The death of retail as we know it

According the billionaire investor Warren Buffett in 10 years, the retail industry will look nothing like it does now. "The department store is online now," the billionaire investor said Saturday at Berkshire Hathaway's annual meeting in Omaha, Nebraska.

Buffett's comments come at a time of massive upheaval for the retail industry.

US retailers have been closing stores and filing for bankruptcy at rates not seen since the recession.

Brick-and-mortar retailers have announced more than 3,200 store closures so far this year, and Credit Suisse analysts expect that number to increase to more than 8,600 before the end of the year. For comparison, 6,163 stores shut down in 2008, the worst year for closures on record.

Stores are closing because of the rise of e-commerce and shifts in how people spend their money. Shoppers are devoting bigger shares of their wallets to entertainment, restaurants, and technology and spending less on clothing and accessories.

There have been nine retail bankruptcies in 2017—as many as all of 2016. J.C. Penney, RadioShack, Macy’s, and Sears have each announced more than 100 store closures. Sports Authority has liquidated, and Payless has filed for bankruptcy. Last week, several apparel companies’ stocks hit new multi-year lows, including Lululemon, Urban Outfitters, and American Eagle, and Ralph Lauren announced that it is closing its flagship Polo store on Fifth Avenue, one of several brands to abandon that iconic thoroughfare.

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