From iconic brand to popular fast fashion chain, a growing number of popular brands are either closing down their stores entirely, filing for bankruptcy, or shifting their focus to e-commerce as they face unprecedented financial stress due to Covid-19. Below are a few of well-known retail brands that are shutting down stores in 2020:
Recently, H&M announced that the popular fish fashion brand is closing 170 stores in 2020 – 40 more that it had originally planned. H&M reported a 50% drop in net sales approximately RM 1.4 billion during the second quarter of 2020 due to the Covid-19 pandemic. It also said the brand would be cutting back on store openings this year, resulting in a net decrease of 40 stores.
The company further explained the it is now focusing more on its online business instead as changing consumer shopping habits.
The Hong Kong clothing giant brand ESPRIT announced that it will close all 56 shops out in Asia outside mainland China by June 30. The countries affected include Singapore, Malaysia, Taiwan, Hong Kong and Macau.
Those stores represent less than 4% of the group’s global turnover, and the closures are part of the company’s “restructuring initiatives to focus resources and recalibrate operations” amid the pandemic. ESPRIT’s sales in Asia fell 52.2% and 25% globally during the end of the first quarter. The brand had to retrench 1,200 of its staff globally to stay afloat.
3. Victoria’s Secret
Victoria’s Secret is permanently closing a quarter of its stores in the United States and Canada over the next few months. They will be closing down 250 of their stores in the US and Canada. In the UK, the brand closed 25 of its stores and laid off 800 employees.
L Brands (LB), which owns the company, said the 250 store closures might just be the start: It warned it could close more stores over the next few years.
4. La Senza
Canadian fashion retailer La Senza, known for its intimate apparel, is said to be closing 17 stores in Canada in the near future as the parent company, Regent, downsizes the chain. However, La Senza will continue to operate its many remaining Canadian stores across the country, though some landlords have said quite a few stores have been struggling amid increased competition
Gap Inc reported a quarterly loss of nearly $1 billion as the apparel retailer was forced to close its stores due to the coronavirus outbreak. San Francisco-based Gap, which operates nearly 2,800 stores in North America, said 55% of its company-operated stores in the region were now open and sales from online operations were booming.
In 2019, Gap announced its plan to close 230 of its stores worldwide in the next 2 years. However, due to the Covid-19 pandemic, the brand seems to have hastened its store closures as it recorded a 43% drop in the first quarter.
Guess? Inc. plans to close about 100 stores worldwide, or about 9% of its network. The closures will be in North America and China over the next 18 months. Chief Executive Officer Carlos Alberini said that many of the retailer’s leases are set to expire soon, which gives management a chance to renegotiate terms.
Footwear retailer Aldo announced that it is restructuring its operations after shutting its stores in March due to the COVID-19 pandemic. Aldo has filed for protection from creditors in the US and Canada to save its business. They are conducting a restructure so they can continue serving customers.
One of the goals of the restructuring is to “stabilize the business and build on its legacy in retail fashion” according to the release.
Trendy home-goods chain Muji has filed for bankruptcy, making it the latest retailer to do so as the coronavirus crisis decimates the industry. Muji, which sells minimalist decor, stationery and clothing, filed for Chapter 11 bankruptcy protection Thursday in Delaware. The company plans to use the process to emerge with a renewed focus on online sales.
Muji will take this opportunity to refocus their efforts in the United States on key regional markets and e-commerce.