Closing Stores Near You – Boo Who
Change is inevitable, or so I have been told. So the closing of retail stores at an accelerated rate (over 12,000 store closings in 2019 as compared to 6,000 in 2008 at the hight of the great recession) is simply a fact of economic life. But so what?
So, it's different when the closings are near you. And they are permanent. As in PERMANENT with nothing to replace them.
Think about this: The success of a retail marketplace is highly dependant on the success of neighboring retail stores to bring foot traffic and sales to an entire center. When a store closes, the neighboring stores get sick as traffic slows. When an anchor store closes, the others often get pneumonia and usually die.
Unlike, store closings of the past, when an old shopping district decays and turns to skid row, only to rejuvenate into a vibrant old town district with vibrant boutique stores and restaurants, this generation of store closings is less likely to see a turn around anytime in your lifetime. Sorry.
Why? The economics of retail and the strength of the digital destruction that has ruined it. Retail will prohibit many, many investors from pouring money into ventures unlikely to succeed. Even Jeff Bezos of Amazon, who has ventured into retail with his purchase of Whole Foods, is starting to retreat and close stores. Why? They lose money!
Some people love the retail shopping experience, especially during the holidays. I can hear Petula Clark singing, “Downtown…where all the lights are bright”. But this year, we will see 7 fewer Nordstrom’s, 53 fewer Victoria Secrets and no Toys R Us who liquidated over 800 stores in 2018. Forever 21 will be forever gone.
So what is the upside of all this? Homelessness has become a serious problem across the country in spite of record-low unemployment. One of the reasons is the extremely high cost of housing. With huge vacancies in shopping malls and districts, there may be an opportunity to transform some of them into mixed-use residential/retail centers catering to transients and low-cost merchants much like you find crowding the sidewalks on Sixth Street in Los Angeles.
Please feel free to reach me anytime at firstname.lastname@example.org or 949-438-2722.
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