No holiday cheer as online shift costs US retailers billions of dollars

No holiday cheer as online shift costs US retailers billions of dollars

By  
SHARE

It’s gloom time for American malls and retailers. Despite the fact that the holiday season is around the corner – a time when consumer spending is at an all-year high – a survey has it that 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.

No holiday cheer as online shift costs US retailers billions of dollars
While overall sales have risen a cumulative 31 per cent, department store sales have plunged 17 per cent, according to Commerce Department data

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

TELL US: Can online & offline co-exist in India?

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

READ MORE: Walmart shifts focus to e-strategy, will go easy on store openings and profit

, 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.

Cumulative losses from mostly 10-year CMBS loans issued in 2005 to 2007 have hit $32.6 billion, according to Wells Fargo.

ALSO READ: The online retail scenario in India

Between the end of 2009 and July 2016, e-commerce doubled its share of the retail pie and while overall sales have risen a cumulative 31 per cent, department store sales have plunged 17 per cent, according to Commerce Department data.

READ MORE: Aeropostale files for Chapter 11 bankruptcy protection