Big-Box Retail Closings a Sign That a Shakeout Is Overdue

NEW YORK CITY-Brad Mendelson says he walked into an Office Depot before the retailer announced it was closing 70 stores and he knew the office supplies provider was in trouble. “I saw the lack of traffic and knew they were going to close,” says the executive managing director of Insignia/ESG.

He doesn’t say whether or not he had a premonition of Sears also shuttering some of its outlets. But indeed, as GlobeSt.com reported on Friday, the retailer is closing 87 stores throughout the country, a move that comes almost immediately on the heels of Montgomery Ward filing for bankruptcy protection.

Mendelson, who adds that the Office Depot move will include five New York stores, says that this is only the beginning in a market where competitors are offering little differentiation. “Here’s the problem,” he tells GlobeSt.com. “There are so many retailers today who are doing the same thing. You have Office Depot, Office Max and Staples. And then there are the crossovers like Kinkos. Those retailers that offer a business not replicated 50 times over will survive.” (Insignia/ESG does not represent Office Depot.)