Retail store closures in the United States - statistics & facts
The retail trade industry in the United States is no stranger to companies going bankrupt and store branches closing permanently, resulting in mass reductions in retail employment. In fact, following the financial crisis of 2007-2008, U.S. retail saw a record number of bankruptcies and a degree of normalcy came about only after 2010. After a decade of relative stability and progress, the retail industry is once again at the forefront of economic disruption caused by the ongoing coronavirus (COVID-19) crisis, with non-essential segments such as department stores and apparel bearing the brunt of containment measures and limited consumer activity. In 2020, the largest two bankruptcies in the industry happened for department store chains JCPenney and Neiman Marcus. Both companies had assets of over 7.5 billion U.S. dollars when they filed for Chapter 11 in mid-2020.
Bankruptcies, closures: biggest financial struggles in retail
To date, JCPenney is one of the biggest U.S. retailers to have come out of the coronavirus crisis with losses. After announcing its bankruptcy in May 2020, the company announced the closure of 242 of its stores across the United States. The long-established retailer was later on bought out by the commercial retail estate big names Brookfield Property and Simon Property Group. For the remainder of struggling retailers, while a clear sign of financial dire straits, retail store closures were not always caused by bankruptcies or insolvencies. Inditex Group, GameStop, Signet, and L Brands are among those retailers that reduced the size of their store presence during 2020 as a way of combating the economic impact of the pandemic on their financials.
The state of retail employment during the pandemic
The pandemic hit apparel and clothing retailers, and more conventional retail formats like department stores harder than any other segment within the industry. Overall, the most drastic change in retail trade employment happened in April 2020, with the monthly number of employees in all segments of the industry dropped by more than two billion compared to the previous month. As the initial shock of the spread of the virus and subsequent lockdown subsided, retail employment figures went up, but never as far as pre-pandemic levels. More detailed data shows that food and beverage stores continued taking on more employees, with consistent positive net changes observed in this segment over 12-month, 6-month, 3-month, and 1-month periods since February 2020. On the other hand, despite a positive comeback in employment figures over the 6-month period until February 2021, clothing stores were responsible for nearly 300,000 job losses. In the United States, the retail workforce is predominantly made up of salespersons and cashiers.
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