Garnet Capital Advisors Blog

Several retail stores have closed, with many more expected to come in 2019.

Anyone following the news will regularly hear of continued brick-and-mortar retail store closures, many of which are big names in the retail sphere that are seemingly dwindling by the minute. And the wave of retail store closures only seems to be getting started, as more are expected well into 2019 and beyond.

Stores like Victoria's Secret, The Gap, and even Starbucks have already started shutting down many locations, with more to come in 2019. Even businesses like Foot Locker, which recently reported sales growth that was more than double what was expected, is still closing a number of its stores across the country.

So far this year, over 4,810 US store closures have been announced, according to market research firm Coresight Research. Up to this point 2019, that's a 23 percent increase in store closures from the same time last year.

For retail stores that are still open for business, that means taking a hard look at their positions and even repurposing their properties in hopes of keeping revenue streams alive. But such an endeavor of redevelopment will require significant capital, which is why businesses will need to strengthen their loan portfolios and make sure they're prepared for such inevitable challenges.

Big-name stores like The Gap have already closed many locations and have plans to shut down many more this year.

Even though there are plenty of stores that are doing fine in the retail sphere, there's work to be done to be more efficient and seriously consider investing in online platforms to keep up with the Joneses. With online retail giants like Amazon taking a huge chunk of the pie, brick-and-mortar stores that haven't already invested in online channels may want to start doing so.

It's a trend that doesn't seem to be fizzling out anytime soon. In fact, it's just the opposite: with digital technology taking over just about every aspect of life — including shopping — retailers would be wise to step up their e-commerce game.

Retail itself is not a dying breed. In fact, retail sales actually increased by 4.6 percent in 2018 in the US to a total of $3.68 trillion. Instead, it's the way in which consumers are buying that has put retailers in a position to rethink their strategy.

The fact that stores are closing is obviously a serious matter and one that has retailers legitimately concerned about their fate. But by positioning themselves appropriately and preparing themselves accordingly for the challenges that currently face retailers, the changing landscape doesn't have spell disaster.

Instead, by working with a seasoned loan advisor, like Garnet Capital, retailers with a robust loan portfolio can withstand such these trials and ride the wave of change that the retail realm is currently undergoing and will continue to experience into the near future.

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