Several stores have announced closures coming from now until the end of the year, and shoppers may have to adjust their expectations for their favorite fashion apparel brands.
Why It Matters
Many consumers have reined in their spending, and even top retailers have had to close underperforming stores or even file for bankruptcy.
The store closures may reflect the larger retail industry as acquisitions and bankruptcies continue to shape business profits.
What To Know
American Signature
Value City Furniture’s parent company, American Signature, filed for bankruptcy this month. The business has 1,000 creditors, over $100 million in assets, and over $500 million in liabilities. Already, American Signature has announced a spree of closures headed shoppers’ way.
While most stores and the brand’s website will stay open for now, four stores in Tennessee are closing and offering up to 20 to 40 percent off.
The company will also be closing units or offering blowout sales in several other states, including several locations in Georgia, Indiana and Michigan.
Carter’s
Carter’s, which sells American baby clothes, said it will be closing over 100 stores as part of its “ongoing transformation efforts.”
This includes 150 stores across North America over the next three years. There will also be around 300 office-based positions cut by the end of the year.
For the three months ending September 27, Carter’s reported just $757.8 million in net sales. That was a drop from the $758.5 million earned in the third quarter of last year.
“While we are steadying our business in 2025, there’s still meaningful work to do for Carter’s to unlock its full potential in terms of exceeding both consumer and shareholder expectations,” CEO and President Douglas C. Palladini said in a statement.
H&M
H&M is closing two stores by January 2026 in New York City as part of its larger effort to shut down 200 units during 2025.
Based on the company’s filing with the New York Department of Labor, 62 employees will be laid off, with 31 at these Manhattan locations:
- 18 Church St., New York, New York
- 150 East 86th St., New York, New York
The deadline for the closures to occur is January 19.
“While physical stores will always remain important to us and something we continue to invest in, having the right stores in the right locations is vital to ensure our long-term and sustainable growth,” H&M said previously in a statement. “We are following our normal procedure of working with any affected store employees to place them in any available roles in neighboring stores.”
Foot Locker
While it is unclear when Foot Locker will start closing underperforming stores, its parent company, Dick’s Sporting Goods, announced the closures were imminent after acquiring the brand in September as part of a $2.4 billion deal.
Foot Locker’s fourth-quarter gross margin is anticipated to drop by 1,000 to 1,500 basis points, so Dick’s has begun the process of getting rid of unproductive assets and cleaning up its inventory.
“We need to clean out the garage,” Dick’s executive chairman Ed Stack said during Tuesday’s earnings call. “This means clearing out unproductive inventory, closing underperforming stores, and right-sizing assets that don’t align with our go-forward vision for the Foot Locker business.”
What People Are Saying
Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: “Whether it’s bankruptcy protection, a push toward profitability, or simply poor management, these store closures reflect a business cycle driven by slowing demand, economic malaise, and rising input costs. The retail industry is undergoing structural changes as higher costs and weaker consumer spending pressure margins. But, like all cycles, this one will eventually pass.”
What Happens Next
As competition remains fierce, more companies are likely to shut down stores or go bankrupt entirely, experts say, and this could affect prices for consumers in the long run.
“The real question is what happens to competition if too many stores close or go bankrupt. When supply is concentrated in the hands of a few large players–often backed by private equity–prices tend to rise,” Thompson said.
“Consumers should expect to see new entrants attempt to fill the gaps left behind, but the balance between competition and consolidation will determine what the retail landscape looks like going forward.”
