In the second quarter of 2017, the U.S. economy saw its fastest-paced growth in two years, hitting a strong 3 percent growth rate as unemployment fell to a 16-year low. But despite a positive outlook, not every American company came away unscathed.
As the retail advisors at Vend put it, “smaller stores are in; larger stores are out.” Though under-the-radar downsizing wasn’t exclusive to retailers in 2017, it was certainly a trend for brick-and-mortar businesses. Whether through layoffs or store closures, these 20 companies cut back dramatically and might give us a peek at some business trends on the horizon for 2018.
1. Sears Holdings
CEO: Eddie Lampert
Downsized: More than 300 stores closed, 400 jobs cut
Market Cap: $504.15 million
YTD Performance: -50.48 percent
In an official blog post, Sears CEO Eddie Lampert wrote, “We have fought hard for many years to return unprofitable stores to a competitive position and to preserve jobs and, as a result, we had to absorb corresponding losses in the process.” Over the summer, the announcement of 43 additional Sears and Kmart retail store closures brought the total number of 2017 shutdowns to over 358 — and 63 more are expected to close in January of 2018.
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CEO: Elon Musk
Downsized: 400 to 700 jobs cut
Market Cap: $51.16 billion
YTD Performance: 41.79 percent
In a Q4 2017 struggle to increase production of its Model 3 electric sedan, Tesla’s performance reviews — which say only 260 cars were produced for a 450,000-customer wait list — were bad news for its employees. Among the company’s 33,000 workers, managers, factory personnel and engineers were fired in favor of increasing automation. In October, the mass firings spread to Tesla’s SolarCity division, as well. While Tesla’s current struggles are worrisome, the company still has the potential to become the next Apple or Amazon.
3. Michael Kors
CEO: John Idol
Downsized: Up to 125 stores closed
Market Cap: $8.18 billion
YTD Performance: 26.87 percent
Michael Kors was another victim of quiet company downsizing in 2017. A misguided and extremely aggressive retail expansion during the handbag boom of recent years and a lack of hit products since then caused Kors to flounder. The company said in a May earnings report that it plans to shutter about 15 percent of its retail fleet over the next two years.
CEO: Paul Raines
Downsized: Up to 190 stores closed
Market Cap: $1.74 billion
YTD Performance: -30.48 percent
When GameStop’s crucial holiday sales weren’t up to snuff in 2016 — with new hardware sales declining by 29.1 percent and new software sales by 19.3 percent — the video game chain took action. In an earnings release, Gamestop said that it anticipates it will close 2 to 3 percent of its stores in an effort to reduce its total retail footprint. In 2018, GameStop said it plans to refocus on smaller, collectible-oriented Technology Brand stores.
CEO: Jeffrey Gennette
Downsized: 68 stores closed, 10,100 jobs cut
Market Cap: $5.35 billion
YTD Performance: -45.55 percent
Like GameStop, Macy’s declining holiday sales in 2016 led to downsizing in 2017. The culprit for the decline was simple: intensely stiff competition from online retailers. The closing of 68 out of its total 730 stores affected thousands of employees and eliminated over 9 percent of the company’s retail presence. Despite these shortcomings, Macy’s might be a company to invest in before the end of the year.
6. Payless ShoeSource
CEO: Martin Wade III
Downsized: 700 stores closed
Market Cap: N/A
YTD Performance: Delisted
In 2017, Payless joined the ever-growing list of bankrupt companies in the retail sphere, filing Chapter 11 in April. In the filing, the company cited massive debt — with liabilities estimated between $1 billion and $10 billion versus only $500 million to $1 billion in assets — and weak retail sales as part of the reason for the widespread closures.
7. Ford Motor Company
CEO: James Hackett
Downsized: About 1,400 jobs cut
Market Cap: $47.91 billion
YTD Performance: -0.74 percent
Like the retail sphere, the auto industry was hit hard in 2017. In May, outplacement firm Challenger, Gray & Christmas reported that Ford Motor Company would lay off 20,000 employees globally, but the company itself later clarified that the number was closer to 1,400. The cutbacks occurred as automakers scrambled to adapt to increased customer demand for electric vehicles and to the upcoming focus on self-driving cars.
8. The Hershey Company
CEO: Michele Buck
Downsized: About 3,100 jobs cut
Market Cap: $22.11 billion
YTD Performance: 4.20 percent
Unfortunately, retail and auto weren’t alone in 2017 — the Big Food industry saw declining sales, as well, forcing companies like General Mills and Kellogg to cut jobs. Hershey’s announced it would lose about 15 percent of its 20,650-person workforce in 2017, citing its “Margin for Growth” program, which intends to improve profit margins by reducing administrative expenses and streamlining the supply chain.
CEO: Marvin Ellison
Downsized: 138 stores closed, 5,000 jobs cut
Market Cap: $779.96 million
YTD Performance: -66.91 percent
JCPenney shuttered 138 stores — or about 14 percent of its retail locations — as part of 2017’s department store apocalypse. The closures will allow the company to, as CEO Marvin Ellison said in a statement, “adjust our business to effectively compete against the growing threat of online retailers.”
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10. State Farm
CEO: Michael Tipsord
Downsized: 11 offices targeted for closure, 4,200 jobs to be cut
Market Cap: N/A
YTD Performance: 12.19 percent
In 2016, State Farm Mutual Automobile Insurance Co. reported $7 billion in losses — with that kind of hit, downsizing was inevitable. In an effort to streamline operations and concentrate its employees on larger markets, State Farm said it plans to shutter 11 offices and displace 4,200 jobs by 2021.
11. Weatherford International
CEO: Mark McCollum
Downsized: 3,000 jobs cut
Market Cap: $4.04 billion
YTD Performance: -19.24 percent
Weatherford might have cut 9,000 jobs in 2016, but it didn’t end there. Due to a worldwide decline in energy prices, the oilfield service company cut thousands of jobs and closed numerous facilities, aiming to shed its debt. It’s not over yet — in 2018, Weatherford said it plans to sell its drilling rigs business to Middle Eastern and African companies, too.
12. General Motors
CEO: Mary Barra
Downsized: About 5,000 jobs cut
Market Cap: $59.81 billion
YTD Performance: 22.69 percent
Between November 2016 and May 2017, General Motors eliminated factory shifts at U.S. plants in five different rounds, cutting roughly 5,000 jobs, according to CNN Money. GM hoped to stabilize production after auto sales slowed in 2017, ensuring that it is not saddled with too much unsold stock. In brighter news, the carmaker said it hopes to return about 700 laid-off employees to work as production rises once again, making it a company you should watch in 2018.
13. The Limited
CEO: Avra Myers
Downsized: 250 stores closed, 4,000 jobs cut
Market Cap: N/A
YTD Performance: Unlisted, as The Limited is an LLC
The 2016 holiday retail slump hit hard, but perhaps no company responded as drastically as The Limited. Within the first few days of 2017, the women’s clothing chain announced that it was closing every single one of its retail locations and laying off about 4,000 employees in order to make a full transition to e-commerce.
14. Eli Lilly
CEO: David Ricks
Downsized: 3,500 jobs cut
Market Cap: $92.48 billion
YTD Performance: 12.99 percent
In an attempt to save an estimated $500 million annually beginning in 2018, drugmaker Eli Lilly said it would cut roughly 8 percent of its global workforce in 2017, equivalent to 3,500 positions. Moving forward, the pharmaceutical company plans to invest more in developing new medicines and improving its cost structure.
15. Abercrombie & Fitch
CEO: Fran Horowitz
Downsized: 60 stores closed
Market Cap: $828.43 million
YTD Performance: 4.33 percent
A merchandise makeover and brand-new advertising campaign couldn’t rescue Abercrombie & Fitch from the great retail slump of 2017. After holiday 2016 sales dropped 13 percent compared to the previous year and overall sales declined for 16 straight quarters, Abercrombie announced moves to reduce its retail footprint.
CEO: Manny Mashouf
Downsized: 180 stores closed
Market Cap: $41.94 million
YTD Performance: 2.16 percent
Like The Limited, Bebe didn’t just quietly downsize in 2017, it imploded. By the end of May, all 180 of its retail locations went the way of the dodo, with all merchandise and fixtures facing liquidation. Mirroring The Limited, plummeting in-store sales led the women’s apparel company to seek reinvention as an online brand.
CEO: Victor Herrero
Downsized: 60 stores closed
Market Cap: $1.33 billion
YTD Performance: 36.28 percent
Stop us if you’ve heard this one before: Declining Q4 sales force a mall-oriented retailer to shutter a significant portion of its storefronts. Guess experienced a very common story in 2017, closing about 6 percent of its stores in an attempt to improve operating income and focus on global markets. In 2018, the company could lose an additional 100 to 120 storefronts, according to CEO Victor Herrero.
CEO: Larry Merlo
Downsized: 70 stores closed
Market Cap: $69.9 billion
YTD Performance: -10.23 percent
CVS’s downsizing was quiet mostly due to the pharmacy’s size; with more than 9,600 locations across America, the 70 shuttered stores account for approximately 0.7 percent of the chain’s retail footprint — so you’ll still have plenty of locations to choose from to snag that last-minute Christmas gift. Nonetheless, the closures were a response to ongoing drops in sales and were coupled with a health-oriented rebranding in what CEO Larry Merlo called a “rebuilding year” for the company.
CEO: Kevin Kovacs
Downsized: 220 stores closed, about 5,000 jobs cut
Market Cap: $102,900
YTD Performance: -99.74 percent
Things didn’t look so good for electronics retailer Hhgregg in March of 2017, when it said in a news release that online competition would force it to close 40 percent of its stores and cut 29 percent of its workforce. Things got worse in April, when the company announced a full-on closure of all 220 retail locations, followed by a liquidation of its assets.
CEO: Dene Rogers
Downsized: More than 1,000 stores closed
Market Cap: N/A
YTD Performance: Delisted
Bankrupt companies and electronics retailers became truly synonymous in 2017. RadioShack filed for bankruptcy for the second time in two years in early March, just days after Hhgregg did the same. Then, over Memorial Day weekend, the company said it would shutter more than 1,000 of its stores. Having recently exited bankruptcy, the company now expects to operate primarily as an online retailer.
Company year-to-date performances and market caps were accurate as of Nov. 9, 2017.