One thing we have noted recently is that there are many major retailers out there that have made some big announcements regarding their future. We have heard about the plans from Forever 21 who have already filed for bankruptcy and closed their retail stores. However, a new report revealed that they are focusing on e-commerce from now on. Another big retailer has now revealed its plans to shutter its retail stores in order to “save money”.
Now, we know that maintaining a retail store when the profit is low is not an ideal situation to be in. Earlier, the footfall in those retail stores was huge and the returns were also there. Also, people were not into e-commerce that much even though Amazon was around so it made sense. But now that retailers can save money on e-commerce, this also makes sense.
Express, one of the biggest clothing retailer, now a CNBC report reveals that it will close up to 100 of its retail stores by 2022. And one of the biggest reasons given by them is cost-cutting which also tells you that the profits were not great. Since the retail stores, also known as Express stores, will be closed down so we should also expect job cuts and layoffs. However, the company did not mention how many job cuts will be done for obvious reasons.
While you might think that this could be taken as a bad decision by Express’ board and its stockholders, it was actually the reverse. Because ever since Express announced its decision, its shares have gone up by up to 18% after the news.
This clearly shows that even shareholders now want retailers to jump on the e-commerce bandwagon which gives them more returns on their investment. Express says that they plan to shut down 100 retail stores by 2022 and save $80 million in costs annually whereas 9 of those 100 have already been shuttered.