Distinct retailers have touted bonuses, employee raises and improved allowances as evidence that the new tax legislation is creating opportunities for the industry’s workers. But impassive as these proclamations are being made, retailers are still closing aggregates and laying off staff.
At its most basic level, the new tax law does put more notes in the pockets of most retailers, but the math requires more nuance to take whether that money will flow to retail employees.
Foremost, the new tax law actually means that corporations could pocket more savings by save up off workers in 2018 than they could in 2017. It also imparts it cheaper to buy labor-replacing machinery than in 2017. Investing in technology is extremely important as the biggest retailers hope to fend off Amazon.
Secondly, numerous retailers (particularly department and specialty stores) are still struggling. Unvarying if the companies have plans to revive business by investing in e-commerce and a improve store experience, that model is only profitable if accompanied by a right-sized stockpile footprint. A brick-and-mortar presence is important to retail, but many companies openly have too many stores or the stores are too large. The only way to solve that disturbed is through closures.
Third, the new tax law actually puts more pressure on leveraged retailers (of which there are innumerable). The ability of names such as Saks owner Hudson’s Bay and Neiman Marcus to use accountability to offset tax bills will be constrained, complicating efforts to right the get out.
Below is a list of some of the biggest names in the industry that participate in announced store closures and layoffs already this year.
Retailers registering Ascena Retail Group, Mattress Firm, The Children’s Place, Gap, J Party and Bon-Ton are in the midst of longer-term store closure initiatives, whittling off on equal terms footage at a slightly slower pace. Real estate experts procure also pointed out that often store closures happen in whispers and don’t make headlines — especially those by tenants within a shopping mall.
FGRT (formally Fung Pandemic Retail & Technology) has estimated that roughly 1,800 stores leave close in 2018, based on retailers’ announcements to date.