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retail watch | Jan 23, 2025 |
2025 starts with a wave of store closures

The new year has begun with a wave of store closings, particularly for the home furnishings segment, but also for the retailing business in general.

More than 1,000 individual home stores—probably more once the final counts are totaled—have closed since the last two months of 2024. These include locations for Big Lots, LL Flooring, Conn’s, Badcock Home Furniture & More, American Freight, Joann and The Container Store (both still pending), and Party City, which did have home goods among its product mix.

And this doesn’t include the general merchandise and specialty retailers like the dollar stores, drug store chains and deep discounters that sell home products. Retail research and advisory firm Coresight calculated more than 7,300 store closures overall—a 69 percent increase compared to the same period the year before.

Even if some of these closures are still in process and not quite confirmed, it’s been a particularly ugly kickoff for 2025, and last year wasn’t a whole lot better. Several years of lackluster business, higher interest rates making borrowing prohibitive, and the failure of the housing market to rebound with stubbornly high mortgage rates have caused a general weakness in consumer purchases for their homes.

But the worst could be over. At least that’s what Telsey Advisory Group, the research, brokerage and financial consulting company, is saying in its latest report. “For 2025, collectively, we look for 1.7 percent year-over-year growth in net store openings, led by off-price (up 3.6 percent YOY), home (up 3.2 percent YOY), and discounters (up 2.6 percent YOY).”

TAG saw the growth in these sectors balanced by more closings in luxury (down 0.4 percent), department stores (down 1.5 percent), and sporting goods (down 0.3 percent). In home specifically, TAG predicted: “The sector as a whole [will] see positive net store openings in 2024 and 2025 as the market potentially completes its way through a bottoming cycle.” It singled out RH, Arhaus, Floor & Decor, and Havertys as publicly traded retailers that should see gains in store counts this year. It did caution that Williams-Sonoma, as part of its ongoing efforts to cut the size of its fleet, could be an outlier “but should turn to slight net openings in 2025 as the optimization process makes progress.”

These positive forecasts are encouraging even as the grim news of closings and bankruptcies drone on into the new year. Conn’s, Badcock, American Freight and Party City are entirely gone from the retail scene, while Big Lots could end up losing 85 percent of its once-1,400-strong fleet, and LL Flooring (reverting back to its original Lumber Liquidators name) will be half the size of its pre-bankruptcy 400 locations. Joann (850 stores) and The Container Store (102 stores) are both in bankruptcy proceedings, and may emerge—but the odds are that even if they do, they will be much smaller than previously.

Still, many analysts are reasonably optimistic about the prospects for the retailing business. “It's not, in my opinion, a resumption of the retail apocalypse that we saw in 2018, 2019, 2020, where we were seeing so many stores closed,” Brandon Svec, national director of U.S. retail analytics for CoStar Group, told Newsweek recently. “There are still a substantial amount of tenants from a broad range of sectors looking for space. And the longer-term imbalance between the space needed in retail and the space that we have, I don’t think has shifted.”

So, yes, the closings may have peaked. But it was one big climb while it lasted.

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Warren Shoulberg is the former editor in chief for several leading B2B publications. He has been a guest lecturer at the Columbia University Graduate School of Business; received honors from the International Furnishings and Design Association and the Fashion Institute of Technology; and been cited by The Wall Street Journal, The New York Times, The Washington Post, CNN and other media as a leading industry expert. His Retail Watch columns offer deep industry insights on major markets and product categories.

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