Home Depot, the largest home improvement chain in the United States has shelved plans to open 50 new stores as it battles hard with the housing slowdown and economic downturn. (The chain will still open the 55 stores it planned for 2008. But it will not build 50 stores it has had in the works for up to 10 years) For the first time in its 30 year history, Home Depot will open new stores at the slowest rate as it permanently scales back plans for expansion after 2008. Additionally, 15 poorly performing locations will also be closed.
However, Home Depot is not the only one scaling back expansion plans or shutting down stores. Other major retail chains like Starbucks, Foot Locker, Pacific Sunwear, Charming Shoppes, J. C. Penney, Kohl’s, Wal-Mart and Ann Taylor have announced plans to slow their expansion or delay store openings. Trade group, The International Council of Shopping Centers, predicts 5,770 store closings in 2008 – an increase of 25 percent from last year.
This has prompted analysts to comment that these retails chains made overly ambitious expansion plans when consumer spending was unusually robust and that America is over-stored.
Retail Chain – Number of stores for close/delay
Ann Taylor – 117
Charming Shoppes – 150 stores
Foot Locker – 140 stores
J. C. Penney will open 36 stores instead of 50 planned
Kohl’s will open 75 instead of 100 planned in 2008
Starbucks – 100
Wilsons – 158
Zales – 100