Most retailers earn about 40 percent of their annual sales during the critical November to December sales period. And with many buyers tightening their belts over the shaky economy and uncertainty over the fiscal cliff negotiations, holiday sales underperformed. That’s put a lot of stores — and jobs — on the chopping block.
The website 24/7 Wall Street has analyzed the holiday sales data from America’s largest retailers and found eight that it believes won’t be profitable next year if they keep their current location counts. 24/7 analyzed the retailers’ store counts, recent financial data, online presences, prospects against direct competitors and precedents set by other large retailers that have downsized by shuttering locations and then forecast how many stores each retailer will have to close this year to sharply increase its prospects financially, even if some of those location closings do not occur for several years. These forecasts were based on drops in same-store sales, drops in revenue, a review of direct competitors, Internet sales and the size of cuts at retailers in the same sector, if those were available.
It anticipates these retailers will close between 2,190 and 2,665 locations in the coming months:
- Best Buy—Forecast store closings: 200 to 250
- Sears Holding Corp.—Forecast store closings: Kmart 175-225, Sears 100-125
- J.C. Penny—Forecast store closings: 300-350
- Office Depot—Forecast store closings: 125-150
- Barnes & Noble—Forecast store closings: 190-240
- GameStop—Forecast store closings: 500-600
- OfficeMax—Forecast store closings:150-175
- RadioShack—Forecast store closings: 450-550
Store closings don’t necessarily portend a store’s demise. Gap announced in 2011 it would have to close 21 percent of its U.S. stores. It has since transformed itself into a successful clothing retailer.