New research recommends fewer department store locations to regain productivity levels

26 April 2016 (Last Updated April 26th, 2016 18:30)

New research from US-based Green Street Advisors has recommended the closure of a number of department stores chain locations to regain productivity levels.

New research from US-based Green Street Advisors has recommended the closure of a number of department stores chain locations to regain productivity levels.

The research firm recommends the closure of some 800, or about a fifth of all anchor space in malls in the US, reported Wall Street Journal.

The research comes in the wake of the advent of speciality stores and online merchants such as Amazon, which are earning profits by competing against department store chains such as Sears, J.C. Penney and Macy's.

The research suggests discount fashion chain J.C. Penney to close a total of 320 locations, or 31% of its stores, to return to its 2006 productivity levels.

"The research firm recommends the closure of some 800, or about a fifth of all anchor space in malls in the US."

It also sees the need for fashion retailer Nordstrom to shut 30 stores, in order to achieve better productivity levels.

Having recently stores at 40 locations, Macy's has been recommended to close another 70 locations.

According to Green Street, sales in US department stores have witnessed a 24% decrease since 2006, with stores reducing their physical footprint by roughly 7%, reported the publication.

Earlier this week, retail conglomerate Sears Holdings unveiled plans to close ten Sears stores and 68 Kmart outlets this year.

The latest move follows a comprehensive evaluation of the company's store portfolio aimed at identifying branches nearing lease expirations, as well as those performing unprofitably.

All of the Sears outlets and a number of the Kmart stores will close in late July.