169 store closures in just 20 days sparks warning retailers are heading for a ‘notably bad year’

The huge number of stores closing in the first few weeks of the new year could have a knock-on effect as experts warn the the worst is yet to come. 

A whopping 169 stores have closed in two weeks and experts are now concerned that the collapse of the sector could affect landlords struggling to fill the vacant shops.

The first few weeks of 2020 have been devastating for the sector, with household names like Harris Scarfe, Jeanswest, Bardot, Roger David announcing closures.

January administrations are not uncommon as stores often keep doors open over Christmas in a bid to stave off a potential collapse. 

Analyst Lauren Berry told the Sydney Morning Herald it’s been a ‘notably bad year’ and things are likely to get worse.

Ms Berry said the ongoing shop closures are likely to start having a flow on effect for the real estate investment trusts like Stockland, Vicinity and Scentre (who own the Westfield Group).

Bardot is among the 169 retailers that has announced it will cease operating in Australia after poor sales

She said it’s standard for lease negotiations to take place once administrations occur. 

‘Therefore, even if the stores remain open, it’s likely that rents may be revised downwards to ensure viability,’ she said.

Meanwhile the extent of the retail industry’s struggles are something never before seen by retail expert and Queensland University of Technology professor Gary Mortimer. 

The first few weeks of 2020 has been devastating for the sector, with household names like Harris Scarfe, Jeanswest, Bardot, Roger David among the first to go

Mr Mortimer told the Sydney Morning Herald major retail landlords like Stockland will respond to the closures with a knee-jerk reaction and that could be even worse for other retailers.

‘Centres will react with short-term fixes, which is filling the gap with another retailer, another massage clinic or nail salon, without thinking much about the overall retail offer at the centre,’ he said.

‘That’s problematic because replicating a retail offer over and over again will cannibalise the existing sales of existing retailers, who then might go out of business.’

Department store Myer is closing it’s branch in Hornsby (pictured) 

Meanwhile it’s not just brick and mortar businesses feeling the pinch, with a drop in confidence for online technology marketplace Kogan reflected in a 20 per cent drop in share price. 

Discount retailer the Super Retail Group also suffered a 4 per cent drop in shares.

The dwindling confidence in the sector was a result of an update to the sharemarket on Monday which warned of slow Christmas sales and the impact of the nation’s bushfires. 

Entrepreneur Dick Smith previously told the Daily Mail Australia the outlook is so bad for the retail sector, high-profile collapses will accelerate until there’s very little left.

‘We will end up with just Amazon and Aldi and basically all the Aussie companies will be sent to bankruptcy,’ he said.