The scale of the upheaval across much of the US retail sector has been laid bare by figures showing that about one in 10 listed companies has gone bankrupt since 2008 and the value of shopping malls has tumbled 30 per cent in the past three years.
About half of department stores in malls are predicted to close and another 500,000 retail jobs cut by 2025 in two industry reports that warn the disruption is set to accelerate.
Retail sales overall have been buoyant as shoppers have moved online, but trade credit insurer Euler Hermes said the rise of ecommerce had benefited a small number of companies and hurt profitability across much of the sector.
Amazon will this week provide details of its performance over the holiday shopping season, which founder Jeff Bezos has described as “better than ever”.
The group is forecast to record a 19 per cent year-on-year rise in quarterly revenues to a record $86bn, although the rollout of one-day shipping is expected to dent profit margins.
The earnings report was likely to show that Amazon’s retail business was “accruing most of the benefit” from an industry-wide spike in online orders, said Youssef Squali, analyst at SunTrust. Holiday ecommerce sales jumped nearly 19 per cent, according to Mastercard.
Euler Hermes, whose report excluded food and drug retailers, found online shopping had pressured margins across the sector. Pricing pressure has intensified and retailers have had to invest in technology and logistics while contending with higher delivery costs.
It said profits margins at more than two-fifths of US-listed retailers had contracted since 2008 while about a tenth had filed for bankruptcy protection.
In a sign of growing concern in the property industry over the fallout, real estate consultants Green Street warned in a separate report that US shopping malls were facing a “death spiral”.
Shopping mall values had dropped about 30 per cent since a peak reached three years ago, which it said was an “unprecedented decline in an economic expansion”.
While ecommerce accounted for about 11 per cent of total retail sales, it noted, its share for products typically purchased in shopping malls was about 25 per cent and the consultancy forecast this would rise above a third by 2024.
Department stores in particular have struggled to adapt and still occupied more than 250m sq ft in US malls, about 30 per cent of the total, Green Street said. Sears and JCPenney, two of the worst-performing chains, alone account for about a tenth.
“Fundamentals for lower-quality malls are deteriorating quickly,” Green Street added. “Accelerating department store closures are inevitable.”
While some chains, such as digitally-native retailers, were expanding, they were “not interested in taking space in these [weaker] properties at almost any rent” and there were limited options to convert unpopular sites to be used by other types of tenant.
However, several retailers have said they have been transitioning to the age of ecommerce and better integrating their online businesses with their bricks and mortar presence.
Craig Johnson, founder of the Customer Growth Partners consultancy, said the sector was adapting and that many of the store closures would have happened even “if there had never been an internet”.
“The US has been over-stored versus capacity for 30 years now,” he said. “There are always going to be winners and losers in retail — whether online, in stores, or both.”
Retail - Latest - Google News
January 28, 2020 at 12:15AM
https://ift.tt/2uAXXeM
Scale of US retail upheaval laid bare as bankruptcies grow - Financial Times
Retail - Latest - Google News
https://ift.tt/2JDvGsM
Shoes Man Tutorial
Pos News Update
Meme Update
Korean Entertainment News
Japan News Update
No comments:
Post a Comment