It’s no secret that retailers have been pummeled by the COVID-19 pandemic. Mandated lockdowns and social distancing rules have damaged many retailers’ supply chains, and the growth of e-commerce threatens the long-term future of brick-and-mortar retail.

Global accounting firm BDO USA has issued a new report on retail bankruptcies and store closures through the first half of 2020 and on into mid-August. In the first six months of this year, 18 retailers filed for bankruptcy protection, and in the first half of the third quarter, another 11 also had filed.

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About a third of the 29 retailer bankruptcies (10) so far in 2020 have fallen on apparel and footwear retailers. The following chart from BDO shows the number of filings and store closings among retailers filing for Chapter 11 protection. At the current pace, retail bankruptcies could surpass the total of 48 filed following the Great Recession.

In addition to the nearly 6,000 stores closed by these firms, 18 firms that have not filed for bankruptcy have closed more than 4,000 stores so far this year. The following chart lists the firms that had announced the closure of at least 50 stores in the first half of 2020. One of these, Microsoft, has seen its share price rise by a third in 2020, although that’s well off its 48% gain as of early September.

The total number of store closures to date this year already surpasses the record 9,500 stores that closed in 2019. BDO notes that the majority of the closures have taken place in shopping malls. Last week, mall operator Brookfield Property acknowledged that it was cutting 20% of its retail staff division.

While retailing is a cyclical business, the spikes that normally occur in the fall (back-to-school) and winter (Christmas) are no sure thing this year. Apparel retailers may suffer the most because consumer spending has tended to focus on electronic gear to support distance learning and not new clothes to wear for school.

In the longer run, e-commerce gains may not be recoverable. BDO cites a projection from research firm eMarketer for a 14% drop in brick-and-mortar retail sales this year and an overall sales decline of 10.5%. The declines are only partially offset by an 18% in e-commerce sales.

BDO expects 2020 to set a new record for retail bankruptcies and store closures. Retailers that are “highly levered and mall-based” are particularly endangered.

Here’s BDO’s list of all retail bankruptcies filed through mid-August.

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