A rendering of the Empire Outlets shopping center in Staten Island
Retailers sent out 2018 on an optimistic note, with strong consumer spending and an unexpected comeback of brick-and-mortar stores.
But 5,994 stores have closed in the U.S. so far this year, more than last year’s total of 5,864, the Wall Street Journal reported, citing data from Coresight Research.
“I don’t think malls are out of the woods yet,” S&P Global Ratings analyst Ana Lai told the Journal. S&P has a negative outlook on the U.S. retail sector overall and predicts that about 12 of the 136 retailers it rates will default this year, four times the average annual rate.
As retailers have continued to struggle, mall owners are also facing financial difficulties and others have pushed back their opening dates. The opening of the American Dream retail and entertainment center in the Meadowlands in New Jersey, originally slated for the spring, has been pushed back to late summer. The Empire Outlets shopping center on Staten Island is now scheduled to open in May, after initial plans to open last fall were delayed.
One of the country’s largest malls, Destiny USA in in Syracuse, New York, recently saw its mortgage taken over by a special servicer. While the mall owner, Pyramid Management Group, says it is in discussion for an extension, the servicer is expecting a default in June.
Retailers that have announced plans to close stores this year include Payless ShoeSource, Gymboree Group, and Charlotte Russe Holding. [WSJ] — Kevin Sun