store closings: March 2009 Archives

The economic downturn is hitting local stores especially hard. Saddest among those affected are the decades-old establishments suddenly facing bankruptcy or liquidation. Recent news affects stores with long histories in jewelry, drugs and menswear:

• In Indiana, Chronister Pharmacy is losing its last outlet. This location has been active for 58 years, and has gone from being a family-run business to a division of Kroger. Customers are being directed to Walgreen's.
• Bromberg & Co., a 110-year-old jeweler in Birmingham, Alabama, has closed its 46-year-old retail store in reaction to the economy.
• Midwestern men's retailer Al Baskin has filed for bankruptcy and closed its Mark Shale store. It is keeping three Chicago stores open and closing all of its out-of-state locations in April.
  

While the turmoil at Dial-A-Mattress has concluded, woes in the bedroom and home goods businesses continue elsewhere. In Indiana, TBO LLC was placed in receivership and its 16 stores shuttered earlier this week. The stores, such as Today's Bedroom One, The Mattress Gallery and Today's Kids, have been closed since Tuesday; the parent company hopes to reopen eight Mattress Gallery locations once court proceedings have concluded.

Meanwhile, Hendricks Furniture is strategically closing stores, including two in North Carolina and all its Florida locations.

Chocolatier Lindt & Sprüngli is closing 50 of its 80 U.S. retail outlets in reaction to a sales downturn. The company, which sells Lindt chocolates and also owns Ghirardelli, is moving to a mall-based retail plan. Lindt's woes do not match those of the greater chocolate industry; competitors such as Nestle are doing well in the current market.

So very, very, very, very many—and all fascinating stories, these are just a few of the going-out-of-business plans of mom-and-pop stores:

De Jong's Furniture of Brantford, Ontario.
Music City Gourmet of Nashville, TN.
Objets Trouvé of New Orleans, LA.

What does all this timely demising and store shuttering and bankrupty look like in the real world of strip-malled avenues? Northeast Ohio's retail spaces now have a 10.3% vacancy rate, an all-time high—and very little of that is due to new construction:

"There is no retail demand from large tenants who want new locations, and developers have problems getting loans for new projects," [CBRE broker Thomas] Flynn said. "Both the demand and supply side (of retail development) are stalled."

Few prospective tenants are around to eat into the vacant space. Only a handful of value-oriented stores, such as Family Dollar and Dollar General, as well as auto parts retailers, are expanding, CB said in its report.

The 129 Boater's World stores in 27 U.S. states are being shuttered. Parent company Ritz Camera Centers Inc. (who knew?) filed for bankruptcy protection last month, and is attempting to raise cash by liquidating the boat stores' inventory. The company will also close 400 of its 800 camera stores.

On the heels of the Dial-A-Mattress drama, bed manufacturer Select Comfort is closing 55 stores in a reaction to lagging sales. Thirty of the store closings are planned for the first quarter, which means the stores will be shut in a matter of weeks. Select Comfort had 470 outlets prior to the announcement.

In New Jersey, pharmacy chain Drug Fair has closed six of 40 locations and reports suggest it is considering a bankruptcy filing. The chain is also selling numerous stores to Walgreen. The store closings began unexpectedly last weekend and continued with in-store announcements today.

Drug Fair, which has a private-equity owner, also operates a dozen Cost Cutter discount stores across the state. Drug Fairs have been open since the 1950s.

Update, March 18: Walgreen is now buying all of Drug Fair and closing 11 locations in total. The rest of the stores will be converted to the Walgreen's name.

Pacific Sun, battling the economic slowdown, is opening just three new stores this year and closing up to 150 underperforming outlets. The teen clothing retailer cites the closings as normal business procedure, but the lack of new-store openings means the chain will be shrinking as a result. PacSun recently discontinued its Demo chain to focus on the core business.

This one just bubbled up: the Metropolitan Museum is closing 15 stores nationwide in a cost-cutting move. The museum only had 23 stores, so this is a substantial resizing. The news resurfaced in conjunction with reports of layoffs and financial losses in the museum's endowment. No operating plans are planned for the museum itself.

Eyeglass maker Luxottica announced 100 or more store closings in response to the global economic slowdown. The impact of the store closings specific to the U.S. market was not disclosed. Luxottica, which makes Ray-Ban, Oakley and other popular brands, expects to close two to three percent of its doors as well as reduce inventory.

Tween Brands, which bought the Limited Too chain in 2007, is closing up to 40 of its Justice stores to cut costs. Most of the closings will be in mall locations with store redundancies. Tween's company value is suffering; its stock may be delisted because its market capitalization is below required minimums.

The credit crisis has impaired Sportsman's Warehouse, a regional outdoor-products retailer in the west. The company is selling 15 of its 67 stores to UFA of Canada, but UFA has not closed the sale. As a result, Sportsman's Warehouse is experiencing a liquidity crisis, and must close 23 of its remaining stores. "We are now a 29-store chain," says CEO Stu Upgaard. The store closings affect a wide swath of states from Idaho to Mississippi.

Handbag maker Lambertson Truex has filed for chapter 11 bankruptcy, citing reduced demand. A company executive said high-end spending had slowed, leading to a cash crunch. Lambertson Truex has closed two retail stores, while parent company Samsonite has kept its New York location. Lambertson Truex handbags can cost up to $18,000.

Ann Taylor is expanding its restructuring program and identified more store closings for 2009. The company--which is not restructuring under bankruptcy bylines--is closing an additional 37 stores in 2009, including 10 Ann Taylor and 37 Loft doors. The overall plan now includes 163 rather than 117 store closings.

Dillard's responded to poor sales and investor pressure by announcing plans to close five stores. The department store chain closed 21 doors in 2008. A handful of store closings are normal in a given year, but Dillard's announcement was timed to respond to the company's performance.

The economic downturn is hitting local stores especially hard. Saddest among those affected are the decades-old establishments suddenly facing bankruptcy or liquidation. Recent news affects regional chains with long histories:

• Cincinnati: luggage store Bankhardt's is closing. The store is 130 years old and has inhabited the same location since 1935. The business owner sold the building and is moving on. Interestingly, three splinter stores with the same name will continue to operate.
• The 16-store jewelry chain Robbins Brothers filed for bankruptcy after struggling during the recession. Robbins Bros' history dates to the 1920s, in Seattle, before moving to California and ultimately expanding to four states.
• In the Pacific Northwest, Joe's Sports and Outdoor is operating during a restructuring. The 30-store chain is owned by a private equity firm that filed as a strategic move. Joe's first opened in 1952 as a military surplus store.

New England retailer Better Bedding is closing more than half its stores as part of a bankruptcy restructuring. The company, which has 21 outlets, is shutting 11 of them and consolidating inventory. Better Bedding cited a 20 percent sales decline as part of the problem. The chain has been in business more than 30 years and is family-owned.

Insiders have revealed that Virgin Megastore will be closing all its locations by this summer. Timely Demise covered three of the six closings last week; specific plans for the other three, in Denver, Hollywood and Orlando, have not been revealed. Billboard.biz reports parent company Virgin Entertainment Group North America will be liquidating in conjunction with the closings.

Even with six stores, Virgin Megastore was among the last and best-known national music chains. All coverage of this news notes what TD spotted last week: that Virgin Megastore's real estate ownership is going to profit more handsomely from increased rent--even in a down market--than it has as a music retailer.