This holiday is over, for retailers. The tally of sales is grim for brick and mortar. Holiday spending rose 3%, but it was driven by a 49% rise in e-commerce. For another year, foot traffic fell. 2020 was simply worse than others, due in large part to the COVID-19 pandemic. There were several huge retailer bankruptcies. Among them, the one that shuttered the most locations closed 1,000 stores.
As MasterCard SpendingPulse reported the 3% rise, its researchers pointed out that the figure was at the low end of most forecasts. And, the mix of consumer shopping patterns changed considerably. Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated, said “American consumers turned the holiday season on its head, redefining ‘home for the holidays’ in a uniquely 2020 way. They shopped from home for the home, leading to record e-commerce growth.”
Accounting firm BDO keeps track of retailer bankruptcies. It pointed out in its report on which retailers have gone under in 2020 that the pandemic, in particular, has accelerated the process of destroying physical stores. It is a process e-commerce began a decade ago.
Some of America’s most famous retailers filed for bankruptcy this year. These included Pier 1, J.Crew, Nieman Marcus, J.C. Penney, GNC, and Brooks Brothers. Among them, they closed hundreds of stores. The retailer that has closed the most locations this year, a total of 1,000, is Ascena Retail Group.
Ascena Retail Group is publicly traded. Its bankruptcy wiped out investors. The stock traded as high as $8.50 this year. That has dropped to $.08. The brands the company owned are Ann Taylor, Cacique, Catherines, Lane Bryant, Lou & Grey, LOFT, and Justice. It filed Chapter 11 on July 23.
As part of its reorganization, Ascena Retail Group closes all of its retail operations in Mexico, Puerto Rico, and Canada. Private-equity firm Sycamore Partners bought several of the brands, which included Ann Taylor, Lane Bryant, Loft, and Lou & Grey. The transaction is what triggers most of the store shuttering.
Regardless of the owners, the Ascena Retail Group brands are not out of financial danger. The march toward an e-commerce future will likely continue to accelerate into next year. The spread of the pandemic has worsened. And, the consumer has gotten used to a level of convenience a trip to a store cannot match.
Are You Still Paying With a Debit Card?
The average American spends $17,274 on debit cards a year, and it’s a HUGE mistake. First, debit cards don’t have the same fraud protections as credit cards. Once your money is gone, it’s gone. But more importantly you can actually get something back from this spending every time you swipe.
Issuers are handing out wild bonuses right now. With some you can earn up to 5% back on every purchase. That’s like getting a 5% discount on everything you buy!
Our top pick is kind of hard to imagine. Not only does it pay up to 5% back, it also includes a $200 cash back reward in the first six months, a 0% intro APR, and…. $0 annual fee. It’s quite literally free money for any one that uses a card regularly. Click here to learn more!
Flywheel Publishing has partnered with CardRatings to provide coverage of credit card products. Flywheel Publishing and CardRatings may receive a commission from card issuers.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.