News Series Examines Trends from Analyzing 1,195 Stores Slated for Closure by Sears, Macy's and JC Penney
Sears Discloses for First Time it May Not Survive, Marks Latest Blow to Dept. Store/Mall SectorPart: 2:
In this two-part news report by Senior Editor Mark Heschmeyer, CoStar analyzed the stores being closed by the three major department store chains, Sears, Macy's and JC Penney.
Over the last three years, the three chains combined have closed 1,195 locations in 860 cities. Among the hardest hit cities were: Jacksonville, FL, and Louisville, KY, each with seven closures; Philadelphia and Pittsburgh each have seen six; and Chicago, West Palm Beach and El Paso, TX, have each had five.
Sears shows the most closures: 828, (with more than half those being Kmart stores). JCPenney has closed or announced plans to close 236 stores. Among those are 138 it identified for closure late last week. Macy’s has closed or plans to close 131, including 68 of 100 planned closures it announced two months ago.
Six malls have the unfortunate distinction of having all three of the above retailers as anchors that have either been closed or announced that they will be closing:
- Vallco Shopping Mall, Cupertino, CA;
- The Boulevard Mall, Las Vegas, NV;
- The Mall at Cortana, Baton Rouge, LA;
- Upper Valley Mall, Springfield, OH;
- Gallery at Military Circle, Norfolk, VA; and
- Gulf View Square, Port Richey, FL.
While none of the department stores disclosed the specific criteria they use to decide which stores to close and which to keep open, CoStar research has developed a proprietary Location Quality Score (LQS) to evaluate more than 1.5 million retail properties in the CoStar database.
Using multiple variables, including trade area incomes, retail density and market competition to approximate the productivity of a given retail property, the CoStar Location Quality Score can provide insight as to whether the store closure is warranted by a location in a poor trade area, or whether it is in a good trade area but just too close to another of the retailer's stores, in which case the location could support a different retail user.