Pressure from Shein, Temu accelerate retail closures
Published On Jan 24, 2025, 6:05 AM
The U.S. retail sector is expected to face a significant wave of store closures, with estimates rising to 15,000 in 2025 due to fierce competition from eCommerce platforms like Shein and Temu, which attract consumers with low prices and convenient online shopping. Major retailers, already struggling, have begun announcing closures, with over 1,900 expected by early 2025. The increasing number of store closures is pressing legacy companies to adapt or perish in a landscape evolving rapidly due to shifting consumer preferences, inflation, and potential tariffs that could further disrupt the market.
Stock Forecasts
M
Negative
The ongoing challenges in the retail sector point to a troubling trend that may result in further losses for traditional brick-and-mortar retailers, particularly as eCommerce continues to grow. Retailers like Macy's and Big Lots are facing significant headwinds. Their stock prices may drop as they report losses and store closures mount.
XLY
Positive
Conversely, companies like Shein and Temu, which dominate the fast fashion online market, are on an upward trajectory in terms of sales and market share. However, as they are not publicly traded entities, no specific stock can be recommended. But investors might look for ETFs or stocks focused on eCommerce growth.
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