WASHINGTON — The U.S. economy is tanking faster than one can say “Donald Trump.” The U.S. Commerce Department says it shrank by 9.5% between April and June. Some of the most recognizable chain stores that have existed for decades are closing, according to Business Insider. Tens of millions of jobs are being erased faster than one can say “Great Depression.”
Government economists report the drop in the gross domestic product, the primary measurement of our nation’s economy, would shrink by nearly one-third if it continues for an entire year.
Macy’s said it will close 125 of its stores over the next three years, jettisoning thousands of jobs. New York City would become its sole corporate headquarters.
Nordstrom announced it would shut down three more of its designer apparel stores, on top of another 16 of its full department stores.
Bed, Bath and Beyond will close “dozens of stores” in at least eight states, including three designer stores, plus 16 full-line department stores. Last year, Sears said it would close at least 96 of its stores, including 45 K-Marts.
Elsewhere, Starbucks announced in June that it was closing company-owned stores in the U.S. and Canada over the next 18 months.
Dunkin’ Donuts also announced that it was going to permanently close 450 of its locations by the end of the year. However, many of those closures were located in Speedway gas stations (mainly on the East Coast), which partnered with Hess until it was acquired by Speedway in 2014.
In many cases, as with Nordstrom, the closings were due to factors such as putting stores in “sub-optimal locations,” according to Neil Saunders, managing director of GlobalData Retail.
Elsewhere, other factors led to store closings. Macy’s, for example, had located in monster shopping malls that put it in fierce competition with too many stores selling similar merchandise.
But in the final analysis, the dozens of stores on the closure list were triggered in large part by the deadly coronavirus pandemic that has plunged the economy into much of its troubles, with plummeting sales and increasing debt by retailers.
And there is no quicker way to put oneself in the path of the virus than in crowded malls and shops where infected people — many of whom aren’t wearing masks — are sneezing, coughing and spreading the deadly disease.
Two other retail giants have also filed for Chapter 11 protection as the pandemic has kept shoppers away for many months and sales have plummeted.
Lord and Taylor, one of the nation’s oldest department store chains (founded in New York in 1826), was looking for a buyer. It sold its flagship store on New York’s Fifth Avenue in 2019, and recently began liquidating its remaining inventories and stores. Business Insider pegged Lord and Taylor’s existing debt at $138 million.
And Tailored Brands, owner of Men’s Wearhouse and Joseph A. Banks stores, filed for Chapter 11 bankruptcy this week, reporting that it had more than $2.8 billion in debt and around $2.4 billion in assets. Up to 500 of its stores are now slated for closure.
Additional retailers like J. Crew, Neiman Marcus, Brooks Brothers and J.C. Penney had all previously filed for bankruptcy protections and shuttered numerous stores.
Many economic analysts now expect additional bankruptcy filings and store closures in the coming weeks, unemployment to go through the roof and the overall U.S. economy to go into a nosedive.
As the COVID-19 pandemic continues toward the 2020 presidential election this fall, President Trump has a lot of explaining to do.
Donald Lambro has been covering Washington politics for more than 50 years as a reporter, editor and commentator.