Major retail chains have resorted to closing store locations this year in out-of-court restructurings as well as Chapter 11 filings to eliminate underperforming units and to cut costs and expenses. In some cases, retailers have needed to close and liquidate all of their stores in Chapter 7 bankruptcy filings after they exhausted all options to try to save the business.
Retail theft and crime have also become major factors in retailers' decisions to shut down stores, as well. Target (TGT) has been a victim of theft in the last year, as theft and organized retail crime led the retail chain to close down nine stores in four states in October 2023, which were located in the Seattle, New York, San Francisco/Oakland, and Portland metropolitan areas.
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Huge drugstore chain CVS (CVS) in 2021 said that it would close 900 of its nearly 9,900 stores to reduce costs and cut losses, closing 300 locations each year in 2022, 2023 and 2024.
The company said it would consider several factors before closing a store, such as maintaining access to pharmacy services, local market dynamics, population shifts, a community’s store density, and ensuring there are other geographic access points to meet the needs of the community.
Related: Rite Aid’s bankruptcy explained: Causes & timeline
CVS competitor Walgreens in June 2023 said it would close up to 450 stores across the U.S. and U.K. to simplify its business. About a year later, the Walgreens Boots Alliance (WBA) retail chain's CEO Tim Wentworth on June 27 told analysts on a call that the company would close a significant number of its estimated 8,600 stores, CNN reported.
The company, which said about 25% of its stores are not profitable, asserted it would close certain stores that might be located too close to another store or stores that have a high rate of shrinkage from theft.
More bankruptcy:
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- Struggling clothing brand files Chapter 11 bankruptcy
Discount retail chain 99 Cents Only, which operated 371 stores in Arizona, California, Nevada, and Texas, on April 8 filed for Chapter 11 bankruptcy with plans to liquidate and shut down all of its stores three days after it revealed that it had hired Hilco Global to liquidate all merchandise, furniture, fixtures and equipment at the company's stores. Affiliate Hilco Real Estate managed the sale of the company's real estate assets.
Rite Aid closes another 30 locations in bankruptcy
Nationwide drugstore chain Rite Aid, which filed for Chapter 11 bankruptcy on Oct. 15, 2023, has been closing hundreds of stores since it filed a motion the day after its petition filing, seeking to conduct store closing sales at 154 locations.
As the debtor seeks approval of a confirmation order for its bankruptcy plan, Rite Aid on June 27 filed a notice of additional store closings to shut down 30 locations, consisting of 16 stores in Ohio and another 14 in Michigan. It had previously on June 21 filed a notice to close 22 stores, consisting of 12 in Michigan, eight in Ohio, and one each in Maryland and Washington. On June 17, it filed a notice to close 27 stores, consisting of 16 in Ohio and 11 in Michigan. The retail chain also filed four other notices in June seeking to close six additional locations.
Of the 85 locations for which Rite Aid filed notices for store closing in June, 44 stores were in Ohio, 38 were in Michigan and the remaining three were in California, Maryland and Washington. The retailer's June closings increased the total of Rite Aid's closed stores to 434
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