Business Shutdowns to Continue Through 2024

By Associated Press

Published 1 year ago on

June 6, 2024

The ongoing trend of business shutdowns is examined, amid major companies like Walmart, Dollar Tree, and Macy’s adapting to the changing retail landscape. (Wealth of Geeks)

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In March, The Body Shop announced it is closing all of their locations as they file for bankruptcy. A couple weeks ago, Red Lobster did likewise, shuttering nearly 100 of their 600 restaurants across the United States. The two companies join a spate of retail and dining businesses closing or scaling back in recent months.

Even Walmart doesn’t seem immune.

But none have experienced the roller coaster ride that Dollar Tree has been on over the last decade. While other bargain stores like Los Angeles’ 99 Cents Only are closing their doors permanently, Dollar Tree shareholders hope this won’t be the end of the ride.

Ultimately, store closures come down to profitability problems. With increased competition from online offerings and fewer people wanting to visit brick-and-mortar stores, retailers are struggling to justify keeping stores open. Closing stores that are taking a loss often increases the company’s net worth and fuels business shutdowns.

Some focus on online sales instead, as GAP did in 2020, while others readjust with feet in both camps.

Dollar Tree Closes 1000 Stores

At the start of 2013, Dollar Tree had almost 5,000 locations across the United States. Ten years later, after acquiring the troubled Family Dollar chain, that number rose to 16,774.

In March, Dollar Tree announced it would close 1,000 stores, starting with 600 in the first half of 2024. Along with the storefronts, the company will lose many employees who, in turn, will lose their salaries. Many of the closing stores were Family Dollars that just couldn’t compete. CEO Richard Dreiling calls them, “unprofitable locations,” effectively trimming the fat so that the brand will be in a better position going into the second half of 2024 and beyond.

Despite its share price being down 10% on last year, Dollar Tree isn’t going anywhere just now. Though many stores will close their doors for the last time this year, more than 15,000 locations remain open for business.

Foot Locker and Macy’s Announce Closures

Foot Locker recently announced its plan to close 400 stores between now and 2026. The footwear giant said closing these underperforming locations will allow investment in new concept stores outside the traditional mall environment.

The new style stores include “community,” “power store,” and “house of play” concepts. The plan, named “Lace Up,” includes opening 280 new stores in an effort to “focus on resetting the business,” CEO Mary Dillion said in a recent press release.

Macy’s will close 50 stores across the United States this year, with another 100 planned to close by 2026. “Underperforming locations” were cited as the cause. However, Macy’s also said the closures would allow for a focus on more “digital presence,” which is a part of new CEO Tony Springs’s vision, “A Bold New Chapter.”

Stores in San Leandro and Simi Valley, California, are among the first to close their doors, along with one in Tallahassee, Florida. After the closures, Macy’s will continue trading at its remaining 350 locations, as well as Bloomingdale’s and Bluemercury, two of its high-performing brands.

The Body Shop and Walmart Face Closures

Two months after announcing its closures in the United Kingdom, The Body Shop closed all its retail locations in the U.S. and many in Canada. The self-styled “natural and cruelty-free” cosmetic brand rose to fame during the 1990s in Britain after being founded by environmental activist Anita Roddick. It was bought by L’Oréal for close to $1 billion and again by Brazilian firm Natura, which recently sold it to Aurelius, an asset management group.

The reason for the downfall? COVID certainly played a part as The Body Shop focused on in-store purchases. Consumers also have more choice now than they did in the 1990s. There is more competition from online companies and easier access to higher-end brands, all factors that turned The Body Shop into a luxury fewer and fewer people wanted. The Bodyshop will continue trading online, but for how long will it continue? No one knows.

Yes, even Walmart recently closed some superstores. Six locations, including two in California, Walmart greeters, many of whom are paid by the hour, said hello and then goodbye to their last customers before managers locked the doors one final time. The other stores were in Maryland, Ohio, and Wisconsin; two were in San Diego.

Seven Walmart’s closing doesn’t signal a downfall, and “poor financial performance” was the reason for the closures. The company employs approximately 1.6 million people and won’t be going the way of The Body Shop anytime soon. The company recently announced it will create tens of thousands more jobs over the next year, remodeling 650 stores across 47 states. The first two open in Santa Rosa Beach, Florida, and Atlanta, Georgia.

Are Business Shutdowns Going to Continue?

No mass shutdowns are occurring nationally, and your favorite stores aren’t going anywhere. Don’t expect retail to die this year. This is business as usual. Walmart is closing a few stores but opening hundreds more. Dollar Tree is closing 1,000 locations but still has 15,000 open. Foot Locker is opening 280 new stores, and Macy’s is restructuring for a new chapter.

Unfortunately, The Body Shop did enter into liquidation, but there is nothing to indicate that more companies will follow suit. Companies that continue to adapt to changing times will continue to thrive.