Online Businesses Putting Massive Retailers Out of Business!!

Walmart has announced that they are going to be focusing the majority of their attention on online platforms and the realisation has hit home that everything is moving away from retail towards the internet. Brick and mortar stores will soon be a thing of the past.

2016 has seen thousands of major retailers forced into closing as the overheads are too big and online sales are draining away their profits. Commercial real estate loans are also hefty, something that doesn’t become as much of an issue when you have a mainly online presence.

Americans are spending less and less at the malls, preferring to shop online. As a result, many US department stores are facing bankruptcy and closure.

According to Morningstar Credit Ratings data quoted by Reuters, $128 billion in commercial real estate loans are due to refinance between now and the end of next year.

Wells Fargo says $38 billion of this was borrowed by retailers and sold as commercial mortgage-backed securities (CMBS) to institutional investors.

Morgan Stanley, Deutsche Bank and other banks say half of these CMBS will face a tough time to get financing on the current terms.

Online shopping and discounts are the main reason for this.

The US Department of Commerce says overall sales have grown 31 percent from 2009, while department store sales have plummeted 17 percent.

Howard Davidowitz, chairman of Davidowitz & Associates, whose firm has consulted retailers since 1981, is predicting half of the 1,100 regional malls will be closed.

This month, Wal-Mart reported it wants to shift from retail and bet on online business. Chief Financial Officer Brett Biggs said Wal-Mart would mainly remodel its existing stores and invest in e-commerce with only 20 percent going to the opening of new stores. – Russia Today

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