Retailers Collapsing Before Our Eyes

this is the toughest economic environment many famous retailers have ever been in and recent numbers are proof of that retail sales just fell again last month as inflation continued to hit sharp as buying power and Rising interest rates limited access to credit meanwhile companies are paying more for their merchandise more for their labor more for the energy and more for their transportation while their profit margins continue to shrink and their debt reaches unprecedented levels many of them have been struggling way before the current Crisis began and they've been hanging by a very thin threat that may break because economic conditions worsen this year that's why today we have listed several declining popular brands that may be gone before the end of 2023 but before moving on WE kindly ask you to support our work with a thumbs up and don't forget to subscribe to our channel so you don't miss our upcoming lists without further Ado here are 15 big box retailers collapsing before our eyes one staples the decline of this iconic office Superstore started almost a decade ago when it shuttered 225 locations in 2014. the closings resulted in revenue losses to the tune of hundreds of millions of dollars when the pandemic hit in early 2020 the company was already deep in trouble carrying a debt load of 5.325 billion dollars while sales only generated 1.514 billion dollars in Revenue that year since then the office supply retailer has never fully recovered especially amid the rise of remote working the company was forced to eliminate another 200 underperforming stores and slash thousands of jobs as it attempted to balance its finances more recently with inflation forcing Americans to focus only on essential purchases the chainsaw sales dropped by 6.7 in the first quarter of 2023 the growth of online competitors like Amazon threatens to make stores like Staples redundant due to its current liabilities it remains uncertain whether or not the brand Will Survive the ongoing recession but it wouldn't be surprising if the worst case scenario played out 2. David's Bridal after over seven years in business David's Bridal filed for bankruptcy in 2023 and we may have to say goodbye forever to this famous wedding apparel brand in April Executives pointed to inflationary pressures and Decades of changes in the wedding industry as the main reasons for the company's decline over 9 000 jobs were eliminated and today the company is trying to restructure its debt but creditors don't seem too optimistic about the future of the chain if a buyer doesn't step in to save the company CEO James Markham said the store chain will be completely liquidated by the end of 2023 but considering that sales went down by 22 percent in the last quarter it'll be very hard to find someone willing to purchase a money losing brand in a recessionary environment three Walgreens the empire built by Walgreens over the past 122 years seems to be crumbling down in 2023 as losses continued amount the pharmacy chain which operates nearly 8 700 stores across the United States announced 450 closings for the year and in March the company's shares hit a low of 28.64 that's the lowest level in more than 11 years the crash came after Walgreens Executives slashed its profit forecast for the year and predicted weak sales growth for quarter three and quarter four since January the stock is down by 17 percent worse Walgreens has lost 67 of its market cap since hitting a peak in June 2022 it's huge debt and other liabilities are making the chain look like a risky investment right now particularly as Financial experts worry about its ability to easily fulfill those obligations either with free cash flow or by raising Capital at an attractive price if it fails to pay off its creditors in the months ahead the company can go bankrupt due to its 13 billion dollar debt load today Walgreens only has 1.84 billion dollars in cash according to its most recent earnings report 4. Rite Aid meanwhile competitor Rite Aid has also been facing growing challenges the truth is that the company has been on its legs for years and the fact that Rivals enjoy much larger scale and generate significantly more cash flow is making Rite Aid fade in the background after selling two thousand of its stores in 2018 conditions have only gotten worse for the pharmacy chain where the organization becoming smaller its potential for profitability also plunged foot traffic has seen a persistent decline in the past few years and its stock is currently down 41 compared to the same period a year ago and 65 over the past 12 months The Limited potential to turn things around May further accelerate the demise of the chain during this downturn 5. Victoria's Secret Even After experiencing a major revamp since it filed for bankruptcy in 2020 the apparel retailer hasn't seen a notable Improvement in its Financial results after reporting a nine percent sales decline in January Quarter Two sales fell by an additional seven percent as high priced items pushed away American consumers trying to save the rise of independent and online Brands is making Victoria's Secret products less and less attractive in this highly competitive market over 300 stores have been permanently closed in the past three years and at least another 50 are scheduled to close in 2023 the pricey brand woes are likely to intensify as consumer spending dries up amid deteriorating economic conditions and limited credit retail experts say that a second bankruptcy may be on the cause for the chain given that profitability issues of further aggravated in the past 12 months 6. Foot Locker shoe retailer Foot Locker is on bankruptcy watch list as performance continues to disappoint amid falling for traffic in March the company said it could shut off 400 U.S retail stores and close another 125 stores operated by its Champs Sports subsidiary the retailers total sales for quarter 1 2023 were 1.92 billion dollars compared to 2.17 billion year over year net income for the three-month period ending April 29th was 36 million dollars sharp drop from the 132 million dollars reported for the period in 2022 CEO Mary Dillon attributed Footlocker's sales declined to the tough macro economic backdrop that forced the company to lower product prices to both Drive demand and manage inventory as a result the company's revenue is expected to shrink by a whopping 10 for the year the 11.4 drop in sales in the past quarter also LED Footlocker start to Crash by 27 in a single day the Outlook is getting ugly for the brand which desperately needs a new reorganization plan to survive the recession 7. Home Depot the largest Home Improvement Chain by market share in America is worried about the impact of a slowing economy on its business the company just reported a dismal quarter as consumers spending on Home Improvement projects come to a screeching halt the retailer posted disappointing sales for its first quarter and lowered its outlook for the year after customers slowed their spending Home Depot sales fell 4.5 percent at stores open at least a year during its latest quarter and its income decreased 6.4 percent from the same stretch a year ago total revenue for the quarter went down by 4.2 percent versus a year ago managing director with global data and Retail expert Neil Saunders highlighted in a note released earlier this month that Home Depot slowing sales pace is somewhat worrying as it reflects an underlying softness which is creeping into the economy he added that slowing activity in the housing market as high interest rates deter some from either refinancing to move or taking out mortgages for their first homes can have a chilling knock-on effect on the Home Improvement category the second factor is the general deterioration in spending even among those who are not moving Saunders outline the number of households undertaking projects continue to decline this quarter as people Reign back discretion responding and put off big remodels which sometimes require financing Home Depot said Shoppers are also restraining from purchasing bigger more expensive appliances we saw a continuation of the trend we observed in the fourth quarter with consumers pulling back on being taken and some discretionary type purchases said Billy bastec Home Depot's Executive Vice President of merchant icing all of that is leaving the retail Giant on a wobbly Financial footing and these factors could trigger a series of systemic failures that could undermine the health of the company in the coming months eight calls calls can't seem to catch a break and it may have only itself to blame after hiking prices four times in the past three years the department store chain said it now expects four-year sales to fall seven percent compared to a year ago the chain is blaming persistent inflation for preventing Shoppers specifically its middle income consumers from spending more at its stores the company also reported a drop in sales and profit for the quarter ended June 30th Coles started to lose its way a long time ago said Deanne Campbell Chief strategy officer for Holy V8 consulting firm the company has been struck in a prolonged state of stagflation she said calls shares fell more than seven percent in the weekend hit on July 8th its latest earnings report shows that not only is the retailer making less per quarter but it currently has over 1 100 open stores across 49 states with operating costs that could be hurting the company considering that its total debt currently stands at 5.46 billion dollars while revenue is at 4.28 billion dollars more turbulence is about to hit the retailer hard in the second half of 2023 nine Marshalls popular Discount Store Jane Marshalls hasn't been immune from the store closings and higher costs in the past few years right now the company is conducting dozens of store closings with locations in Minnesota and Pennsylvania shutting down this month the brand is failing to differentiate itself from other discount retailers in the same category and even after it launched a website in 2022 sales remain flat or in negative territory in the past 12 months The Firm claimed the slowdown in underlying sales on the uncertain macroeconomic climate Executives also warned that full year results would miss expectations which led shares to drop by 15 percent reversing all of its 2021 games 10 7 11. the ongoing battle between 7-Eleven and his franchisees may turn out to be disastrous for the chain and lead to its collapse sooner than customers imagine for years parent company seven and I has been at War for years with its franchisees one of the disputes is over seven eleven's requirement that stores remain open 24 hours a day franchisees have complained that it has been nearly impossible to recruit staff for the overnight shift in a lawsuit filed against the company franchisees say there are little more than glorified store managers who should receive more than a minimum wage to operate the stores the decision of the Court could force the company to change its entire franchise model and cost billions of dollars for that reason 7-Eleven has already slashed about 880 corporate jobs in the United States and is now trying to sell the chain and its sister Brands as part of a strategic reassessment made by Keith shareholders that could mean the end of 7-Eleven as we know it and no one knows for sure what's next for the convenience store chain 11. Old Navy retail analysts say the troubles faced by Old Navy were responsible for most of the 1800 job Cuts announced by the parent company Gap so far this year the Brand's first quarter sales fell six percent over the previous year while sales at its stores open at least a year fell seven percent last year the 54 year old company said economic uncertainty was fueling a changing consumer spending patterns and impacting its business specifically Old Navy said Shoppers were pulling back their spending on babies and kids items the company currently lacks the CEO and hasn't had one since firing Nancy Green in July 2022 that was 10 months ago what the heck is going on ask Patricia linkoff founder and president of agility search in today's fast-paced environment 10 months may as well be 10 years she said no one is minding the ship linkoff said 10 months of instability at the top really trickles down chairman Bob Martin Who's acting as interim CEO insisted the retailer was close to hiring a CEO at the beginning of the year but the company has yet to make an announcement the apparel store is struggling to compete against fast fashion companies like shine Uniqlo and H M the company has been late to fashion trends marched rollouts and often resorts to profit killing discounts to clear inventory consumers won't buy at full price that's a recipe for failure that surely won't help Old Navy to stay in business for another year 12. Urban Outfitters the Urban Outfitters chain is facing major hardships as its younger demographic clientele is impacted by inflation U.S management has made serious operational errors in the past year analysts say the brand recorded a nine percent fall in brick and mortar retail sales in quarter one with customers pointing to higher prices as the main reason why they stop shopping at the chain I think we've made a couple of mistakes CEO Richard Haynes said on a conference call with investors we've probably raised our prices more than we should have I think the customer is telling us loud and clear that they do not like that and they're buying more when we offer her promotions now I think that's a mistake on our part but I also think it's a result of the macro climate with that particular customer group who is a little more challenged economically and inflation is really hurting them quite a bit prior to that the apparel retailer had seen sales plunge by 11 and the revenue loss of 8 for the year 2022. its stock lost 32 percent of its value since the fourth quarter of last year conditions remain cloudy and now hundreds of stores are at risk of going dark before the end of 2023 13. lows lows is forecasting full year sales well below Market expectations hammered by weak demand for Home Improvement products as the rising cost of living forces consumers to poor spending on home related projects visits to Lowe's stores dropped 18 in May compared to a year earlier followed by declines of 12.6 percent and 11 in April and March respectively a report from location analytics firm placer.ai showed shares dropped nearly 17 as the company posted a bigger than expected dropping quarterly same store sales due to a decline in customer transactions given the fact that its sales are directly tied to the health of the U.S housing market the Outlook remains Bleak in June housing sales fell for the eighth consecutive month as mortgage rates continue to squeeze would-be home buyers 14. Giant Eagle food retailer Giant Eagle is closing hundreds of stores and restructuring hundreds of others to prevent closure during the ongoing economic downturn there have been significant shifts in consumer shopping and dining interests that have led us to close these locations the company spokesperson said due to its thin profit margins money losing locations could push the company off a financial cliff that's why Executives decided to reduce the Chain's footprint to save on costs food inflation may continue to hamper sales in the months ahead leaving the retailer in a very vulnerable financial position just like many others in the grocery sector 15. Piggly Wiggly known as the first self-service food retailer in the country Piggly Wiggly became wildly popular all across America but today the company stores only exist in 15 states and some of its 499 remaining locations are in danger of closure this year revenue losses High labor and operational costs are turning dozens of stores unprofitable and resulting in massive losses for the chain since 2020 things have gone from bad to worse for the retailer which was one of the few who failed to see a pandemic boom as lockdowns began the lack of an effective delivery system and a strong online presence are making Piggly Wiggly's business model look obsolete now it's time for executives to come up with a rescue plan for the brand otherwise it may disappear just like many others did in the past decade businesses are in for some major turbulence in the second half of 2023 and well into 2024 American consumers are still hurting and spending is expected to continue to decline as job losses rise and stagflation hits the US a historic economic downturn is already in motion the by the time we reach the end of it hundreds of iconic stores will be long gone thank you for watching

Channel: Epic Economist

Views: 363,642

Keywords: retail collapse, retailers on the brink of collapse, big box retailers struggling, big box retailers bankruptcy, retail store closings, retail store shutdowns, retail sales, retail outlook 2023, retail crisis, retail apocalypse, walgreens closing stores, rite aid store shutdowns, victoria's secret bankruptcy, homedepot ceo warns, consumer spending, economic recession, inflation, retail prices rising, retail foot traffic, brick and mortar collapse

Id: MeoiVIBaHYg

Length: 21min 4sec (1264 seconds)

Published: Sun Jul 23 2023