By MICHAEL BARBARO Published: May 2, 2008
Home Depot, the nation’s largest home improvement chain, said on Thursday that it would abandon plans to open 50 new stores and would close 15 poorly performing locations. As part of the belt-tightening, the company will permanently scale back plans for expansion after 2008, when it will open new stores at the slowest rate in its 30-year history. Home Depot has been hit especially hard by the housing slowdown, but it is not alone in rethinking its expansion plans. Over the last six months, chains like Starbucks, Pacific Sunwear and Ann Taylor have vowed to close a combined 1,000 stores, which is expected to remake hundreds of shopping centers around the country.
So like customers, stores are slashing their budgets during the economic downturn. Foot Locker will close 140 stores over the next year, Ann Taylor will start to shutter 117, and the jeweler Zales will close 100.
Charming Shoppes, which owns the women’s clothing retailers Lane Bryant and Fashion Bug, is closing at least 150 stores. Wilsons the Leather Experts will close 158. Pacific Sunwear is shutting a 153-store chain called Demo.
Many retailers not shutting stores are scaling back plans for new ones. J. C. Penney, Kohl’s and Wal-Mart are slowing their expansion or delaying store openings. Penney’s said it would open 36 stores this year, not 50 as planned. Kohl’s, which had aimed to open 100 stores a year, will build just 75 in 2008.
David A. Schick, an analyst at Stifel Nicolaus, said investors were pleading with companies like Home Depot, Wal-Mart and Starbucks to focus on the stores they already have. “The ’80s and ’90s was growth, growth, growth,” he said. “But the stock market wants these stores to slow down.”
Summary: Everyone is doing badly right now!
By Duane D. Stanford, November 10, 2008
“Starbucks Corp., the world's largest chain of coffee shops, reported fourth-quarter profit that fell more than analysts estimated after customer visits declined for the fifth consecutive quarter. Sales at stores open at least 13 months, a key measure of retail performance, declined 8 percent, which was more than the company expected, as consumers paying higher gasoline and grocery prices cut back on premium coffee. The slowdown has forced Starbucks Chief Executive Officer Howard Schultz to back away from his previous goal of opening 40,000 new cafes as he concentrates instead on making existing stores more profitable.
The chain doubled in size to more than 16,000 stores since 2004 as it reached for its long-term goal of more than twice that number. Tightening credit markets, the U.S. housing collapse and declining consumer confidence brought those plans to a halt. Starbucks said July 1 it would close 600 underperforming cafes in major U.S. cities, 70 percent of which were less than three years old. The company is eliminating as many as 13,000 jobs, the most in its history. It also shut three-quarters of its 84 stores in Australia, backing away from a market it entered eight years ago.”
Changes they are making to try and improve business:
“The chain retrained its baristas to improve the way they made espresso, introduced a milder coffee to encourage afternoon purchases, and added a protein smoothie drink and oatmeal to its food lineup. Executives also enhanced its customer loyalty-card program with increased discounts and gave away more free coffee to lure consumers back.”
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