Retailers That Will Dominate Store Closings

Sears

Sears (SHLD) owns K-Mart and Sears stores. In December, K-Mart reported relatively flat sales, but same-store sales for Sears were off almost 13%. If Sears wants to have positive earnings, it can't carry that kind of baggage. The company has nearly 4,000 full-line and special item outlets. Sears has 337,000 employees worldwide. It is certainly possible that Sears would cut 200 or 300 locations which could mean the loss of 7,000 or more jobs.

Next: GAP & Old Navy

GAP & Old Navy

GAP (GPS) turned in stunningly poor holiday results. Same-store sales were off 14% for December. The company cut earnings forecasts. The firm's Old Navy brand was hit hard as it has been all year. Same-store sales at the unit were off 16%. Gap has 3,100 stores worldwide. Closing Old Navy is still a real option, especially if the retail environment gets worse. Old Navy accounts for a about a third of Gap's sales. If it is closed, 30,000 people could lose their jobs.

Next: Macy's

Macy's

Macy's (M) recently closed ten stores. For the November/December holiday season, same-store sales fell over 7%. Macy's still has more than 340 stores and more than 175,000 employees. The retailer will probably need to cut another ten to twenty stores if the first quarter is worse than the holidays.

Next: Nordstrom

Nordstrom

Nordstrom (JWN) had about as bad a December as any other large retailer. Same-store sales were down almost 11%. Nordstrom said it would not hit its earnings guidance. The firm has 166 stores and 55,000 workers. If same-store sales drop 15% this quarter, it is not hard imagining that twenty stores would close and 5,000 people could be laid off.

Next: Abercrombie & Fitch

Abercrombie & Fitch

Abercrombie & Fitch (ANF) same-store sales were off 24% in December. If the number begins to run above 30%, Wall St. has to ask if the company is even viable. ANF has 1,000 stores and an extended bad period would certainly mean 100 or more of those would be shuttered.

Next: Zale's

Zales Jewelers

Zales (ZLC) same-store sales dropped 22% in December. That drop was more extreme than November's which was 13%. Zales trades at $3 and has lost 90% of its market cap over the last year. The stock trades at a level where a number of investors believe it will go bankrupt. That would put more than 1,000 stores and over 15,000 jobs at risk.

Next: Tiffany's

Tiffany's

Tiffany's (TIF) is having a harder time than many retailers because sales of luxury goods tend to be hit hard in a deep recession. Fourth-quarter domestic same-store sales are expected to be down as much as 35%. International sales are also expected to drop. The company has 184 stores almost 9,000 people. Could Tiffany have to cut stores and personnel by 15%? Definitely.

Next: Signet Jewelers

Signet Jewelers

Signet Jewelers (SIG) had a same-store sales drop of almost 16% in the fourth quarter. Signet announced it would suspend its dividend to preserve cash. For the firm's fiscal quarter which ended November 1, revenue fell 7% to $629 million. Signet had a modest operating loss of $14 million. The firm's balance sheet is in relatively good shape. Signet has about 2,000 outlets operating under a variety of names. It has more than 17,000 employees. Right now, Signet might get by with a modest downsizing of 5% or 10%.

Next: Coach

Coach

Coach (COH) recently dropped its profit outlook and said same-store sales for December were down 13%. The rich are not getting richer. But, the market has not entirely turned away from the company. Shares trade at almost $18, down from a 52-week high of just over $37. That may seem awful, but the stock is not off as much as some others in the sector. Coach has over 500 stores and specialty outlets and 5,600 workers. Its finances are considered solid so it might get away with cutting 10% of its locations, or 50 outlets.
Next: Best Buy

Best Buy

Best Buy (BBY) is big enough and financially strong enough to be out of harm's way. Same-store sales for December dropped just over 6% and revenue ticked up a bit. With Circuit City in bankruptcy, Best Buy's only real competition is from Wal-Mart. Best Buy might be the only retailer of its size that does not cut anyone or close any stores.

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Pushed to the Brink

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