Summary
Year-to-date , the U.S. retail industry saw 3.408 store closings, according to the ICSC. The number of closings is far short of the 10,000 to 12,000 closings many experts projected in late 2008. However this article indicates that 2010 may yet turn out to be even worse.
Analysis
As readers of my earlier articles well know, I have maintained that the media and certain over rated analysts from some big banks have been "crying wolf" for a very long time. And why not ? Controversy and doomsday headlines sells analysts reports.
Now this article confirms two of my major predictions. The first being that the "sky is not falling" and that most of the store closings are due to the last gasps of marginal operators that have been in trouble for a very long time. Most of these troubled retailers are the ones who "over-stored" their markets either by saturating the market such as the Premium coffee shops, or new players attempting to "copy-cat" the more well established and successful retailers.
The second prediction is that many retailers are simply "hanging on" until after Christmas to determine if the world will change and allow them to continue unabated or to "bite the bullet" and start closing all underperforming stores. Sears, Dillards and Bon-Ton fall into this latter category. If they start closing stores in early 2010 GLG News readers should see this as an early warning sign of the closing of many more under performing "C" level malls which will have an immediate impact on the bottom line of most mall REITs.
Kenneth Leonard consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
