For many U.S. retailers, the sales situation is so bad that it is not a question of whether they will cut stores, but when and how many.
After years in an unsteady economic climate, being battered by e-commerce on one hand and more effective bricks-and-mortar competitors on the other, these chains need the relief that shrinking can provide.
But widespread store closings don't always portend the end for a chain. For example, Gap (GPS) announced in 2011 it would shutter 21% of its U.S. store base. It has since transformed itself into a much more successful clothing retailer. As a company completes the process of downsizing, its store operations likely will become even more efficient and its margins greater.
Whether it saves them or not, only time will tell. But these are the eight retailers that will close the most stores in 2013.
Methodology: 24/7 Wall St. reviewed the weakest large U.S. retailers and picked those that likely will not be profitable next year if they keep their current location counts. 24/7 analyzed the retailers' store counts, recent financial data, online presences, prospects against direct competitors and precedents set by other large retailers that have downsized by shuttering locations. We then forecast how many stores each retailer will have to close this year to sharply increase its prospects financially, even if some of those location closings do not occur for several years. These forecasts were based on drops in same-store sales, drops in revenue, a review of direct competitors, Internet sales and the size of cuts at retailers in the same sector, if those were available.
-- Douglas A. McIntyre, Samuel Weigley, Alexander E.M. Hess, Michael B. Sauter
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