Another store closes, and retail continues to change

April 17, 2017
Jim McNutt/Observer-Reporter Exterior of the Observer-Reporter building in Washington.

It was announced over the weekend rue21, a Cranberry-based retailer that sells clothing for teens, is closing about one-third of its stores across the country, including the store at Tanger Outlets in South Strabane Township.

You’ll be forgiven if you feel a sense of deja vu.

The chain is just the latest to announce it is closing up some of its brick-and-mortar stores and putting its energy and resources into its online arm. Earlier this year, Macy’s announced it was shuttering many of its department stores, including the one at Washington Crown Center. Gander Mountain, the sporting goods retailer, followed suit shortly thereafter, as did the mall’s Payless Shoe Source store.

And it could get worse, both for Crown Center and other shopping centers, because of the declining fortunes of Sears and Kmart. The two venerable department stores, which share a corporate parent after merging in the 2000s, appear to be teetering on the brink of extinction. Sears Holdings said last month it has not turned a profit since 2010, and it sustained more than $2 billion in losses last year. In its annual report, Sears Holdings said “our historical operating results indicate substantial doubt exists related to the company’s ability to continue as a going concern.”

In other words, the way things are going, the plug is likely going to be pulled.

It may be too soon to suggest that brick-and-mortar retailers are on a fast track to an apocalypse that will cashier every mall and department store. Many consumers still want to try on shoes or slacks before they make a purchase, or grip a shovel before they hand over a credit card. Buying something at a brick-and-mortar store does provide immediate satisfaction and, let’s face it, window-shopping in a mall, or even walking around in a downtown that is populated with businesses, is a social and recreational activity for no small share of people. In the last quarter of 2016, which includes the busy Christmas shopping season, online transactions accounted for just a little more than 8 percent of all sales. Habits that have been forged over decades aren’t going to entirely evaporate overnight.

Still, it’s hard to avoid the feeling that change is in the air. The steep discounts and the bottomless selection of the online universe could well wreak even more Godzilla-style havoc on the retail landscape. Even as going to a mall gives you an excuse to get out of the house, you mostly don’t have to worry about whether the item you want is out of stock when you shop online. You also don’t have to get out of your pajamas.

A story in The New York Times Sunday pointed out how so-called “zombie malls” are “increasingly dotting the suburban landscape. The lights are on, the escalators keep moving, but their purpose in life has gone.”

A plus for investors in online enterprises is they employ fewer people than brick-and-mortar retail stores, plus there are not costs associated with leases or utility bills. The minus, however, is the people who were once employed by Macy’s, or Payless Shoe Source, or other once-towering retail giants, are left without jobs, and with a shrinking number of other retail outlets they can turn to for employment.

Another question: What do you do with big-box stores and once-vibrant malls when they’re empty but still standing? How do you keep them from dragging down the community and businesses that surround them?

These are urgent questions that policymakers and business leaders will almost certainly have to confront in the years ahead.



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