UBS analysts predict a wave of closures as online shopping continues to rise
- UBS analysts predict 45,000 retail store closures in the next five years
- E-commerce and larger players like Temu and Shein are driving the closures
- Larger retailers like Walmart and Target will benefit, while smaller ones are at risk
- 16,500 closures could come from the ‘softlines’ retail industry
- Rising costs and lack of bank lending contribute to closures
- In-store shopping has returned, but weaker demand for clothing remains
- Companies like On Running and Deckers Outdoor are more resilient
- Stores will still be relevant for pickups and deliveries
UBS analysts have predicted that around 45,000 retail stores will close over the next five years, driven by the growth of e-commerce and the emergence of larger players like Temu and Shein. This wave of closures will benefit larger retailers such as Walmart and Target, while putting smaller retailers at greater risk. The ‘softlines’ retail industry, which includes clothing and bedsheets, is expected to see 16,500 closures. Rising costs and a lack of bank lending are also contributing factors. Although in-store shopping has returned, weaker demand for clothing remains a challenge for retailers. However, companies like On Running and Deckers Outdoor, which sell directly to consumers, are more resilient. Despite the closures, stores will still play a role in the retail ecosystem for pickups and deliveries.
Factuality Level: 3
Factuality Justification: The article contains some relevant information about the retail industry and the impact of e-commerce on brick-and-mortar stores. However, it lacks depth and context, and some statements are presented as predictions without sufficient evidence or data to support them. The article also includes some biased language and speculative claims, which lower its factuality level.
Noise Level: 3
Noise Justification: The article provides a detailed analysis of the impact of e-commerce on brick-and-mortar stores, supported by data and examples. It explores the predictions of UBS analysts regarding store closures and the changing retail landscape. The article also discusses the challenges faced by retailers, such as rising costs and shifts in consumer behavior. Overall, the article stays on topic, supports its claims with evidence, and offers insights into the future of retail.
Financial Relevance: Yes
Financial Markets Impacted: The closure of retail stores could impact the financial performance of companies in the retail industry, particularly smaller retailers. Larger retailers like Walmart and Target may benefit from the closures.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article discusses the potential closure of retail stores due to the rise of e-commerce, which can have financial implications for companies in the retail industry.
Public Companies: Walmart Inc. (WMT), Target Corp. (TGT), Bed Bath & Beyond Inc. (BYON), Macy’s Inc. (M), Nordstrom Inc. (JWN), Kohl’s Corp. (KSS), On Running (ONON), Deckers Outdoor Corp. (DECK)
Key People: UBS analysts (Analysts), Express Inc. (Clothing retailer), Overstock.com (Acquirer of Bed Bath & Beyond Inc.), Temu (Chinese discount-shopping site), Shein (Singapore-based fast-fashion giant)
Reported publicly:
www.marketwatch.com 
