Is This the End of Department Stores in Canada?
With the huge increase in online buying, both department stores and malls are in a lot of trouble. According to CNN, malls in the United States are failing, and since Canada tends to follow U.S. trends, we will not be spared. We’ve already seen major store closings this year, starting with the bankruptcy of Sears. Rumors abound about which store will close next. “As one big store closes, it can take several smaller stores along with it like a house of cards. Experts predict that a quarter of American malls will close in five years — around 300 out of 1,100,” CNN reported.
The record pace of bankruptcies in the industry this year is becoming more a question as to when the company will file, not if they will. When a so-called anchor store defaults and leaves a mall, other stores follow by breaking their leases.
So, who is next? According to CNBC, retailers such as J. Crew and True Religion Apparel are considered to have a large risk of default within the next 12 months, with J. Crew expecting to close a significant number of stores. Money expert, Clark Howard, is warning the public not to buy gift cards, as they will be worthless if a store or restaurant closes unexpectedly. Gift cards are popular as they are easy to buy and use, but in the current economy, it’s not worth taking the chance.
People love the convenience of malls because of the ability to buy from a variety of stores at the same place, but the current collapse is a bad sign for consumers. As major retail stores are affected, we worry about the future of department stores in general.
What is do you think the future will hold for department stores?
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