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ICSC Predicts 144,000 Stores Will Shutter in 2008Largest Percentage Increase in Store Closures in 14 Years
In last week's CoStar Advisor retail story, titled "4,500 Store Closings….And Counting," CoStar tallied major store closing announcements made by retailers during the first half of 2008. In the report, we estimated nearly 7,100 store closings announcements would be made by the end of 2008.
The data we shared in the story correlated closely to ICSC's first quarter report, which also tallied only major store closing announcements - at the time (April), ICSC estimated 6,500 major store closing announcements would be made by the end of 2008.
Today, ICSC released a "Retail Real Estate Business Conditions" report estimating the number of stores it expects to physically close in 2008, which, in contrast to our report and their earlier report, includes unannounced store closings, small store closures, closures by private and "mom and pop" owners, and estimates actual store closures as opposed to store closing announcements. The new ICSC data is estimated based on its own set of leading indicators and surveys combined with data on the number of business establishments from the Bureau of Labor Statistics.
"ICSC Research projects nearly 144,000 establishments (about 36,000 per quarter) to be shuttered in 2008, which is up 7% from the prior year and the largest increase in at least 14 years for which these data exist," said ICSC in the report. However, the organization is quick to point out that it expects "a similarly large increase in new retail store openings" this year.
"Even if ICSC’s projected jump in store closings occurs in 2008, the number of stores shuttered will still be far below the average closings that occurred between 1993 and 2001. These data suggest that the retail industry is more efficient today and less susceptible to economic storms than in the recent past," said the report.
This article appeared in CoStar's Retail News Roundup: July 13 to 19, 2008. The Roundup is a weekly column covering retail store expansions, closings, bankruptcies, acquisitions/mergers/sales, new retail developments, personnel changes, sustainability, and more. This week in the Retail Roundup, CoStar reports on expansions or new concepts at Walgreens, Subway, Checkers, Saladworks, Ashley Furniture, and Pickles & Ice Cream; new retail developments in AZ, WI, TX, MS, DE and CA; acquisition, merger, loan or sale activity at Gemini Real Estate, Hooters, Max & Erma's, Jones Lang LaSalle and Staubach; closings, cutbacks or bankruptcies at Steve & Barry's, Linens 'N Things, Regis Salons, and Buffet Holdings; personnel announcements at Debartolo, CBL, Agree Realty, Thompson National Properties, Opus North; and more.
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