Express, a prominent mall retailer, has filed for Chapter 11 bankruptcy protection and plans to close over 100 stores. This news comes amidst a broader trend of retail store closures in the United States. According to Coresight Research, over 2,400 stores are slated to close nationwide in 2024 alone. Convenience stores like 7-Eleven and discount retailers like 99 Cents Only are among the most impacted sectors. Additionally, Dollar Tree and Macy’s have announced plans to close significant numbers of stores in the coming years.
This trend reflects a broader challenge facing brick-and-mortar stores in the digital age: the rise of e-commerce. A study by IMB found that online retail sales have grown at an average rate of 14.6% per year over the past five years, while brick-and-mortar sales have declined by an average of 2.3% per year. Consumers are increasingly turning to online retailers for convenience, wider selection, and competitive prices.
Express is just one of many retailers that have struggled in recent years. Other notable examples include Sears, Toys R Us, and Claire’s. A 2023 McKinsey report cites several factors that contribute to the decline of physical retail, including the rise of online shopping, the popularity of off-price retailers, and changes in consumer preferences.
The interest of mall giants Simon Property Group and Brookfield Properties in acquiring Express’s assets is also interesting. This suggests that they see value in the company’s brand and physical location. However, it is also possible that they are looking to buy these assets at a discount.
Though the future of Express is uncertain, the acquisition by Simon Property Group and Brookfield Properties could provide a lifeline, but the company will need to adapt to the changing retail landscape. This could involve investing in its online presence, offering a more competitive product selection, and catering to the preferences of consumers.
The Express bankruptcy highlights the ongoing challenges faced by brick-and-mortar stores in the digital age. While some may find success through acquisitions or strategic pivots, others may struggle to compete with the convenience and selection offered by online retailers.
References:
IMB retail sales report, 2023
McKinsey report on the decline of brick-and-mortar retail, 2023
