In the bankruptcy process, major US retailers have closed their stores in the months of February and March this year, and many are planning to shut their stores in coming months, resulting in loss of thousands of retail jobs in the country, even drastic than the 2009 crisis.
According to the US Bureau of Labour Statistics’ report, the retail sector collectively cut 30,000 jobs in March. Employment in general merchandise stores declined by 35,000 in the month and 89,000 since October 2016.
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Apparel brands like Ralph Lauren, American Apparel, The Limited, Wet Seal, HHGregg, BCBG Max Azria and others have closed all or most of their stores, while retail giants such as Sears, Kmart, Macy’s, Staples, Office Depot and more have closed stores as part of the ongoing turnaround efforts outside Chapter 11.
As part of this closure, teen apparel retailer Rue21 Inc. could be the next casualty. The chain, which has about 1,000 stores, is preparing to file for bankruptcy as soon as this month. Just a few years ago, the retailer was sold to private equity firm Apax Partners. It’s worth mentioning here that malls in the US have added way too many stores in recent years and way too many of them sell the same thing – apparel.
Commenting on the situation, Urban Outfitters Chief Executive Officer Richard Hayne said, “This (large scale store openings in malls) has created a bubble, and like housing, that bubble has now burst. We are seeing the results: doors shuttering and rents retreating. This trend will continue for the foreseeable future and may even accelerate.”
