The Traditional American Retailers Seem To Be Out Of The Cold Winter And Are Facing A Serious Crisis.

The traditional American retailers seem to be out of the cold winter and are facing a serious crisis.

According to Coresight Research, a consultancy, after the brief growth in 2018, the US entity retail industry began to accelerate its offline stores in 2019.

By the beginning of April, US retailers have announced 5994 stores and 2641 new stores this year.

By contrast, 5864 stores closed in 2018 and 3239 stores opened.

This means that the number of shops that the United States closed in early April 2019 has exceeded the sum of 2018.

It is predicted that by the end of 2019, the total number of retail outlets in the US will reach about 1.2.

In addition, 11 retailers have applied for bankruptcy or liquidation this year.

There are many retail businesses that plan to close in 2019, such as Gymboree, Wei Ming, Gap, Nordstrom and Messi stores.

Gap group announced in December last year that it will officially close its flagship store in Fifth Avenue, New York, in January 20th this year. Art Peck, the group's chief executive, admits that its brand performance continues to be under the pressure of physical retail rents and will close hundreds of stores to improve its profitability.

It is reported that the Gap brand plans to close 230 stores in the next two years. Its annual revenue will be reduced by about 625 million US dollars, but it will save nearly 90 million US dollars in operating costs. Similarly, Banana Republic, which is just as depressed as Gap brand, will also close some stores, but the group has not disclosed any specific data.

In addition, the market share of American sexy underwear brand is rapidly eroding with the change of consumers' preferences.

Compared to the Internet underwear brand ThirdLove, which has been invested by LVMH's investment company L Catterton and other funds, and the US retail giant Target announced the launch of three underwear brands, its target revenue is over $1 billion a year.

The net profit of its parent company L Brands fell by 34.5% to 640 million dollars a year, less than analysts expected.

In order to revive the L Brands, it said it would close the redundant stores actively and shut down 53 stores in the North American market this year.

In the past 10 years, it has opened 820 stores, closed 673 stores, and sold 130 stores.

Too many physical stores have long been a fast fashion Zara burden.

According to documents submitted to the Spanish stock exchange by Inditex group of Zara parent company, the rental cost of operating entities increased by 1.4% to 2 billion 392 million euros last year, or about 18 billion yuan, which is 10% of total revenue. The gross profit margin of the group has declined for 3 consecutive years since 2016.

Earlier this year, the brand closed its first flagship store in New York.

In addition to the shops, the number of employees in the retail industry has been the first in the United States this year.

According to Challenger, Gray&Christmas, a training company, in the first two months of this year, the US retail industry has laid off more than 40 thousand people, 92% higher than the same period last year.

The company pointed out that since the second half of 2018, retail layoffs have been on the rise.

In fact, the overall situation of the US retail industry has been in trouble.

According to the data released by the US Department of Commerce on Monday, US retail sales fell 0.2% in February, not up to an expected 0.3% increase.

The analysis shows that the negative growth of sales data shows that the US $1 trillion and 500 billion tax reduction in January 2018 and the government's incremental plan have significantly weakened the stimulus to the economy.

Coresight Research founder Deborah Weinswig reported to the British financial times that "there are fundamental problems in the economy, and this phenomenon can be pmitted to the whole industry."

UBS said that after 10 years of decline, although the retail sales in the US retail sector grew briefly in 2018, the growth rate of offline stores is unlikely to continue due to the gradual weakening of stimulus. This will also lead retailers to accelerate the closing of stores in the future.

It is clear that retail sales in the US are no longer a day off. Over the past few years, tens of thousands of retail outlets closed in New York have been replaced by most of the more powerful American chain stores.

In addition, it is undeniable that the pformation of consumer spending habits to the mobile terminals has created opportunities for retailers, and has also caused great pressure on offline retail businesses.

Many of the department stores and other retailers traditionally have been the backbone of shopping districts are shrinking or have collapsed.

According to CNBC, Amazon's retail sales in the United States increased by 35 billion US dollars in 2018, equivalent to the sales volume of 7700 physical retail outlets.

Coresight Research released an investigation report that Amazon has successfully defeated WAL-MART, becoming the most popular clothing retailer for American consumers.

According to the latest survey by UBS, by 2026, online sales will account for 25% of the total sales of the United States, which will lead to the closure of some 7.5 000 stores in the United States. Clothing stores are the most severely hit, with an estimated 2.1 outlets closed, accounting for 17% of all clothing stores in the United States.

Meanwhile, the vacancy rate of Fifth Avenue in New York has risen sharply since last year due to the high rent.

High rents destroyed New York's "block culture" and indirectly destroyed the once brilliant American fashion.

Affected by this, Ralph Lauren and L Brands's luxury handbag brand Bendel, located in the flagship store of Fifth Avenue in New York, was closed last year.

The rise of vacancy rate also occurs in large shopping centers in the United States.

Real estate data company Reis Inc.2018 conducted an investigation of 77 major cities and surrounding areas in the United States, and found that the vacancy rate of the US shopping centers rose to 8.4% in the first quarter of 2018, the highest level since the fourth quarter of 2012.

A survey shows that shopping centers have been fighting for brands such as apple to increase their traffic volume. However, due to the problem of rentals, such brand pactions are becoming more difficult.

In addition to the reasons for its poor management, the economic environment and industry changes have also brought a great impact to the fashion retailing industry in the US.

John Collins, co-founder and chief product officer of Thasos, also said retailers began to reduce discounts, which may be one of the reasons for the decline in shopping center traffic.

The British traditional retail industry is also being hit hard.

According to foreign media, Arcadia, the UK's fast fashion Topshop parent company, has begun subleasing 67 stores in the prime locations of its 570 UK stores, and hopes that other stores that can maintain operations can reduce about 30% rents. As an exchange of Arcadia, the group will provide the largest 20% stake in the group, but the landlords have not indicated whether they accept this condition.

British fashion retailers such as New Look, French Connection, LK Bennett and House of Fraser have filed for bankruptcy protection or have been sold for sale. Martha has planned to close 100 British stores or cut 1000 jobs.

According to the report, since the beginning of this year, Payless, Gymboree, Charlotte Russe and Shopko have already closed 3720 stores.

Family Dollar will close 359 stores this year, and Signet Jewelers will close 159.

Deborah Weinswig, chief executive of Coresight Research, said that the tide of closing stores may last for quite some time.

CNBC pointed out in the report that the difficulties faced by traditional retailers may not be impossible to solve, but they must begin to rethink and completely change the way of operation.

UBS believes that the era of online retailer sales has arrived, while offline stores should be as small as possible, and inventory should be as few as possible. The main line is commodity display, which will be a supplement to online sales.