The new year for brick-and-mortar retailers is picking up right where 2024 left off, as a slew of stalwart brands are set to shutter dozens of store locations amid shifting consumer patterns.
The latest crop of closures are being led by fabrics and crafts retailer Joann, which said this week it was shuttering 500 locations in 49 states as part of a second go-around in Chapter 11 bankruptcy reorganization.
“This was a very difficult decision to make, given the major impact we know it will have on our team members, our customers and all of the communities we serve,’ the company said in a statement. ‘A careful analysis of store performance and future strategic fit for the company determined which stores should remain operating as usual at this time. Right-sizing our store footprint is a critical part of our efforts to ensure the best path forward for Joann.”
Joann first filed for bankruptcy protection last March to address a heavy debt load, shrinking revenues and what it described as an “uncertain consumer environment.” It announced another Chapter 11 filing last month, this time with the goal of finding an entity to acquire all of its assets.
‘The last several years have presented significant and lasting challenges in the retail environment, which, coupled with our current financial position and constrained inventory levels, forced us to take this step,’ it said in a release accompanying its latest filing.
Meanwhile, JCPenney separately said this week it was closing a handful of stores, with an initial batch of eight to go under depending on “expiring lease agreements” and “market changes.”
“While we do not have plans to significantly reduce our store count, we expect a handful of JCPenney stores to close by mid-year,” the company said in a statement.
JCPenney emerged from bankruptcy in 2020; last month, it announced it was merging with the group that operates other retail brands, including Aéropostale and Brooks Brothers.
In the first nine months of its current fiscal year, JCPenney’s adjusted earnings tumbled nearly 64% to $66 million.
Those results reflect an overall physical retail environment that continues to deteriorate. According to Coresight Research, as many as 15,000 retail locations could close this year, nearly doubling the count for 2024, which were already the most since 2020, the first year of the Covid-19 pandemic.
“Inflation and a growing preference among consumers to shop online to find the cheapest deals took a toll on brick-and-mortar retailers in 2024,” Coresight Research CEO Deborah Weinswig said in a release last month. “Last year we saw the highest number of closures since the pandemic. Retailers that were unable to adapt supply chains and implement technology to cut costs were significantly impacted, and we continue to see a trend of consumers opting for the path of least resistance.’
She said customers are running out of patience for stores that are ‘constantly disorganized, out of stock, and that deliver poor customer service.’
‘We have seen Shein and Temu capture market share as consumers choose to shop online to save time, money, and avoid frustration,’ she said.
In the first weeks of 2025, Coresight was already tracking about 30% fewer openings and more than triple the number of closures compared with the same period last year.
Other closures announced late last year or planned for 2025 include Party City, Big Lots, Kohl’s and Macy’s.
