More than 7,400 store closures announced this year in US

Retailers vacated US shopping centres at the fastest pace in at least nine years in the second quarter as the relentless rise of online shopping and collapse of debt-laden chains begin to hit the commercial property market. More than 7,400 store closures have been announced this year, with Sears, Victoria’s Secret and Charlotte Russe among a raft of household names to shut outlets in malls across the country. Robust consumer spending has supported better-performing chains, while landlords have found alternative uses for some vacant shopping centre sites, from storage spaces to hotels… The red flag from the property market comes as investors worry anew about the outlook for some of the country’s biggest bricks and mortar retailers. Concerns over mall stalwart JC Penney’s near-$4 billion debt burden sent its shares down 17 per cent on Friday. The 117-year-old department store chain said it was taking external advice on how to strengthen its balance sheet… Out-of-favour properties risk being caught in a downward spiral, since lease terms allow some retailers to vacate early or require rents to be cut when anchor tenants leave. 

Alistair Gray