February 4, 2010
More store closings are expected. This doesn’t come as much of a surprise. Given the percentage of sales retailers ring up during the holiday season, it was obvious it would have been wise to get through the holiday season and then put the wheels of closure back in action.
Bloomberg has a pretty cool little multimedia presentation on store closures. The methodology in their model might be a bit skewed, but the model predicts that there are 10% too many stores in the US. Obviously this is a macro number that is not reflective of individual markets, but after having done retail deals in markets such as Sacramento and Southern California, it’s easy to see that some areas are simply overbuilt – and over-leased – as far as retail is concerned.
If you’re a retail investor, it’s probably too early to begin to assume things are turning around and forget about credit quality.
The page is not embeddable, so click here to take a look.
- Fresh & Easy Stores Sales Well Below Expectations
- Pershing Square on The Outlook For Mall REITS
- Retail Squeeze: Retail Assets Fall Into Distress
- Starbucks Closing 600 Stores in the United States
- Mervyn’s to Liquidate and Close; 3000 Northern California Employees Affected