Retail Sales Are Up — But Closure And Bankruptcies Plague Giants
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.
