What: Shutting stores is actually not solving retailers’ underlying problems.

Why it is important: Stores remain key but need to be the right size and in the right location.

Retail chains have announced thousands of closures this year after closing a record number of stores last year. The hope is that by cutting expenses associated with physical locations, the chains can become more profitable and start growing sales again as customer purchases shift to their remaining locations and websites. But that rarely happens, according to new research and interviews with industry executives.

“Closing stores isn’t going to solve a retailer’s underlying problems,” said Stephen Sadove, the former chief executive of Saks Inc. “You have to look at why the stores aren’t performing. What is their competitive advantage and their reason for being?”

Retail Chains Shed Stores, but It Isn’t Good for Business