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Retail gets downsized

Shianne Penoli walks past the future location of Wet Seal at the Mt. Shasta Mall in Redding, Calif. in 2013. Wet Seal eventually went bankrupt closing all 338 of its stores two years ago.
Shianne Penoli walks past the future location of Wet Seal at the Mt. Shasta Mall in Redding, Calif. in 2013. Wet Seal eventually went bankrupt closing all 338 of its stores two years ago. (Greg Barnette/AP)

This month, Dorman’s Lighting & Design in Lutherville announced its closing, and local residents who have come to depend on the longtime York Road retailer of lighting fixtures were likely shocked. But they probably shouldn’t have been. You don’t have to be plugged into the Dorman family or their 78-year history of selling lamps, chandeliers, sconces and the like to recognize that some fundamental shift is taking place in the retail sector.

The community fixture – pun intended – is closing as owner Stan Dorman retires, in part because of pressures from online shopping.

To put it simply, it’s a retail apocalypse out there as thousands of stores — from local mom-and-pop shops to big-name chains — are being shuttered. So far this year, at least 5,994 closings have been announced in the United States, according to Coresight Research, which closely follows the retail industry worldwide. That is more closings than in all of 2018 when 5,864 were announced.

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Some of the closings are part of a long-term downsizing. Macy’s and Lord & Taylor, for example, have been shrinking for years as consumers move away from traditional high-end department stores and their wrap-around services in favor of discounters and their lower prices. But even successful downscale chains like Target, Family Dollar and Kohl’s have shuttered their money-losing stores (although they are expected to open more outlets overall) in order to maintain their profitability. Overall, according to Coresight, closings will run ahead of openings (including the 2,641 announced so far this year). And it’s expected to get worse. UBS recently predicted that 75,000 stores will close across North America between now and 2026.

The Story concept, which curates merchandise around a theme and rotates every four to six weeks, comes at a time when department stores like Macy's are trying to rethink how to draw shoppers.

So what is going on? Why are so many stores closing their doors when the U.S. economy is performing well and unemployment is low? The simple answer is that e-commerce is continuing to take business from traditional brick-and-mortar operators. Firms like Amazon have become an increasingly attractive option to consumers who like to point-and-click their way around the marketplace rather than do their shopping in person.

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The numbers back that up. Today, about 13 percent of retail sales are online, and UBS predicts that number will nearly double within seven years. And a lot of familiar names have taken big hits from that trend: Radio Shack, JC Penney, The Limited, GameStop, Payless ShoeSource, Sears, HH Gregg and on and on. But that doesn’t appear to be the entire story. Baby Boomers who once demanded the latest status-conferring article of clothing or other bauble are no longer in their major purchasing years. Millennials and Gen Z consumers simply aren’t as interested in mass consumption, preferring locally-sourced, environmentally-friendly, artisanal products. That may overstate the generational shift in consumerism but not by much.

Ashkenazy Acquisition was known for enhancing trophy properties when it bought Harborplace and Cross Keys, two of Baltimore's most popular centers. Seven years later, tenants have fled, the owner is on the verge of default and the centers face an uncertain future in a shifting retail landscape.

Whether due to technology or taste, the downsizing is too well established to see it ending soon. That means communities from Baltimore to Bel Air are going to have to look at their downtown retail space differently. Gone are the days when malls and shopping centers are fully loaded with Starbucks and Ann Taylors, Things Remembered and The Gap. Storefronts are going to be leased to non-traditional customers, too. Yoga studios, escape rooms and artist installations might take over spaces once reserved for clothing stores. In Somerset County on the lower Eastern Shore, churches have been moving into strip shopping plazas at such a rate that officials are reconsidering a longtime ban on liquor sales within 300 feet of a place of worship. A church might literally pop up just about anywhere.

For older folks, this trend can be jarring, not unlike losing familiar old friends. Certainly, it’s painful to watch a much-loved store like Dorman’s decide it’s time to turn out the lights. But it’s consumers who ultimately set the agenda in the retail world. Provide a product — or experience — that people want, and the world will beat a path to your door, or perhaps click on your site. If future success were guaranteed by past success, Baltimoreans would still be shopping at Sunny’s Surplus, Merry-Go-Round, Raleigh’s, Hecht’s, Stewart’s, Hochschild Kohn and Hutzler’s.

Instead of an apocalypse, perhaps the trend should be seen as an evolution. Drone deliveries? Dash buttons on every kitchen shelf? Virtual stores with “digital” dressing rooms? They might all be in the not-so-distant future. The only certainty is that the retail model of the past is getting a major shakeup. The sooner communities recognize those changes and allow for them in their long-term development and zoning plans the better off they’ll be.

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