40 000 retail doors could close by 2029, but footwear stores could hold their own

As store closings continue to ripple across the retail landscape, footwear companies such as On Holding AG and Deckers Outdoor Corp., owner of Hoka and Ugg, should hold their own.

That’s because the two, along with Ralph Lauren Corp., have a direct-to-consumer focus along with high pricing power. Those two advantages put the three firms in the best positioned spot to navigate retail disruption, according to UBS retail analyst Michael Lasser. He said U.S. apparel and footwear online penetration reached 39% in 2023 and 2024.

Lasser on Tuesday posted his most recent annual report on store closings, this year projecting between 40,000 to 50,000 store closings by 2029 from the current store base of around 956,000 locations. In softlines retail, which includes the apparel, accessories and footwear categories, he is estimating 12,500 store closings over the next five years. That’s better than his year-ago prediction of 16 500 closures over a five-year period.

One retail category that could see more store openings than closings is sporting goods retailers, which includes athletic performance footwear.

He cited Dick’s Sporting Goods and Academy Sports + Outdoors as retailers that are “well positioned to continue to expand their market share” in the years ahead. Market share at Dick’s has been growing at a modest pace, the analyst noted, up 21% in 2023 and up 22% in 2024. Academy Sports has seen its sales grow over the past 5 years at an average of 10% to 11%.

Last month, when Academy posted mixed fourth-quarter earnings results, the company’s chief merchandising officer Matt McCabe said his firm intends to open between 160 to 180 new stores over the next 5 years. And Dick’s has on its agenda for 2025 store openings 16 House of Sport doors, 18 Dick’s Field House locations and 14 Gold Galaxy Performance Centres.

“Sporting goods industry has been one of the top beneficiaries of the pandemic as consumers were spending more of their wallet shares on outdoor activities. These trends have shown signs of stabilization,” Lasser noted, adding that sales have stabilized at “elevated levels” despite overall spending pressure on more discretionary categories, likely due to general sport/health activities becoming part of consumer routines.

The forecast was far less promising for department store stalwarts such as Kohl’s Corp., Macy’s Inc. and Dillard’s Inc., as well as for some specialty stores. “We think retailers with high leverage to shopping malls will likely continue closing stores,” the analyst predicted.

At the same time, Lasser is forecasting retail sales growth of 4% annually, with e-commerce sales continuing to rise annually and possibly reaching 27% of total retail sales by 2029 from the current level of 22%. That also means that big, differentiated retailers with robust omni-channel operations will continue to take a disproportionate share of incremental sales growth.