Retail Sales Are Up — But Closure And Bankruptcies Plague Giants

by MR Magazine Staff

Scratch the surface of recent retail sales gains, and you’ll find thousands of shuttered stores and billions in distressed debt underneath. It seems like a contradiction: Retail sales rose a healthy 5.6 percent in January over the year-ago period, but the industry is convulsing with store closures, bankruptcies and liquidations by major chains — topped off by levels of distressed debt not seen since the Great Recession. What’s going on? Overall, top-line results mask brick-and-mortar stores’ desperate battle against Amazon, which has radically reshaped American shopping habits with its Prime membership club, which offers rapid shipping of millions of products for a flat annual fee. To compete, traditional chains are slashing prices while struggling to become omnichannel sellers with products in-store, online or whatever mixture consumers prefer. This battle has been heating up for years, but traditional retail is on the ropes now after online sellers scored a huge holiday-season victory. “E-commerce acceleration is behind this dichotomy,” said Garrick Brown, vice president of retail research, Americas, at Cushman & Wakefield, adding, “Consumers came through for the holidays, but they really came through for [Amazon Chief Executive] Jeff Bezos.” Read more at New York Post.