More than 70 million square feet of retail space is already slated to close in 2018, CNBC has reported, largely attributable to the fact that retailers with massive floor plans are the ones shuttering stores.
Walmart‘s Sam’s Club, Sears Holdings and Bon-Ton, for example, operate stores that take up at least 100,000 square feet. Toys R Us’ shops are closer to 50,000 square feet, on average, which is still large by retail standards. The big-box losses are leaving landlords scrambling for replacements, and there aren’t many companies growing at that same scale.
Already this year, Toys R Us is planning to close all of its 800-plus stores across the U.S., Sears is closing 103 stores, Walmart’s Sam’s Club division is closing 63 stores, Bon-Ton is closing 42 stores, Macy’s is closing 11 stores, J.C. Penney is closing 8 stores and Nordstrom is closing one store.
At many of these properties, landlords will opt to divide the bigger spaces among a handful of smaller tenants. Retailers including Target, Kohl’s, Sears and Nordstrom have been opening smaller locations of late, where they can showcase their best merchandise on the floor and market everything else online.
Only four months into the year, industry experts say they expect more store closures to come. The damage is far from done, as companies aim to realign their physical footprints with their e-commerce businesses, only keeping stores open in high-demand markets. And for those still growing, smaller stores are the future.
— Reporting by Lauren Thomas. Data visualization by John Schoen.
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