When A Store Closes, Where Must Everything Go?

Image courtesy of jakerome

With a record number of retail bankruptcies this year and surviving chains trimming their store counts, there are a lot of store closing sales happening across the country. Yet when a store closes its doors and the liquidation sales have been thoroughly picked over, where does everything end up?

As American Apparel’s retail operation winds down and other fashion retailers empty their racks and put their gates down for the last time, Racked looked at how employees wind down a store’s affairs.

While we advise readers to avoid liquidation sales early on because the deals aren’t that great, an expert from liquidator Tiger Capital explained that most consumers don’t follow our advice.

“Because we liquidate so much, we know what things sell for, whether that’s 30% or 90% off,” the liquidator’s executive managing director explained.

It’s not a good deal if you’re a practiced bargain-hunter and take the worse return policy into account, but most people aren’t, and companies like Tiger Capital know what most people will pay.

There are some items that one rarely sees on sale, like Apple products. When emptying out a closing Macy’s store, the liquidators knew that they only needed to mark Apple Watches down 5% before they would fly out the door.

There’s one concern that may not have occurred to you as a shopper, though: The former store employees and “seasonal” workers helping to clear out the store have the task of making it not look like a disorganized mess, and of protecting the brand when the company isn’t going out of business entirely.

The signs that you’ll see at a closing Macy’s, for example, will be less garish than the ones on display at a retailer that’s going completely out of business, since the goal is to empty out the store while not making shoppers think that all of the retailer’s locations are shutting down.

Fixtures like racks, mirrors, and shelving are most useful to other retailers, who will claim them in advance. Stores with regular furniture usually offer them first to employees, then to customers.

One sore point is the merchandise that doesn’t sell. Employees at an American Apparel store in Brooklyn were told to donate leftover merchandise. Other stores send it to off-price clothing retailers like TJMaxx and Marshalls, and a representative of those chains’ parent companies wouldn’t confirm or deny to Racked whether it buys stock from stores that have closed.

Another option when multiple stores near each other are closing is to move merchandise to the soon-to-be former store with the highest foot traffic.