The pace of retail bankruptcies and store closures in the U.S. has accelerated so far this year when compared against 2018, due in part to last year’s lackluster holiday shopping season, according to a report from professional services firm BDO USA LLP.
The number of store closures from January to June has already exceeded the number of brick-and-mortar stores closed in all of 2018, The Wall Street Journal reports. About 19 retailers announced they would close a total of more than 7,000 stores so far this year, already topping all previous full years, BDO found.
Many of those closures were due to companies filing for bankruptcy, including ShopKo, Charming Charlie and Things Remembered. The bankruptcies of Payless, Gymboree and Charlotte Russe alone led to the closure of about 3,700 stores, according to BDO.
“We’re going to see this trend continue,” says David Berliner, who leads the business restructuring and turnaround services practice of BDO, which provides assurance, tax and advisory services. While retailers are expected to keep falling in the second half of the year, the pace should slow, Berliner says.
Retail sales in the first half of the year were also hit by smaller tax refunds for the average taxpayer, trade tariffs, the longest government shutdown in U.S. history and inclement weather, which led some retailers to offer deep discounts to move merchandise, according to BDO. Read the full story.