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Wednesday, January 1, 2020

6 Retailers That Collapsed in the Last Decade - Motley Fool

As 2009 came to a close, we were still surveying the wreckage of the financial markets' collapse and the worst economic recession the U.S. suffered since the Great Depression. While many industries were shaken, it was really only the beginning of the carnage that would spread across retail, a malaise that in many ways continues today.

Certainly the financial underpinnings of the market hurt the industry, but the rise of e-commerce to assume an essential role in how consumers shop would forever change the retail landscape. Below are six of the most notable retail failures that occurred over the last decade.

Store close banner across storefront

Image source: Getty Images.

1. Blockbuster (2010)

Because of the ubiquity of streaming video today, it seems hard to believe that 10 years ago, it was still possible to walk into a Blockbuster store and rent a movie on DVD. But the video rental chain was by that point creaking along to its demise as Netflix (NASDAQ: NFLX) flourished. 

Blockbuster would be bought out of bankruptcy by DISH Network (NASDAQ:DISH), but two years later, it would close the remaining company-owned stores. The only Blockbuster that still exists is in Bend, Oregon.

2. Borders (2011)

Equally remarkable, there were still Borders bookstores operating a decade ago, though like Blockbuster, it was also crumbling fast. It had grown to become the second largest national bookstore chain behind Barnes & Noble, but the debut of the Amazon.com (NASDAQ:AMZN) Kindle e-reader in 2007 and the launch of Apple's iPad three years later were the beginning of the end. 

Borders was slow to respond to the e-book phenomenon, and gave priority to brick-and-mortar stores instead of an effective e-commerce site. Barnes & Noble came out with the Nook in response to the Kindle, but it still struggled to fend off Amazon, and was taken private this past August. 

3. RadioShack (2015)

The demise of the original electronics superstore was a painful, slow-motion decline. Its turnaround plans were thwarted by its own lenders, which feared they wouldn't be repaid if the retailer shrunk its store footprint as much as it needed to. Instead, they forced it into bankruptcy, although Sprint (NYSE:S) initially purchased about 1,700 stores before converting them into its own wireless stores.

4. Sports Authority (2016)

Once one of the largest sporting goods chains, Sports Authority was saddled with debt from its private-equity owners, which prevented it from responding appropriately to the changing retail landscape. The threat from Amazon in particular was too great a burden for a retailer too encumbered to make the necessary changes to its operations.

Its intellectual property was subsequently acquired by Dick's Sporting Goods (NYSE:DKS), which has gone on to its own reimagining by catering to team sports and by carrying private label brands.

5. Toys R Us (2017)

The bankruptcy of Toys R Us initially sent shock waves through the retail industry, since even at the end of its life it still accounted for nearly 14% of the entire toy market. Its filing sent toy makers like Hasbro and Mattel reeling from the loss of an outlet representing about 10% of sales.

Yet it also had the effect of leading other retailers to clear out shelf space to make room for more toys. Amazon even published a catalog to highlight where consumers could buy toys. It ended up not being the toy-pocalypse many had feared, and even now Toys R Us is trying to rebound with a new retail presence.

6. Sears (2018)

Sears (OTC:SHLDQ) is another bankrupt retailer, but it's not really gone from the marketplace (at least not yet). While many of its stores have been sold off, CEO Eddie Lampert continues to operate the retailer in a much smaller capacity. 

Yet despite living on like some zombie retailer (much as it has from the beginning when Lampert first joined Sears with Kmart), the business has been on a long, slow decline into oblivion. The end remains on the horizon for the once venerable retailer, but it still survives at the moment.

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