Five Retailers Are Opening Stores for Every Retailer Closing Stores, According to New Research from IHL Group Article originally posted on Business Wire on August 22, 2019 More than five retail chains are opening stores for every retailer that is closing stores in 2019, according to new research from IHL Group. This is up from 3.7 in 2018. The company also reports that the number of chains adding stores in 2019 has increased 56%, while the number of closing stores has decreased by 66% in the last year. Retail Renaissance – True Story of Store Openings/Closings reviewed 1,660 retail chains with 50 or more locations in the United States across nine industry segments. For each retailer, the company measured the total store counts at the end of 2016, 2017, 2018, and plans for 2019 year-end based on company filings and statements. The net total increase or decrease in their store count was noted and that data was tallied across companies. IHL reports that fewer retailers make up the bulk of closures in 2019. In 2018, 20 chains represented 52% of all stores closed. In 2019, the 20 announcing the most closures represent 75% of all closures. “U.S. retail has increased $565 billion in sales since January of 2017, fed not just by online sales growth but net store sales growth,” said Lee Holman, VP of Research for IHL Group. “Clearly there is significant pressure in apparel and department stores, however, in every single retail segment there are more chains that are expanding their number of stores than closing stores.” Since 2017, apparel and department store chains have seen the net closure of 9,651 stores. During this same period, all other segments represented 18,226 net new openings. Additional findings include the following: 64% of retailers are increasing the number of stores in 2019, 12% are decreasing and 24% report no change in store counts. This compares to 2018 with 41% increasing store counts, 37% decreasing and 22% with no change. For every chain closing stores, +5.2 chains are opening stores. Specifically, these ratios by segments include the following: Food/Drug/Convenience/Mass Merchants: +9.5 Apparel, Hard Goods, Department Stores: +3.7 Restaurants, Fast Food, Table Service: +6.3 chains opening vs closing stores 2018 was a peak year in the number of chains closing stores with 37% reducing their store counts. This number has dropped to 12% of total retailers in 2019. According to the research, the two primary characteristics of chains closing the most stores has been too much debt and rapid overexpansion driven by historically low interest rates for the last 10 years. Lack of innovation and short-sighted private equity has also played a significant role in many of the chains. Retailers without these characteristics have continued to thrive in this market, noting that when a retailer closes a lot of stores, it is more of an indictment on the individual retailer rather than an overall retail industry problem as has often been reported. IHL notes in Retail Renaissance – True Store of Store Openings/Closings that it is normal and healthy for chains to be both opening new stores and closing non-performing stores. It is the net change overall (along with other measures) that reveals the health of the company and the industry. Seven of the nine segments have a net increase in stores for 2019. Only two industries, apparel and department stores, show a net decline in stores among all the retailers in the segment. The research report is available immediately for no cost. A webinar is scheduled to discuss the research findings for 2pm EDT, Wednesday, August 14. The detailed list of retailers and specific openings and closings is also available for a charge here.