Market Gyrations Force 10 More
Store Closings

By  Christina Zarrello
One of retail's most celebrated stores of the future, Virgin Megastore, announced it is closing all locations beginning with its landmark Times Square store, which is slated to become a Forever 21 in April. Virgin is not alone in feeling the squeeze of a contracting economy. Sam's Club Canada, Ritz Camera, Steve Madden and others are the latest to announce store closings and bankruptcies.

Virgin Megastore: One of the last great music store chains has announced it is closing all U.S. stores by this summer. The retailer has been struggling with declining music sales. The five remaining stores set to close are located in Los Angeles, San Francisco, Denver, Orlando and New York. The famous Times Square location is set to become a Forever 21 store in April.

Wal-Mart Canada: The retail giant plans to close Sam's Club locations in Canada in order to focus on opening more Wal-Mart supercenters. The warehouse chain will close six Sam's Club locations, however Wal-Mart Canada intends on opening 26 new supercenters in Canada this year bringing the total number of Canadian supercenters to 82 and Wal-Mart Canada's overall store count to 316 by year-end.

Ritz Camera: The privately held camera supercenter filed chapter 11 on February 22, 2009. Citing slumping sales at its Boater's World unit prompted the bankruptcy filing. With 1,000 specialty camera stores and 137 Boater's World locations, the retailer is seeking $85 million in financing to keep operating while it attempts to restructure its business.

Gap: Apparel retailer announced it plans to close 100 stores primarily in the Gap brand throughout 2009. Store closures come after the retailer reported a 14 percent decline in comparable store sales for fourth quarter and a 12 percent decline for the full year. The retailer also acknowledges that it plans to open 50 locations this year.

Aeropostale: The apparel retailer is closing its Jimmy'Z concept which includes 11 Jimmy'Z stores. The chain announced it will be focusing instead on its core Aeropostale business and roll out a new U.S. retail concept that targets a younger demographic. Jimmy'Z stores targeted male and female shoppers ages 18 to 25.

Steve Madden: The specialty retailer of fine shoes, handbags and accessories is closing up to 13 stores in 2009. Steve Madden opened three stores and closed seven stores during 2008, ending the year with 96 retail stores. The company plans to open two to three stores and close between eight and 13 stores during 2009.

Zales: The jeweler announced it will close 115 underperforming jewelry stores, eliminate 245 positions and improve store efficiencies and inventory reductions in its second phase of a $175 million cost reduction plan. In its fiscal second quarter report on February 25, 2009, the jewelry chain announced a net loss of $23.6 million, partly due to a 17.9 percent decrease in revenues and 18.1 percent decline in comparable store sales.

Finlay: The jeweler is closing its department store outlets to concentrate on its specialty jewelry stores. It also plans to close a total of 40 underperforming specialty stores. "Given the decline in our department store business over the past five years coupled with the strenuous economic conditions, we view our strategic plan to exit this business segment as a necessary measure," says Arthur Reiner, CEO, Finlay.

Everything but Water: Swimwear retailer filed for Chapter 11 in late February citing tough economic conditions. It currently operates 70 stores in 26 states and is seeking a buyer. The company has listed $58 million in assets and $35 million in liabilities. The Florida-based company was bought in April 2006 by Bear Growth Capital Partners and is now owned by JP Morgan Chase

Z Gallerie: Eclectic home furnishings retailer plans to close 25 stores. Approximately 350 positions will be eliminated as well. In addition, the company plans to downsize its distribution network. After the closings, the retailer will continue to operate 52 stores as well as sell items via its Web site.

To learn more about Virgin Megastore's store closing plans, see:

Virgin Mega-Destruction

For more up-to-date news on store closings and retail bankruptcies, see:

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