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TJX, Ross And Burlington Will Open The Same Number Of Stores Macy's, Sears And JC Penney Are Closing

TJX, Ross And Burlington Will Open The Same Number Of Stores Macy's, Sears And JC Penney Are Closing

Macy's Inc (NYSE: M), Sears Holdings Corp (NASDAQ: SHLD) and J C Penney Company Inc (NYSE: JCP) will close approximately 300 stores among themselves, which also happens to be the total number of stores off-price retailers plan on opening.

According to a CNBC report, TJX Companies Inc (NYSE: TJX), Ross Stores, Inc. (NASDAQ: ROST) and Burlington Stores Inc (NYSE: BURL) plan on opening 300 stores after the off-price retail group experienced a 39 percent growth in sales from 2011 through 2016.

The problem is that while few deny the strength of the off-price group, some are wondering if an average of 100 new stores each is too much growth. Also, vendors may be unable or unwilling to supply hundreds of new additional stores with off-price merchandise when they can sell it to others without a discount.

Department stores are working towards lowering their own inventory, which is a problem because some of the department stores get rid of excess inventory by selling their outdated merchandise to the off-price retailers.

Concerns Aside, The Trend Is Clear

While the concerns shouldn't be ignored altogether, the fact is department stores will always have excess inventory. Ronen Lazar, the owner of a company called Inturn which connects vendors and retailers, told CNBC excess inventory will always be "a fact of the business."

Lazar added that even if specific brands or department stores communicate to off-price chains that they will be limiting supply, there is an endless stream of other companies that can pick up the slack.

Even if an off-chain company insists of carrying a specific brand that's being cut back, it can always acquire inventory from third-party sellers.

See Also:

Macy's Biggest Foe Isn't Amazon... It's Other Brick & Mortar Retailers

5 Big Changes Coming To Macy's


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Posted-In: CNBC Department Stores Off Price Retailers retailers Ronen LazarMedia Best of Benzinga