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American retail is in the midst of a paradigm shift. Amid a retail climate that is increasingly dominated by online sales, brick and mortar chains are being forced out of arenas that they once dominated.

Ten years ago, Sports Authority, which operates 466 stores across the United States, was the nation’s largest sporting goods retailer. Yesterday, it announced it would close all of its stores. Aérospostale, a casual clothing and accessories brand, Scoop, a high-end boutique chain, and Quicksilver, a surfwear retailer have each recently filed for bankruptcy and face similar fates.

The demise of bricks and mortar retailing could spell trouble for many, including the thousands of workers Sports Authority currently employs who now face uncertain futures. Many of the 29-year-old company’s 15,001 employees are expected to hit the jobs market. The timing is inopportune.

A sales associate at Sports Authority’s Denver location, who didn’t feel comfortable giving her name, said she has already begun looking for another job. “I am really willing to do pretty much whatever,” she said. Word is the location will be closing sometime in June. “I honestly don’t know what I’ll do,” she said.

Sports Authority is one of the latest national retailers to fall prey to mega “e-tailers” such as Amazon, that increasingly draw consumers, lured by convenience and endless selection across myriad categories, off the streets and onto the screen.


A search for “Wilson tennis racquet” yields almost 2,000 results. 

In 1999, e-commerce accounted for just 0.6 percent of all retail sales. Last year, it made up 7.5 percent of total retail sales, according to seasonally adjusted economic data from the Federal Reserve. April’s retail sales report, released last Friday, showed remarkable gains in online sales – they jumped 2.1 percent.

Some soon to be former Sports Authority employees will find work with its competitors – Modell’s, Dick’s, Cabela’s, Bass Pro Shops – or at other retailers, but some will have to pivot toward other industries. “Obviously not all of them are going to be able to find jobs in retail,” said Thomas Simons, an economist at Jefferies. “They are going to need to find new skills.” Simons noted that many retail workers are younger, and can more easily be retrained to find different types of jobs than older workers.

Domisah Purnell, a cashier for Sports Authority in Brooklyn, doesn’t know when the store will close, or what she’ll do next. “I am starting to look for other things. I will most likely look to work as a cashier because I have the most experience in that.” She has no work experience outside of the retail industry, but is confident she’ll be able to find another similar job.

Salespeople at other bankrupt national retailers including Aéropostale, are too unsure of what they’ll do next. Jeffrey, who for privacy purposes declined to give his last name, expects that within six weeks he’ll be out of a job at the casual apparel company’s Times Square location. “I’ll either file for unemployment because I’ll be laid off or I’ll see if my stepdad can get me a job at Sheraton Hotels, where he works. But that’s a back up plan. If I don’t find anything else, I’ll just go there,” he said.

Although today’s jobs market is relatively strong, the retail industry shed jobs last month, and will likely to continue contracting. By the end of 2016, retail layoffs are expected to be at their highest level since 2010.

Dollar stores are thriving – Dollar General plans to open about 2,000 new stores by 2017, to operate more than 14,000 total stores. But dollar stores are unlikely to offer wages that are above or even match wages at Sports Authority. Despite gradual wage growth – overall wages rose 0.3 percent in April – more job seekers and fewer job openings in the retail arena will put downward pressure on wages, Brown said.

“A lot of these chains are closing right now, and the bad news is that you are probably an under skilled worker, and that’s why you’re working in retail. You’re going to have a hard time finding another opportunity in retail,” said Garrick Brown, Vice President of Retail Research at Cushman & Wakefield.

There’s a potential silver lining, though. Some retail workers might be able transition into office work, for which they could earn more than in retail. “If you get into more professional services the wages are higher and benefits are better.”

The prospects for the real estate occupied by liquidating or downsizing retailers is also uncertain. Sports Authority’s 466 stores range in size from 8,000 to 80,000 square feet, and could eventually be developed into other property types. If the trend away from big-box retail continues, their leasing agents will have trouble finding new tenants.2016-05-26 16.36.37 HDR

“I think rents will probably drop and I think some very large retailer properties are going to need to be repurposed at some point over the years. I think there are going to fewer and fewer of those properties that will make economic sense to run at that size,” said Jefferies economist Thomas Simons.

Sports Authority’s competitors could take over existing stores, and enter new geographic markets. Some spaces could be transferred to grocers, which often occupy spaces that are between 30,000 and 40,000 square feet. “A fair number of retailers are this size box,” said retail expert Joseph Feldman.

Feldman said that the brick and mortar retail model should be adjusted, but that it won’t ever be slaughtered by e-commerce. “If you live in a place like Columbus, Ohio and everyone on the block wants something delivered at a different time, it’s very expensive. I understand why it’s attractive to the consumer, but the consumer is going to pay for that ultimately. There’s a reason why for three millennia there have been markets and bazaars that people go to and buy stuff.”

“Chances are they’ll be filled with something,” Larry Perkins, CEO of SierraConstellation Partners, an advisor to middle market companies in transition, said of the vacancies. “But it may not be fast.”

Nick Rossollilo, president of Concinnity Financial, sees evidence of a longer-term trend in Sports Authority’s shuttering. “I think someone will move in on the Sports Authority assets in some of the locations but I do think some of them will close up and just stay vacant.”

“It’s probably a scary time to be an investor or owner of commercial real estate,” he said.