'People aren't spending': stores close doors in 'oversaturated' US retail market

[nitpicker]

https://www.theguardian.com/us-news/2017/mar/26/us-retail-stores-market-macys-sears

'People aren't spending': stores close doors in 'oversaturated' US retail market

Edward Helmore in New York

Sunday 26 March 2017 12.15 BST Last modified on Sunday 26 March 2017 19.52 BST

Canal Street was never a high-end retail experience. But, like many streets in New York City and in cities across the US, it is becoming increasingly desolate. Boarded-up stores line the thoroughfare that bisects much of lower Manhattan. Many stores that are still open for business also display signs that read “for lease” or “for rent”. “It’s not Trump,” said one downcast store-owner recently. “It’s not the economy. Something else is happening. People aren’t spending.”

This week, Credit Suisse downgraded the retail sector, saying the outlook had become bleaker than it had anticipated in large part because of events in Washington and through discussion of “whether we think the risks of the border adjustment provision in the House corporate tax reform proposal are fully reflected in apparel and retailing stocks”. Other analysts have shown similar pessimism.

Earlier in the month, Richard Hayne, chief executive officer of Urban Outfitters, equated the woes facing retail in 2017 to the housing market of 2008. Hayne traced the problems to over-expansion in the 1990s and early 2000s, noting that the US now had six times the retail space per capita of either Europe or Japan. “The US market is oversaturated with retail space and far too much of that space is occupied by stores selling apparel,” he said, anticipating that retail retrenchment would continue “for the foreseeable future and may even accelerate”.

Urban Outfitters, a Columbus, Ohio-based company that operates roughly 200 locations for stores under its own name and Anthropologie, said that despite sales declines in the single figures, it still planned to open 15 new stores in North America this year. That figure is a drop on previous years but looks rosy next to mass store closings recorded by rivals. In the past several months, Macy’s has announced it will close 63 stores; Sears, 150; The Limited, 250; BCBG Max Azria, 120; Guess, 60; American Apparel, 104; Abercrombie & Fitch, 60; JCPenney, up to 140.

While retail executives are keen to state they do not plan to abandon bricks-and-mortar retail entirely, many now tend to see it on equal terms with online operations. Main Street, hollowed out by web-based competition, is increasingly viewed as a tool to be used by consumers “showrooming” – browsing – before buying online for less.

The cost in jobs is stark, with Macy’s saying it expects to see 10,000 workers laid off, including 6,200 managers, or 17% of executives. “We have been planning this very carefully,” said Jeff Gennette, Macy’s president and new CEO, announcing the cuts. “This is not something we did quickly.”
(snip)

[progree]

1. Is this the beginning of Trump's promised 4% economic growth rate?

There are a lot of reports that undocumented immigrants leaving home as little as possible is having a significant impact.

[TheOther95Percent]

2. And People Grabbing Their Wallets

And huge income inequality...

[Snarkoleptic]

3. The middle class has a huge amount of pent-up demand for goods/services.

If I had the funds on hand, I'd immediately replace windows, carpet and two rooms of furniture.
Looking at the homes in my neighborhood, which was built around 25-years ago, it's not hard to spot a lot of deferred maintenance.
The mad obsession with pushing Trickle-Down "Voo-Doo" economics does nothing to unleash this demand.

[Throck]

7. Sounds like a person who plans.

Most people don't plan beyond the next paycheck. Some I know are well paid and still blow everything.

[HoneyBadger]

9. Of the stores listed, I have not been to a single one in years

Yet I have over 60 orders on Amazon Prime. This year! Retail is done.

[Throck]

4. Yes we need more Walmarts.

More Chinamart imports to fill our houses.

America overspends on crap as is, spend money on fixing problems for people that need it. Fix our schools and infrastructure. Pay off college loans.

[JudyM]

5. We overconsume, and it is causing an enormous landfill problem. Apparel is a key component of this.

[Throck]

6. Conspicuous consumption.

Of course apparel is a landfill problem. Clothing is getting bigger due to empty calories and bad diet.

I remember the day I found out there was a sugar lobby.

[HoneyBadger]

8. Canal street is where you go to buy bootleg designer bags

There has been a crackdown

[pscot]

10. We all have way more stuff than we need

[Warpy]

11. Oh, FFS, the market isn't oversaturated. People are UNDERPAID

The retail infrastructure is drying up because people can't afford to shop for anything but bare essentials and then at the cheapest price possible.

It's the DEMAND SIDE, people. Get it through your thick skulls.

[JNelson6563]

12. I was at the mall recently

A very rare event. took time to really look around and was astonished to see so much valuable real estate in the stores taken up with props. Not product displays but props. And inventory was thin.

[AnnaLee]

13. How do I rationalize the consumer confidence numbers?

[link:http://www.cnbc.com/2017/03/28/us-consumer-confidence-hits-1256-in-march-vs-estimate-of-114.html|

Consumer confidence soars in March to highest level since December 2000