800 Department Stores Need to Close to Restore ’06 Productivity
Here’s some bad news for department stores: According to Green Street’s 2017 Mall Outlook, department store chains need to close about 800 locations to achieve their inflation-adjusted sales productivity level of 2006. This equates to 20 percent of all U.S. mall anchor space, according to the report. Green Street revealed that Sears and J.C. Penney are the biggest culprits behind the industry’s sales productivity gap. Sears needs to close 44 percent of its stores to reach 2006 productivity levels, and Penney's needs to close 32 percent of its locations.
Total Retail’s Take: Department stores have been losing sales to e-commerce and fast-fashion competitors. Sears has been proactive is closing stores — 110 locations so far — but J.C. Penney only shuttered seven stores last year. Recently, J.C. Penney's CEO Marvin Ellison said the company will soon begin closing more stores, but the exact number and locations aren’t known at this time. Any way you cut it, department stores are struggling to survive as consumers’ shopping behaviors shift online.