Over 650 store closures in shocking six months for retail industry

More than 650 retail store closures have been announced since the beginning of the year, and more than 1,600 workers left without jobs – the latest as part of Myer’s announcement last week that it would shed 100 staff in order to stay competitive.

The figures represent what is becoming one of the worst years for retail in recent history, as businesses struggle against higher costs and competitive pressures, including the growing presence of online companies.

Since the beginning of the year, businesses including Fletcher Jones, GAME, WOW Sight and Sound, Dick Smith, Speciality Fashion Group have all announced plans to scale back their retail footprints dramatically.

And hundreds more employees are set to lose their jobs over the next few years as expansion plans are left unfulfilled.

But that isn’t all. Russell Zimmerman, executive director of the Australian Retailers Association, says he’s hearing from smaller retailers that stores are closing all the time.

“We talk to our members, and what we’re finding is that many businesses may say they had 15 stores last year, but they’ve shed that to just 12 or 13.”

“It’s definitely a worrying time, and I think there are plenty of reasons for it occurring.”

Fletcher Jones first announced 15 store closures and 61 job losses, and was quickly followed by many others. Billabong announced plans to shut 150 stores worldwide in the next two years, with 80 jobs to be lost in Australia, while Woolworths also announced 100 Dick Smith stores will close in the next two years.

Speciality Fashion Group also said it will gradually reduce its footprint by 120 stores over two years, while bedding retailer Sleep City confirmed 64 stores and 450 jobs would go after it collapsed.

Eyewear retailer Luxottica announced 100 store closures to come in the next two years.

Two major retailers have accounted for more than 1,000 staff losing their jobs. WOW Sight and Soundannounced 15 stores to close earlier this year, while videogame retailer GAME confirmed the last of its 92 stores would close early this month.

Myer just announced last week 100 jobs would go as it attempts to cut down on costs.

Together, this represents more than 650 store closures and at least 1,600 staff. That figure does not include the number of store closures which have been announced in advance. Dick Smith, Speciality Fashion and Luxottica have announced more than 300 stores will close over the next two years, which will cause hundreds of staff to be left without jobs.

None of this includes Darrell Lea, which was placed in voluntary administration last week with 700 jobs on the line in 69 company owned and franchised stores.

Zimmerman says the trend is worrying – especially after it comes during 2011 when two major chains, Angus and Robertson and Borders, collapsed leaving hundreds out of work.

“For many, it’s the costs involved in their tenancy agreements, and they’ve got deals they want to get out of. Others have pressures from online. The new awards are increasing costs. It’s an entire host of issues.”

Unfortunately, however, he says there isn’t much the group can do apart from speak with governments on behalf of the industry. Economic uncertainty from overseas adds to the confusion felt by small retailers and, ultimately, they’ll just have to find ways to tough it out.

“There’s not much we can do about confidence levels. We’re working with a number of state governments on tenancy legislation, trying to get a better deal – but it’s hard.”

“We’re just trying to put a positive spin on things as much as we can.”

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