Retail is in the red across America as coronavirus-related closures have pushed already struggling retailers over the edge.

The apparel chain J.Crew is one of them. It has becoming the first major retailer to file for bankruptcy since the pandemic closures began.

“You had this phenomenon where you had this overbuilt retail, combine that with the pressures from e-commerce, it was already a real volatile sector,” said Rick Stein with Urban Decision Group. “Then throw COVID-19 into it. It is likely that this will be the thing that kills off an awful lot of retail.”

Stein’s company has conducted a commercial analysis to quantify the impact the closures have had on retail.

“None of these businesses had plans for a zero-revenue situation,” said Stein. “We are estimating as many as 40% of existing small store clothing retailer could close.”

UDG’s research shows so many small apparel retailers are planning to close their stores for good because, in addition to zero or near zero revenue, they are struggling with reopening unknowns. One major unknown is how many customers will be allowed to enter their stores at one time. Another is if customers will even be able to try on clothes. The latter is one of the main reason customers come into brick and mortar store locations.

“When you put all those things together, it can spell the death nail for a lot of retail,” Stein added.

According to Coresight Research, around 15,000 stores are expected to permanently close this year, which is at least 50% higher than last year’s record high of 9,548 retail store closures.

Several major retailers, similar to J.Crew, will like shutter many stores but the companies won’t cease to exist. Most will start closing a mass number of stores after filing for Chapter 11 bankruptcy, which will allow them to restructure.

“The big push years ago was to be in every mall, to have locations everywhere, I think the exact opposite will be now,” said David Berliner with BDO.

Berliner believes most companies will invest in a stronger online presence and focus their physical storefront footprint at well-performing locations. Chapter 11 will allow most retailers to reorganize the business and do that.

So, it is likely that J Crew is just the beginning of the wave of retailers to file for bankruptcy, although we may not see too many doing so until all states reopen and social distancing restrictions are relaxed.

“Normally, you liquidate your inventory in some stores to benefit and provide liquidity for the other stores to continue. That can’t work right now because there is just no opportunity to do that,” said Berliner. “You can’t really do a going out of business sale online, at least no one has tried it the same way, so I think that is also partially holding them back.”

Berliner, Stein and most experts agree, retail was overbuilt in this U.S. already and mass closures of brick and mortar stores were going to happen. However, the volume of closures we’ll see in 2020 would’ve likely happened over several years. COVID-19’s impact has been speeding up those closures. It will also be linked to a domino effect caused by all the closures.

“We are going to have a phenomenon where certain malls are going to be weakened, because they may lose their anchors and some other stores,” said Berliner. “So certain retailers that were planning to stay open in certain locations may decide not to because that mall is now too weak.”

Surging shopper demand coupled with shipping container shortages and bottlenecks at ports has already triggered a tighter supply of products, from cars to shoes.

In particular, some of America's biggest sellers of clothing and shoes cite one catalyst that has compounded the pressure: factory closures in Vietnam stemming from a second wave of the coronavirus outbreak there. That's led brands from PacSun to Nike to warn about the effects on their supply.

In late December, Nike cut its full-year sales outlook due to supply chain issues, despite its CEO noting strong consumer demand.

Nike makes about three-quarters of its shoes in Southeast Asia, with 51% and 24% of manufacturing in Vietnam and Indonesia respectively.

But as the Vietnam government-imposed pandemic-related restrictions, including a mandatory shutdown of factories for several weeks from July into September, Nike said it incurred 10 weeks of lost production.

Even when factories start to reopen, which the company expects to happen in phases beginning in October, ramping up to full production could take several months, Nike's chief financial officer Matthew Friend said in a recent earnings call. Half of Nike's clothing factories in Vietnam are currently closed, company executives said during that call.

Vietnam accounts for a third of sports brand Under Armour's footwear and clothing production. Under Armour's CEO Patrik Frisk said during its most recent earnings call in August that it was closely monitoring the impact of factory shutdowns there on its supply chain there, calling it a "developing situation."

Ugg, Coach and Michael Kors have exposure

Vietnam is a crucial supplier to the U.S. in particular for apparel and footwear.

"It's a very big partner of the United States. It's our second-largest source of apparel and footwear," said Steve Lamar, president and CEO of the American Apparel and Footwear Association, an industry group. China is the largest supplier of clothing and shoes, according to the AAFA.

In July, Vietnam was caught in the throes of a coronavirus outbreak caused by a suspected new variant of the virus, which Vietnam's health minister said led to a fast spread of new infections in the nation's industrial zones.

The government subsequently imposed strict lockdowns and temporarily shut factories there until mid-August, then extended it into September. Some factories are still closed.

All of this means that production for everything from sneakers and sandals to jeans, dresses, T-shirts, jackets and more are stalled.

In a research note last month, BITG analyst Camilo Lyon said athletic footwear brands such as Nike and Adidas are most at risk of having serious supply chain disruptions because "Vietnam has served as a strong manufacturing alternative to China in recent years."

Other brands that have significant manufacturing exposure to Vietnam, he said, include Ugg maker Deckers Outdoor, Columbia Sportswear, Coach parent Tapestry and Capri Holdings (which owns the Michael Kors brand).

Lyon estimates it may take five to six months for factories in Vietnam to be back up and running normally when the lockdown ends. And whenever they do come back online, he anticipates another issue: staffing.

"Vietnamese factories will also likely have trouble getting workers to come back to work post-lockdown," he said.

Teen retailer PacSun is expecting an impact on the holiday season.

Brieane Olson, president of PacSun, said in an interview in August with CNNBusiness that about 10% of its goods are sourced from Vietnam.

Olson said the retailer was already dealing with a two-to-four-week delay for its back-to-school inventory this year because of the ongoing global supply chain delays.

Now, she said, new products for the winter and holiday season are likely to also face another four-week delay, she said, making it a challenge to get new fashions and styles in jeans, tops, sweaters and sweatshirts into stores in a timely manner.

And there's an additional effect on the consumer, Olson said: Having less product means the retailer will pull back on discounts "because there is no need for it," she said.