It’s a pretty tough time to be a legacy retailer right now.
Unless that retailer has somehow learned to pivot away from the traditional brick and mortar model and into online operations, things can get pretty grim pretty fast.
Related: Iconic ice cream chain unexpectedly closing locations
Of course, this wasn’t the case a decade or two prior.
Back then, it was nearly critical for any self-respecting business to invest heavily in the in-store shopping model.
This meant having a large footprint that allowed for plenty of brick and mortar stores. The more stores you could afford to run, the more potential foot traffic you’d attract.
And when you have more customers breezing through your doors, they’re more likely to add items to their basket that they may not necessarily need. So stocking lots of inventory is essential.
Of course, the advent of online shopping has turned this model on its head.
Nowadays, most of us prefer to get at least some portion of our goods online. Whether that’s because we know we can get a better deal from an online retailer, we’re digitally native, or we simply prefer the convenience, only the businesses that pivoted to an online model continue to win out.
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Brick and mortar businesses struggle
And competition from companies with a robust e-commerce presence is just one component to the convoluted situation.
Issues with inflation, supply chain constraints or mismanagement, and the complicated — and at times, slow — adjustment to a post-pandemic world have made the issue far murkier for companies that rely on in-person business either primarily or alone.
More closings:
- Another struggling mall retail chain closing more stores
- Struggling supermarket chain closes more locations
- Popular bank closing dozens of branches (locations revealed)
In 2024, retail closures increased by over 23% year over year. And a new report by Coresight predicts 2025 could see that number surge to over 15,000 store closures this year alone.
And recent struggles with legacy retailers like Joann, Party City, and Forever 21 are testaments to how difficult the picture is. All of these stores offered primarily in-store shopping experiences and notoriously keep a lot of inventory on hand.
As those shoppers dry up, lots of stores (which are expensive to operate) and lots of inventory can quickly turn into liabilities that are hard to offload.
Legacy retailer closing more stores
Another retailer that has been hit hard by the rise of e-commerce is GameStop.
The retailer, which rose to fame again during the pandemic meme stock craze, closed over 1,000 stores in fiscal year 2024 after running into competition from online gaming companies, which don’t require customers to stop into a store to get the latest game.
Those closures were in:
- 590 stores in the U.S.
- 336 in Europe
- 33 in Australia
- 11 in Canada
But GameStop isn’t finished. It will continue to close a “significant number” of stores in 2025, per its recent 10-K.
“We have also initiated a comprehensive store portfolio optimization review which involves identifying stores for closure based on many factors, including an evaluation of current market conditions and individual store performance,” GameStop said. “This review, among other things, resulted in the closure of 590 stores in the United States in fiscal 2024. While this review is ongoing and a specific set of stores has not been identified for closure, we anticipate closing a significant number of additional stores in fiscal 2025.”
Those closures are likely to take place over the next several months.
Currently, GameStop still operates about 3,203 stores across the globe. That sounds like a lot, though it operated upwards of 6,000 just 10 years ago.
