After another iconic retailer announced the closing of hundreds of stores and laying off of thousands of workers, Futures on the Dow and broader U.S. stock market fell in overnight trading on Tuesday. The Futures contracts traded modestly lower for all three major U.S. indexes being off by as much as 97 points.
The retailers big and small have been losing shoppers to Amazon and eBay for years. Some like Walmart Stores have smartly invested in technology to deliver a positive online shopping experience to their customers.
The growing online stores isn’t the only reason of physical stores shutting down. There has been an aggressive over expansion of shopping malls leading to the rents rising. There has been implosion of leveraged buyouts and the consumers being cash strapped. All of which has played a major role in brands shutting their physical stores at various locations.
And the latest stock news was that the Dow’s March contract was down 31 points, or 0.1%, to 28,758.00 while Futures on the S&P 500 Index fell 0.2% to 3,293.50 and Nasdaq Composite futures also tumbled 0.2% to 9,338.00. American retailer Macy’s (NYSE:M) also announced the plans to close a fifth of their department stores and reduce 10% of its corporate staff in the coming 3 years. That means closure of 125 stores and laying off roughly 2,000 corporate workers.
There has been a decline in both revenue and profitability leading many retail stocks struggle at the end of 2019. Most of the large retail bankruptcies since 2012 have occurred at private equity-acquired chains. The private equity takeovers killed 600,000 retail jobs since the financial crisis and over a million are at risk. Plus the wages of average American workers has not grown since the Trump administration took over.