Abercrombie & Fitch’s recently announced store closures may be a harbinger of things to come for other retailers, a potential concern for commercial mortgage backed securities, according to Fitch Ratings.
Other retailers, like Best Buy, Sears, J.C. Penney, Office Depot, and Barnes & Noble, have also announced store closures. Fitch said JC Penney, in particular, is of some concern for Fitch-rated CMBS, a sizeable percentage of which contain JC Penney as part of the collateral makeup.
One development that may help stem the pain of recent store closures is that other retailers, like Wal-Mart, Costco, Dollar Stores and Forever 21 are actively expanding their store base and looking to expand.
“That said, the advent of online shopping as an alternative to traditional brick-and-mortar shopping may limit the ultimate need for store space, which in turn could have implications for CMBS over time,” Fitch said a report published today.