All of us know, during COVID retailing has changed, people are not going to the local shops to look, try on and buy clothes. If they are buying they are using e commerce and most established retail chains did not have a great e commerce setting. There were very good reasons, the numbers of users were relatively low and for the most part buying clothing people want to touch the fabric.
In England, 2 major chains collapsed in the space of 24 hours, putting 27,000 jobs at risk and raising concerns the wave of store closing is not finished.
In an article in the Globe and Mail, Paul Waldie wrote, Debenhams which is a 242 year old chain with 124 stores and employing 12,000 people announced it will wind down operations. The company had been in bankruptcy protection since April and was hoping to merge with JD Sport.
The other chain that collapsed was the Arcadia Group which had 2,5000 stores in 14 countries including brands such as Topshop and Dorothy Perkins. Some of their shops were inside Debenhams.
The Center for Retail Research has estimated almost 21,000 stores will close this year and 200,000 jobs lost.
In terms of shopping malls which clothing stores are large users, at least 3 shopping malls have gone into receivership and one of England’s largest mall owners, Intu Properties filed for bankruptcy protection in June.
Debenhams was founded in 1778 in London’s West End and by the 1950’s was the largest department store in Britain. In April 2019 the chain filed for bankruptcy protection, closed down 50 stores and letting go 13,000 people. 5 years ago, Debenhams was the 6th largest clothing retailer in the UK, now it is not in the top 10, said Chloe Collins, a senior retail analyst at GlobalData Retail. At the moment the top retailer in the UK is John Lewis.
Linking to dividend paying stocks, there were multiple reasons why the department store is leaving, but given its long years in the public eye, people have a connection to the store. Similar to most department chains, times have changed and in the case of retail, we all know chains have a problem but there is something in us that makes want to survive. Sometimes you think about the assets it has, can they be enhanced, if management was changed or new investments would that do it, but if you were an investor in the retail world, once the chain is not long the “it” store, it is time to find alternatives
There are more questions than answers, till the next time – to raising questions.