What: For many retailers, particularly those selling "non-essentials," the outlook has been bleak, but 4,748 store closings are set for 2021, versus 4,616 openings.

Why it is important: A Coresight Research report indicates that, based on announcements so far this year from about five dozen U.S. retailers, closures are only 2.9% ahead of openings this year, compared to 142.1% ahead at the same time in 2020. But while the industry view toward brick-and-mortar is positive, the mood could quickly swing negative if business in the second half doesn’t meet expectations.

Coresight also indicated that major retailers have revealed 48.4% more openings and 37% fewer closures compared to 2020, and that U.S. store openings this year are tracking ahead of the pace in 2019 and 2018.

Sectors expanding most aggressively are dollar stores, offpricers, beauty chains, discounters and groceries. Categories seeing the greatest growth include home, athleisure, performance wear, plus sizes, sneakers, denim, fragrance and beauty. Lately, dresses, occasion and work-to-work styles have picked up. As sales strengthen, so does the inclination for brick-and-mortar growth.

Apparel is coming back. Specialty players like Aerie, American Eagle, Aritzia, Altered States and Madewell are growing. Rue21, currently with over 650 stores, set 15 openings by the end of 2021. The Aerie division of American Eagle Outfitters has targeted 76 store openings for 2021 and expects to have 500 to 600 units operating in 2023. Athleta, the fast-growing activewear division of Gap Inc., plans to open between 20 and 30 stores a year in the U.S. and will soon be opening stores in Toronto and Vancouver, Canada. And Fabletics, another active brand, sees opening two dozen stores this year, which will bring it to over 70 by the end of 2021.

Target continues to expand as well, most aggressively with its smaller urban format. The discounter has 1,909 brick-and-mortar locations, has opened 19 stores so far this year and 12 more are planned for the fall, in locations such as New York City, Hawaii and next to Disney World in Orlando, Fla. The company sees opening 30 to 40 stores annually for the foreseeable future.

Sephora has embarked on its biggest expansion ever, with 60 freestanding sites and 200 shops inside Kohl’s in the works this year. Among off-pricers, Ross Stores sees 60 openings this year; TJX plans 74, and Burlington, 92.

Other digitally native companies such as The RealReal, Bonobos, Rhone, Koio, Allbirds, Glossier and Warby Parker are also steadily opening stores. Camp, a summer camp-themed store with toys and activities such as crafts, story-telling, opened its first location in 2018 in Manhattan and has five locations now.

Dollar General sees opening 1,050 stores this year on top of the 17,000-plus units operating at the beginning of 2021 and potentially ultimately doubling its store count. Dollar Tree plans to open a total of about 600 stores this year under the Dollar Tree and Family Dollar banners.

Major retailers still downsizing include J.C. Penney, Sears, Kmart, Disney, Gap, Banana Republic, and Macy’s. Topping Coresight’s list of store closing announcements this year is Christopher & Banks with 449.

Retailers Rethink Brick-and-Mortar Potential