A massive retailer closes locations and now begins layoffs according to the latest Worker Adjustment and Retraining Notification filings.
Target Corporation’s recent announcement of the permanent closure of two Washington stores, leading to a mass layoff of 90 employees, sheds light on the growing challenges faced by retailers.
The decision, driven by concerns over organized retail crime and theft, signals a broader issue impacting the retail sector.
The closure of Target stores in Seattle University Way and Seattle Ballard, scheduled for December 30th, has been disclosed through the Worker Adjustment and Retraining Notification (WARN) system.
This strategic move is a response to Target’s ongoing assessment of store performance and the rising hurdles posed by theft and organized retail crime.
According to Capital One’s report, retail experienced a significant revenue loss of $94.5 billion in 2021, with external theft, including shoplifting and organized retail crime, contributing to 37% of the total losses.
The report highlights the escalation of retail theft value due to currency inflation, a factor exacerbating the challenges faced by retailers.
In 2022, Washington state’s retail sector suffered substantial losses, witnessing a $1.685 billion decrease in revenue attributed to theft.
Each resident accounted for an average of $274.43 in lost sales, emphasizing the economic consequences of theft. Felony-level thefts of $750 or more added gravity to the situation, portraying the severity of the issue in the state.
Return fraud further intensified the impact, causing an estimated $1.830 billion in lost sales revenue and contributing to a total retail loss of $3.515 billion.
Layoffs and closures within the retail industry continue to be ongoing and developing stories.
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Also Read: A US Company Now Declares An Unexpected Bankruptcy
Other Economy News Today
Another US company now declares an unexpected bankruptcy after its liabilities largely consumed its total assets this year.
Parts iD, a technology driven automotive company, has filed for Chapter 11 bankruptcy.
“Management believes that the company is a market leader and proven brand-builder, fueled by its commitment to delivering an engaging shopping experience; comprehensive, accurate, and varied product offerings; and continued digital commerce innovation,” the company said in its most recent earnings filing.
In that report, the company showed about $18.7 million in assets against more than $55 million in liabilities.
In its bankruptcy filing, Parts ID reported similar numbers.
The company has continued to operate, and its websites remain online and operational.
As of 10:32 a.m. EST Dec. 27, Parts ID had not posted anything about the filing on its corporate and consumer-facing websites.
Even before the Chapter 11 filing, Rapid Ratings, a service that uses public data to track public companies’ financial health, rated the company a “very high default risk.” That rating was released on Dec. 16, 10 days before the Dec. 26 bankruptcy filing.
“A Core Health Score of 26 suggests low levels of efficiency and a performance which is not sustainable over the long term,” Rapid Ratings reported on its website.
“Within the Resilience Indicators, we see significant weakness, and at this Core Health level, these Resilience Indicators are critical in determining default risk.
Companies with this combination of Core Health and Resilience have a seriously troubling short- and medium-term outlook.”
Parts ID has not commented on the Chapter 11 bankruptcy filing, but in its Q3 earnings release it outlined some cost-cutting efforts.
“During 2022, we took several measures to reduce operating costs, including reducing advertising expenses, general and administrative overhead, and capital expenditures,” the company said.
Also Read: A US Bank is Now Denying Customers Access to Money
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