Thousands of brick-and-mortar stores are set to close this year, but others will open, just not where you might expect, analysts say.
“There are always winners,” said Jan Kniffen, chief executive officer of J. Rogers Kniffen World Wide Enterprises, a retail consulting firm. But, he said, those winners won’t be found in the mall.
“If it’s not local, off-price or online, it’s losing market share,” Kniffen told CNBC on “Power Lunch” on Thursday.
According to Coresight Research, approximately 2,220 brick-and-mortar stores will close in 2018. But Kniffen estimates that the number is closer to somewhere between 10,000 and 12,000. Still, he said, around 6,500 stores will open in their place.
Gap, Ulta, Target, Dick’s Sporting Goods, Dollar General, Ross and Aldi have all announced plans to open new locations this year. Gap said it plans to close some 200 stores by 2020, but will open about 270 under the Athleta and Old Navy banners by 2020.
“The common denominator there is they’re the biggest stores,” Simeon Siegel, executive director and senior equity analyst of apparel, broadlines and specialty retail at Nomura Securities, said on “Power Lunch.”
“If you think about who’s actually opening, it’s these incredibly large stores, it’s these stores that are off-mall, and it’s the ones that are focusing on value,” Siegel said.
“What Amazon has taught us is that convenience belongs to the consumer,” Siegel said. “Power belongs to the consumer. If there are any of those companies at the strip center around the block, the consumer is still empowered to walk in. The consumer would rather be in store, in an aisle, holding something. If you could be magically transported, that’s where you’d want to be.”
“The malls, which are generally further away from people, are harder to do that,” he said.