April 30, 2017 at 3:00 AM
(LEVIN MANAGEMENT)
In an editorial a year ago, NJBIZ noted that Sports Authority was hitting the showers and closing its stores. Sports Authority stores? No offense intended, but who remembers them now?
Since then, the drop in brick-and-mortar retail sales and the closing of stores throughout New Jersey has become what we feared just 12 months ago — the new normal.
Reports of store closings come almost daily now. J.C. Penney, Macy’s, Payless, HHGregg, Rue21, Bebe — they all have closed stores in New Jersey and elsewhere in recent weeks. And the pace is accelerating. Credit Suisse has said that more than 8,600 stores will close in 2017 — a deluge worse than the record 6,163 stores that closed in the recession year of 2008. That would translate into 147 million square feet of retail space, the brokerage firm said in a research report. Sears, which owns Kmart — Sears! — has said it has “substantial doubt” that it can survive.
It all reminds us of Ernest Hemingway’s famous line in “The Sun Also Rises” about how a character went bankrupt: “Two ways. Gradually, then suddenly.” Online commerce, of course, is the culprit. Approximately two-thirds of American consumers prefer to shop online, according to surveys.
The bad news about retail stores in New Jersey has been somewhat mitigated by the opening of seven Amazon warehouses in the state in recent years and plans to open three more. The largest so-called Amazon “fulfillment center” opened in Carteret less than two weeks ago, with more than 2,000 employees working in a 1-million-square-foot facility.