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Are Store Closing Announcements a Sign of Health?

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It might not seem that way to landlords, but some industry executives say that store closing announcements by major retailers may actually spell good news for the health of the retail sector.

According to Michael Wiener, CEO of Excess Space Retail Services, during the depth of the recession many publicly traded chains were hesitant to announce they were closing stores because they feared Wall Street's reaction. Now that those same chains are starting to slowly expand again, they feel more comfortable putting out store closing announcements. And the industry should get ready to see more of those in the coming months.

"I think that is a sign of things actually starting to become normal again," Wiener says. "Stores open, stores close. When stores close [mainly] through bankruptcy or liquidation, those are recessionary times."

This view may seem counterintuitive, but it's in keeping with the trend of retailers optimizing their store portfolios to ultimately become healthier companies. What do the rest of you think about an increase in store closing announcements?

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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