Department stores, once a middle-class mainstay of convenience and indulgence, had been spiraling downward long before the pandemic turbocharged online shopping and helped tip a number of big-name retailers into bankruptcy.
According to The Washington Post, nearly 200 department stores have disappeared in the past year alone, and another 800—or about half the country’s remaining mall-based locations—are expected to shutter by the end of 2025, according to commercial real estate firm Green Street.
Those closures, analysts say, will have a cascading effect on American shopping malls, which already are battling record-high vacancy rates and precipitous drops in foot traffic, as well as on the commercial real estate market and the broader economy.
“There’s nothing department stores have done to make themselves particularly relevant in the 21st century, and the pandemic has only made that more clear,” says Mark Cohen, director of retail studies at Columbia Business School and former chief executive of Sears Canada. “They have too many stores, too many things, too many brands. The customer who used to be handcuffed to their local department store is no longer tethered because they have an online alternative that’s become even more attractive in the last year.”
The pandemic set off an economic chain reaction that rippled through the country’s department store chains, forcing several into chapter 11 proceedings. Neiman Marcus, Stage Stores and J.C. Penney filed for bankruptcy last May, followed by Lord & Taylor and, most recently, Belk in February. Even companies on relatively stable footing, like Macy’s, are shuttering dozens of stores as they try to move away from traditional shopping malls. Overall sales at department stores plunged more than 40 percent at the beginning of the pandemic and have yet to make up for lost ground, according to Commerce Department data, as Americans do more of their shopping online and gravitate to specialty brands and discount chains. Read the full story.
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April 16, 2021 at 10:05PM
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800 more department stores in US expected to close in next five years - Greater Baton Rouge Business Report
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