Retail recession drives torrent of store closures

The retail recession afflicting Australia has been well documented.

Retail sales volumes registered their first annual decline since the early-1990s recession in the September quarter:

Whereas household consumption spending growth slowed to just 1.2% in the year to September – the lowest level since the Global Financial Crisis:

Now the retail closures are piling up, with Harris Scarfe this week announcing 21 store closures across five states after recently being placed in receivership:

Twenty one Harris Scarfe stores across five states will close over the next four weeks after the retailer was placed in receivership in December.

The administrators say 44 stores will continue to trade with the group offered for sale…

The stores to close are in Western Australia, Queensland, NSW, Victoria and South Australia and include the flagship Rundle Mall store in Adelaide.

Fashion retailer Bardot also announced the closure of 58 stores, with 530 staff to lose jobs:

Women’s fashion retailer Bardot will shut the vast majority of its stores over the next two months, with 530 workers to lose their jobs

Bardot will drastically shrink its store network by shutting 58 stores. Only 14 stores will remain open, confined to New South Wales and Victoria.

Fifty-six stores are scheduled to close by March. Two stores — in Hobart and Knox, Victoria — already shut in early December.

The fashion chain entered administration in November, one of a slew of retailers to do so last year as conditions in the sector deteriorated.

Whereas gaming retailer EB Games has announced the closure of 19 stores with more in trouble:

EB Games, Australia’s largest game chain store, is closing several locations around Australia. In a statement given to Kotaku Australia, the retailer has said that 19 unprofitable stores around the country are closing; however, 20 stores have disappeared from their online store locator…

EB Games is the Australian subsidiary of major US retailer Gamestop. Their parent company has fallen on hard times itself, and had to layoff over 100 employees in 2019, but there’s a plan in place to turn things around.

Expect many more bricks-and-mortar retail closures in 2020 as consumer weakness converges with the shift to online and digital purchases.

Unconventional Economist
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