Hard times for retailers – JCPenney, Sears and Bebe are closing their stores

It is a pretty tough time to be in retail. After the bad news for JCPenney and Sears, another retailer Bebe Stores Inc announced the end of its long-time reign.

Bebe – the newest victim

Bebe said on Friday the company is going to close all its stores by the end of May. It happened the month after declaring “it was exploring strategic alternatives following four years of losses,” CNNMoney reported.

Bebe Stores, which models itself as a purveyor of “unique, sophisticated and timelessly sexy” clothing for women, also plans to liquidate all merchandise and fixtures within the stores.

Bebe did not immediately return messages from CNNMoney asking whether it plans to go out of business or transition to online only.

Bloomberg has also reported last month that Bebe is going to shut its stores and seek a transform their services as an online retailer to avoid filing for bankruptcy.

Bebe said in an SEC that it was exploring strategic alternatives. Before that announcement, The Brisbane, California-based retailer, known for its form-fitting dresses and other apparel, had 180 stores in the United States and Canada. Now, the company has a plan to close 28 stores. It will also shut down two distribution centres and is trying to figure out what to do with the rest of their branches.

The company will also pay advisors B. Riley & Co and Tiger Capital Group LLC $550,000 and 15 percent of the gross proceeds from the sale of store fixtures.

Traditional retailers are losing the battle

Bebe is not the only traditional retailer that has faced hard times. A number of other companies have gone bankrupt in the last couple of years, including Aeropostale, The Limited and clothes fashion retailers such as H&M, Zara, due to their weak competition with Amazon.com Inc.

Luxury retailer Neiman Marcus said earlier this month that it might sell itself, after necessity to change its plans for an IPO in January amid sorry sales. Macy’s, JCPenney and Sears once ruled the shopping malls, but now they are cutting thousands of jobs.

  1. C. Penney Company, Inc., an American department store chain with 1,014 locations in 49 U.S. states and Puerto Rico, plans to shutter as many as 140 stores. The closings should take place by the end of June. JCPenney had 105,000 employees manning 1,021 stores as of a year ago.

JCPenney will take a $225 million hit to its earnings from the cost of closing the stores. But it expects to save $200 million a year in payroll and other costs. It said the stores to be closed had weaker sales or would have needed expensive upgrades.

Sears Holdings, which includes the Sears and Kmart brands, announced plans to close 150 stores last month, and Macy’s is closing 68 stores and cutting 10,000 jobs.

The Limited closed its remaining stores last month, and American Apparel, which filed for bankruptcy for a second time last year, is expected to close all its stores. Sports Authority went out of business following a bankruptcy filing last year.

By contrast, Amazon expects to hire 100,000 workers from U.S. this year and is willing to continue their expansion. Only in Baltimore Amazon’s new warehouse employed 3,000 people full-time in January.

With announcing that, the company also introduced automation (robots that will work in Amazon’s warehouses) that could one day cost jobs. However, they say that technologies work in conjunction with people instead of replacing them.

So, while new industries are creating their own path of working, the old ones are struggling and slowly dying. But it is not the first time when new player shake the market and take all the praise by themselves. It is a good news for customers because it always brings a new type of service and more convenient options.

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