April 29, 2016—Department stores need to close hundreds of locations if they want to regain the productivity they had a decade ago, according to new research from Green Street Advisors. The real-estate research firm estimates that the closures could include roughly 800 department stores or about a fifth of all anchor space in U.S. malls.
Sears Holdings Corp. alone would need to close 300, or 43 percent, of its Sears stores to regain the sales per square foot it had in 2006, adjusted for inflation, according to Green Street.
“Department stores used to be a great catchall for different brands, but today, many of the brands have stores of their own and shoppers can also find them online,” said DJ Busch, a senior Green Street analyst.
Sears and other retailers, including Macy’s Inc. and J.C. Penney Co., have closed hundreds of stores in recent years as business has shifted to discounters or online merchants like Amazon.com Inc. But the closures haven’t been enough to offset a drop in sales, Green Street said.
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