“Biggest Drop In More Than Nine Years”: America’s Retail Apocalypse Is Greatly Accelerating In The Early Stages Of 2019 - Michael Snyder

“Biggest Drop In More Than Nine Years”: America’s Retail Apocalypse Is Greatly Accelerating In The Early Stages Of 2019 Posted: 14 Feb 2019  Michael Snyder All over America retailers are going bankrupt and closing stores.  Of course, this has been happening for years, but as you will see below the numbers have dramatically escalated during the early portion of 2019.  Our landscape is already littered with countless numbers of hollowed out stores and abandoned malls, and it is about to get a whole lot worse. Retailers were hoping that a strong holiday season would turn things around, but that didn’t happen.  In fact, we just learned that retail sales in the United States suffered “their biggest drop in more than nine years” during the month of December… U.S. retail sales recorded their biggest drop in more than nine years in December as receipts fell across the board, suggesting a sharp slowdown in economic activity at the end of 2018. The Commerce Department said on Thursday retail sales tumbled 1.2 percent, the largest decline since September 2009 when the economy was emerging from recession. Every time I write an article like this, a few commenters chime in and blame this entire trend on the rise of online retailing.  And without a doubt, online retailing has been growing in recent years, but it still accounts for less than 10 percent of the entire industry. If online retail sales were to blame for this latest drop, you would expect to see that reflected in the numbers.  But instead, when we look at the numbers what we find is that online retailers experienced “the biggest drop ever” during the month of December… December online internet sales (non-store retailers) tumbled 3.9% MoM – the biggest drop ever So brick and mortar retail sales are going down and online retail sales are going down. It is starting to smell a lot like a recession, and many in the industry are starting to panic. And when I say panic, I mean that they are closing stores at a pace that is far faster than last year.  In fact, so far retail store closings are 23 percent ahead of the pace set last year… Coresight Research released an outlook of 2019 store closures Wednesday, saying there’s “no light at the end of the tunnel.” According to the global market research firm’s report, six weeks into 2019, U.S. retailers have announced 2,187 closings, up 23 percent compared to last year. Those closings include 749 Gymboree stores, 251 Shopko stores and 94 Charlotte Russe locations. Unfortunately, the number of store closings is about to double because Payless ShoeSource plans to declare bankruptcy and shut down 2,300 stores… U.S. discount retailer Payless ShoeSource Inc plans to close all of its approximately 2,300 stores when it files for bankruptcy later this month for the second time in as many years, people familiar with the matter said on Thursday. And Payless is far from alone.  If you can believe it, the number of retail bankruptcies in 2019 is “already at one-third of last year’s total”… Bankruptcies also are continuing at a rapid pace “with the number of filings in the first six weeks of 2019 already at one-third of last year’s total,” the report states. Ladies and gentlemen, this is what a retail apocalypse looks like, and we are still in the early chapters. It is going to take some time for this drama to fully play out.  Just look at Sears – it is a money bleeding zombie of a company, but Eddie Lampert has convinced investors to give things one more try.  But they are going to zero, and so is JC Penney, and so are a whole host of other major retailers. In the end, millions upon millions of square feet of retail space is going to be sitting vacant.  Some of the more economically depressed areas of the country are going to closely resemble ghost towns, and we are going to see a commercial real estate crisis that is off the charts. Switching gears, we also just learned that the number of Americans that are at least 90 days behind on their auto loans is already “more than 1 million higher” than it was during the peak of the last recession… More than 7 million Americans are 90 days or more behind on their vehicle loans as of the end of 2018, according to data released Tuesday by the New York Federal Reserve. That’s more than 1 million higher than the peak in 2010 as the country was recovering from its worst downturn since the Great Depression. How is that possible? I thought that the U.S. economy was supposed to be “booming”. Isn’t that what they have been telling us? In recent weeks I have repeatedly brought up current economic numbers that are even worse than the last recession, and yet so many people out there continue to insist that everything is just fine. No, everything is definitely not “just fine”. Economic activity is slowing down dramatically, and many believe that things are about to get a whole lot worse.  In fact, Peter Schiff is warning that what is ahead “is going to be worse than what we now call the Great Recession”… People are going to realize that we checked into the monetary roach motel that I talked about from the beginning and that there’s no way out, and then the dollar is going to fall like a stone. When they find out that it’s never over and it didn’t work, then there’s going to be nothing propping up the dollar and it’s going to drop like a stone, the price of gold is going to take off, and the recession that we’re entering into, which is going to be an inflationary recession, is going to be worse than what we now call the Great Recession. Maybe it’s taken longer than we might have thought to play out, but this is the beginning of the end.” I wish that I had better news for you today, but I don’t. The retail apocalypse is accelerating, America’s debt crisis is starting to reach a critical level, and very challenging days are approaching for all of us. About the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News.  From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time. The post “Biggest Drop In More Than Nine Years”: America’s Retail Apocalypse Is Greatly Accelerating In The Early Stages Of 2019 appeared first on The Economic Collapse.

77 Million Square Feet Of Retail Space And Counting – America’s Retail Apocalypse Is Spiraling Out Of Control In 2018 - Michael Snyder THE ECONOMIC COLLAPSE BLOG

77 Million Square Feet Of Retail Space And Counting – America’s Retail Apocalypse Is Spiraling Out Of Control In 2018

Posted: 21 May 2018 Michael Snyder  THE ECONOMIC COLLAPSE BLOG

In 2017 we absolutely shattered the all-time record for retail store closings in a single year, and this year it looks like we are going to shatter the record once again.  In fact, there are some that are projecting that up to 9,000 retail stores could close by the time that we get to the end of this calendar year.  Already, the amount of retail space that has shut down is simply jaw-dropping.  If you total up all of the retail store closings that have been announced so far in 2018, it accounts for 77 million square feet of retail space. 

Let that number sink in for a bit.  Many shopping centers and strip malls around the country already have a post-apocalyptic feel to them, and more “space available” signs are going up with each passing day.  And in case you are tempted to think that I am making this figure up, here it is straight from Bloomberg…

At last count, U.S. store closures announced this year reached a staggering 77 million square feet, according to data on national and regional chains compiled by CoStar Group Inc. That means retailers are well on their way to surpassing the record 105 million square feet announced for closure in all of 2017.

In the end, we could shatter the all-time record that was established just last year by 20 or 30 million square feet.

At moments such as this, the phrase “retail apocalypse” doesn’t really seem to fit the gravity of what is actually taking place.

And unfortunately for the retail industry, it doesn’t appear that this crisis is going to end any time soon.  Here is more from Bloomberg…

And with shifts to internet shopping and retailer debt woes continuing, there’s no indication the shakeout will end anytime soon. “A huge amount of retail real estate in the U.S. is going to meet its demise,” says James Corl, managing director and head of real estate at private equity firm Siguler Guff & Co. Property owners will “try to re-let it as a gun range or a church—or it’s going to go back to being a cornfield.”

Will retail real estate be the trigger for the next great debacle on Wall Street? Some people think so.

A lot of major retail projects are going to go belly up, and somebody is going to be left holding the bag.

And the warning signs are definitely there.  In fact, retail sector debt defaults set a brand new record during the first quarter of 2018…

Financial stress in the retail industry is at a historic high.
Moody’s said in a report on Tuesday that retail sector defaults hit a record high during the first three months of 2018 as the rise of e-commerce and decline of malls continues to eat away at profits.

But the mainstream media is telling us that the U.S. economy is in great shape, and so everything is going to work out okay, right?

Sadly, nothing has changed regarding the long-term trends that are eating away at our economy like a cancer.  Just a few days ago I wrote about a brand new report that found that nearly 51 million U.S. households “can’t afford basics like rent and food”.  The real reason why our retailers are in decline is because the middle class is being systematically destroyed.  Once upon a time the middle class had plenty of discretionary income, but now the middle class is disappearing right in front of our eyes, but most of us are in such a state of denial that we won’t even admit what is happening.

Hopefully as stores continue to close by the hundreds people will start waking up.  The following is a list of just some of the major retailers that are closing stores in 2018…

• Abercrombie & Fitch: 60 more stores are charted to close
• Aerosoles: Only 4 of their 88 stores are definitely remaining open
• American Apparel: They’ve filed for bankruptcy and all their stores have closed (or will soon)
• BCBG: 118 stores have closed
• Bebe: Bebe is history and all 168 stores have closed
• Bon-Ton: They’ve filed for Chapter 11 and will be closing 48 stores.
• The Children’s Place: They plan to close hundreds of stores by 2020 and are going digital.
• CVS: They closed 70 stores but thousands still remain viable.
• Foot Locker: They’re closing 110 underperforming stores shortly.
• Guess: 60 stores will bite the dust this year.
• Gymboree: A whopping 350 stores will close their doors for good this year
• HHGregg: All 220 stores will be closed this year after the company filed for bankruptcy.
• J. Crew: They’ll be closing 50 stores instead of the original 20 they had announced.
• J.C. Penney: They’ve closed 138 stores and plan to turn all the remaining ones into toy stores.
• The Limited: All 250 retail locations have been closed and they’ve gone digital in an effort to remain in business.
• Macy’s: 7 more stores will soon close and more than 5000 employees will be laid off.
• Michael Kors: They’ll close 125 stores this year.
• Payless: They’ll be closing a whopping 800 stores this year after recently filing for bankruptcy.
• Radio Shack: More than 1000 stores have been shut down this year, leaving them with only 70 stores nationwide.
• Rue 21: They’ll be closing 400 stores this year.
• Sears/Kmart: They’ve closed over 300 locations.
• ToysRUs: They’ve filed for bankruptcy but at this point, have not announced store closures, and have in fact, stated their stores will remain open.
• Wet Seal: This place is history – all 171 stores will soon be closed.

A lot of people are blaming online retailers such as Amazon.com for the decline of brick and mortar stores, and without a doubt online sales are rising, but they still account for less than 10 percent of the entire retail industry.

And it isn’t just retailers that are closing locations.

Personally, I was greatly saddened when it was announced that Subway was planning on shutting down 500 locations in the United States…

Feeling the need to improve its store fleet amid intense competition in the sandwich industry, Subway is planning to close 500 U.S. locations this year, according to Bloomberg News.
Subway restaurants are small in size, but ubiquitous. The chain is the largest in the U.S. by store count of any quick-service chain with nearly 26,000 locations, well above the 14,000 McDonald’s (mcd, +0.29%) restaurants in this country. This has long been a point of pride for the company.

I have always been a big fan of Subway, and if they ever closed my hometown location I would be seriously distressed.

And banks are closing locations at an astounding rate as well.  In fact, from June 2016 to June 2017 the number of bank branches in the United States fell by more than 1,700.
That was the biggest decline that we have ever seen.

If the U.S. economy really was in good shape, none of this would be taking place.  Something really big is happening, and what we have seen so far is just the very small tip of a very large iceberg.

Michael Snyder is a nationally syndicated writer, media personality and political activist.  He is the author of four books including The Beginning Of The End and Living A Life That Really Matters.

Why America’s Retail Apocalypse Could Accelerate Even More In 2018 - Michael Snyder THE ECONOMIC COLLAPSE BLOG

Why America’s Retail Apocalypse Could Accelerate Even More In 2018 Posted: 13 Nov 2017 Michael Snyder  THE ECONOMIC COLLAPSE BLOG Is the retail apocalypse in the United States about to go to a whole new level?  That is a frightening thing to consider, because the truth is that things are already quite bad.  We have already shattered the all-time record for store closings in a single year and we still have the rest of November and December to go.   Unfortunately, it truly does appear that things will get even worse in 2018, because a tremendous amount of high-yield retail debt is coming due next year.  In fact, Bloomberg is reporting that the amount of high-yield retail debt that will mature next year is approximately 19 times larger than the amount that matured this year… Just $100 million of high-yield retail borrowings were set to mature this year, but that will increase to $1.9 billion in 2018, according to Fitch Ratings Inc. And from 2019 to 2025, it will balloon to an annual average of almost $5 billion. The amount of retail debt considered risky is also rising. Over the past year, high-yield bonds outstanding gained 20 percent, to $35 billion, and the industry’s leveraged loans are up 15 percent, to $152 billion, according to Bloomberg data. Even worse, this will hit as a record $1 trillion in high-yield debt for all industries comes due over the next five years, according to Moody’s. Can you say “debt bomb”? For those of you that are not familiar with these concepts, high-yield debt is considered to be the riskiest form of debt.  Retailers all over the nation went on a tremendous debt binge for years, and many of those loans never should have been made.  Now that debt is going to start to come due, and many of these retailers simply will not be able to pay. So how does that concern the rest of us? Well, just like with the subprime mortgage meltdown, the “spillover” could potentially be enormous.  Here is more from Bloomberg… The debt coming due, along with America’s over-stored suburbs and the continued gains of online shopping, has all the makings of a disaster. The spillover will likely flow far and wide across the U.S. economy. There will be displaced low-income workers, shrinking local tax bases and investor losses on stocks, bonds and real estate. If today is considered a retail apocalypse, then what’s coming next could truly be scary. I have written extensively about Sears and other troubled retailers that definitely appear to be headed for zero.  But one major retailer that is flying below the radar a little bit that you should keep an eye on is Target.  For over a year, conservatives have been boycotting the retailer, and this boycott is really starting to take a toll… Target has been desperately grasping at ideas to recover lost business, including remodeling existing stores and opening smaller stores, lowering prices, hiring more holiday staff and introducing a new home line from Chip and Joanna Gaines. But Target stock remains relatively stagnant, opening at 61.50 today—certainly nowhere near the mid-80s of April 2016, when the AFA boycott began. In the past, retailers could always count on the middle class to bail them out, but the middle class is steadily shrinking these days.  In fact, at this point one out of every five U.S. households has a net worth of zero or less. And we must also keep in mind that we do not actually deserve the debt-fueled standard of living that we are currently enjoying.  We are consuming far more wealth than we are producing, and the only way we are able to do that is by going into unprecedented amounts of debt.  The following comes from Egon von Greyerz… Total US debt in 1913 was $39 billion. Today it is $70 trillion, up 1,800X. But that only tells part of the story. There were virtually no unfunded liabilities in 1913. Today they are $130 trillion. So adding the $70 trillion debt to the unfunded liabilities gives a total liability of $200 trillion. In 1913 US debt to GDP was 150%. Today, including unfunded liabilities, the figure becomes almost 1,000%. This is the burden that ordinary Americans are responsible for, a burden that will break the US people and the US economy as well as the dollar. The only possible way that the game can go on is to continue to grow our debt much faster than the overall economy is growing. Of course that is completely unsustainable, and when this debt bubble finally bursts everything is going to collapse. We don’t know exactly when the next great financial crisis is coming, but we do know that conditions are absolutely perfect for one to erupt.  According to John Hussman, it wouldn’t be a surprise at all to see stock prices fall more than 60 percent from current levels… At the root of Hussman’s pessimistic market view are stock valuations that look historically stretched by a handful of measures. According to his preferred valuation metric — the ratio of non-financial market cap to corporate gross value-added (Market Cap/GVA) — stocks are more expensive than they were in 1929 and 2000, periods that immediately preceded major market selloffs. “US equity market valuations at the most offensive levels in history,” he wrote in his November monthly note. “We expect that more extreme valuations will only be met by more severe losses.” Those losses won’t just include the 63% plunge referenced above — it’ll also be accompanied by a longer 10 to 12 year period over which the S&P 500 will fall, says Hussman. A financial system that is based on a pyramid of debt will never be sustainable.  As I discuss in my new book entitled “Living A Life That Really Matters”, the design of our current debt-based system is fundamentally flawed, and it needs to be rebuilt from the ground up. The borrower is the servant of the lender, and our current system is designed to create as much debt as possible.  When it inevitably fails, we need to be ready to offer an alternative, because patching together our current system and trying to re-inflate the bubble is not a real solution. Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.