It seems almost every day that a new retailer says it’s closing stores. Department store chains like Macy’s, J.C. Penney, and Sears have all announced plans to close dozens of stores, while Payless and Radio Shack are shuttering locations, and apparel retailers like Bebe and Rue21 are closing most of their stores as they teeter on the verge of bankruptcy.
Retailers are on pace this year to close even more stores than they did at the height of the recession — Credit Suisse said 2,880 store closings had been announced by April 6, and extrapolated a full-year total of 8,640 from there.
The store closures are also creating problems for malls, as some shopping centers in lower-income areas have gone bankrupt and others struggle to fill vacancies. The rise of e-commerce has pressured brick-and-mortar chains, and debt-fueled expansion during the housing boom years mean loan repayments for many retailers are due in the next few years, forcing some into bankruptcy.
But those vacancies in malls and shopping centers have created opportunities for other companies. Malls are increasingly turning to restaurants and alternatives like entertainment-based concepts to fill the empty space. Below are two such stocks that could benefit from malls ready to make deals to fill up space.
1. Dave & Buster’s
Dave & Buster’s (NASDAQ:PLAY) is a unique concept on the market. The company describes its entertainment and dining venues as a place to “Eat, Play, Drink, and Watch,” as it offers a restaurant and bar, TVs to watch sports, and arcade games and other amusements like bowling and billiards.
Since its IPO in 2014, the stock has risen steadily as the company has consistently beaten earnings estimates and posted comparable sales growth during a tough time for the restaurant industry.
The company currently has 92 locations in North America, but sees room for 200 or more, with plans to open 11 new outlets this year. The size of a Dave & Buster’s ranges from 16,000 to 66,000 square feet, with a target range of 25,000 to 45,000 square feet making it a good fit…