Iconic Department Stores That Are Going Under (And Who’s Already Failed)
A stroll through the mall proves how ugly it is in retail land. Once-popular stores lack customers as they advertise liquidation sales, preempting shutdowns. Even many established department stores that once dominated the industry can’t keep it together.
13. Lord & Taylor
- Years in business: 192
A telltale sign of a struggling store: When it sells its flagship location on Fifth Avenue in New York City. Unfortunately, that’s exactly what Lord & Taylor, which has been in business since 1826, did.
The client who moved into the space, WeWork, is a rental co-working office space venture that embodies modern trends. Retail is dead, and so are traditional work environments.
Next: A riches-to-rags tale of a Midwest chain
- Years in business: 164
Carson’s, a Midwest department store, has encountered hardship before. Founded in 1854 by Scottish immigrants, the former dry goods store lost 60% of its stock in the Great Chicago Fire. They survived bankruptcy in 1991, but couldn’t survive the downfall of malls.
In 2017, Carson’s missed its yearly sales targets by a mile, leaving them no option but to cut ties with underperforming stores. Its going-out-of-business sales lasted 12 weeks.
Next: This store needs to rely on the “magic of money.”
- Years in business: 159
Everything associated with the retail apocalypse has been hitting Macy’s where it hurts. E-retailers (cough, Amazon, cough) have forced the department store chain to close countless stores and admit to a 50% loss in shares throughout 2017.
Citi analyst Paul Lejuez says Macy’s “has seen significant pressure on sales/margins for several years, they no longer make much money as a retailer.” Only time will tell if Macy’s is truly down for the count.
Next: This store can’t bury its head in the sand.
- Years in business: 157
Bloomingdale’s parent company, Macy’s, may take down its high-end cousin during the battle of the shopping malls. Macy’s struggled through 2017, announcing multiple closures resulting in the loss of 5,000 jobs.
The 2018 holiday season will likely predict whether the retail giant will have to start closing Bloomingdale’s locations as well, in order to rescue its revenue and preserve its sales. The fate of Bloomingdale’s hangs in the balance.
Next: This department store could get “sacked.”
9. Saks Fifth Avenue
- Years in business: 151
Although Saks Fifth Avenue had positive sales at the end of 2017, it still squeaked by compared to successful, adaptable department stores. The Canada-based company hopes to encourage growth by acknowledging the decrease in mall traffic and increase in online sales.
However, Saks President Marc Metrick doesn’t want to use artificial intelligence in stores, something other chains are implementing. “We don’t need [it],” he said. “We have living, breathing, 4,500 style advisors in our stores.” This is a risky bet as shoppers turn to online retailers like Amazon.
Next: This giant may be in its last days.
- Years in business: 132
Things keep getting worse for Sears; 2017 wasn’t a banner year for the company, and it closed another 18 stores in January 2018.
As consumers flock to other options for household needs, Sears announced nine more closures. Liquidation sales at those California, Iowa, Illinois and Nevada locations began in April. This action coincides with Sears’ effort to pay into its $407 million underfunded pension plan.
Next: This department store is no “more than a feeling” now.
7. Boston Store
- Years in business: 121
This Wisconsin-based store felt Amazon’s pressure. Now it must admit defeat as it recently filed for bankruptcy. “The rise of e-commerce and the downfall of malls is largely to blame,” according to CNN. This is the future of retail.
Next: As of April 2018, this company is toast.
- Years in business: 120
In late 2017, head honchos at Bon-Ton Stores Inc. blamed the unseasonably warm weather for butchering their cold-weather apparel sales. But the changing landscape of e-commerce was an issue, too. All the problems came to a head in April 2018.
The chain applied for bankruptcy protection in February. When it didn’t find a buyer, Bon-Ton announced plans to close all 256 stores in 2018, which will affect its 23,000 employees across the country.
Next: Take advantage of this retailer’s liquidation sales.
- Years in business: 119
Kmart has been dying a slow death for years . Considering how grim Sears’ future looks, it’s no surprise Kmart’s destiny is following suit (it’s also owned by Sears Holdings). Early 2018 brought another round of shutdowns as the company trims the fat and “continue[s] to right size [its] store footprint in number and size.”
Thrifty customers will want to take advantage of liquidation sales, but foot traffic remains to be the store’s biggest issue. Who knows if bargain prices will help profits.
Next: Even high-end department stores can’t make enough money.
- Years in business: 117
Nordstrom hoped for a 2017 holiday miracle, but it didn’t happen. As Forbes said, “The Nordstrom family, wanting to ensure the survival of their family legacy company, sought to buy out the public shareholders.” Sadly they couldn’t agree about the value of public shares, so the company faces an uncertain future.
If Nordstrom became a private company, it could try new retail practices. Instead, the public company must use more consistent ways to earn, like the new Nordstrom Local, which offers free virtual style consultations.
Next: Can celebrities save this store?
- Years in business: 116
It’s been a rough year for JCPenney. Desperate attempts to introduce more “casual and contemporary” women’s wear have failed.
We’ll have to see if JCPenney’s makeup and home appliances divisions will spark life into the store, as it partners with Food Network’s Aisha Curry, Blackish‘s Tracee Ellis Ross, Olympic gymnast Laurie Hernandez, and reality TV show Project Runway.
Next: Another retail casualty creating more unemployed workers
2. Neiman Marcus
- Years in business: 110
Fitch Ratings added Neiman Marcus to its “loans of concern” watchlist in late 2017 due to its total outstanding loan balance of $2.8 billion.
Although CareerBliss reported the department store had the happiest employees in 2017, others report Neiman Marcus will fall out of favor with its workers if the company keeps closing stores. They already shut down 25% of outlet stores last year due to debt balances.
Next: Shoppers no longer “expect great things” from this retailer.
- Years in business: 55
Thanks to back-t0-school shoppers, a run on backpacks and pencils got the chain through the fall of 2017. Unfortunately, a 20% decline in sales was a tough pill to swallow — even as Kohl’s added Under Armour to the store’s offerings. The CEO blamed abnormal weather conditions for the slump in profits.
Do you miss these failed department stores?
The struggling department stores must look to the following department chains to learn what not to do. These once-loved stores thrived for decades before succumbing to mass firings and bankruptcy.
Next: A Chicago-based chain known for its holiday decor
1. Marshall Field’s
- Years in business: 150
Founded in 1852, this Chicago landmark was the second-largest department store in the world. Shoppers loved the festive holiday decor in Marshall Field’s windows around the country, and people still enjoy the brand’s Frango mints, which live on through Macy’s, its flagship brand.
When the Marshall Field’s name changed to Macy’s in 2006, customers protested. Not a traditional closure, Marshall Field’s wasn’t equipped to last. Many Chicagoans still reminisce about this department store’s historic presence in the Windy City.
Next: This Maryland chain bit the dust after a buyout.
2. Hecht’s Department Stores
- Years in business: 143
It seems like Macy’s bought many of its competitors in the 2000s, and Hecht’s Department Stores is one of them. By 2005, Baltimore-based Hecht’s had over 80 stores in eight states (including its Strawbridges operation). But once Macy’s got hold of Hecht’s, it was history. Loyal shoppers watched the chain either convert to Macy’s or close altogether. The Hecht’s brand, established in 1857, quietly disappeared.
Next: Donald Trump got involved in this department store’s demise.
3. Bonwit Teller
- Years in business: 95
The Trump Tower now resides where Bonwit Teller’s flagship location once stood. Founded in 1895, the luxury department store sold quality wares to Manhattan shoppers for 84 years before it succumbed to financial woes in 1979. That’s when Donald Trump swooped in and purchased the flagship property for his newest real-estate venture. By 1990, the rest of Bonwit Teller was liquidated.
You probably shop at these thriving department stores
Amidst all the doom and gloom, a few department stores are bucking the trend. Here are four adaptable retailers with promising outlooks. They identified what needed to change to see continued success. We recommend relying on them for your shopping needs.
Next: There’s “something for everyone” at this growing discount store.
1. TJ Maxx
- Years in business: 42
With its low prices on high-end brands, TJ Maxx has managed to dodge all potential apocalyptic doom. It’s summer sales increased by 6%, despite many of its competitors admitting to significant loses. TJX Companies, owner of T.J. Maxx, Marshalls, and HomeGoods plans to open 1,300 new stores moving forward.
Next: Experts expect big things from this next store
2. Burlington Coat Factory
- Years in business: 46
One department store has something to say before experts give Amazon all the glory. Morgan Stanley anoints Burlington, previously known as Burlington Coat Factory, one if its top stock picks this holiday season. The popular department store has posted same-store sales growth of 8.9% over the last two years. Plus, Burlington has managed to increase consumer traffic in 10 out of the last 12 months in-store — causing competitors to go green with envy.
Next: Shoppers truly want to “dress for less.”
- Years in business: 36
This off-price apparel merchandiser is beloved by savvy consumers. Seeking Alpha credits the department store’s success to its ability to operate a no-frills store format that results in prices 20% to 60% below those of similar stores. Combine that with a strong rotating inventory selection and they’ve scored a customer base with a “buy now” mentality. Such growth could pose a serious threat to Amazon and other discount chains.
Next: A store that is expanding in secret
4. Von Maur
- Years in business: 146
This popular Midwest department store chain continues its quiet expansion while competitors implode. Now there are 35 stores spread across 15 states, including New York, Oklahoma, and Missouri. A thriving e-commerce model also helps keep them in the black year-round.
President Jim von Maur attributes success to their standards, suggesting quality merchandise at a fair price and providing great service never goes out of style out of style.
Follow Lauren on Twitter @la_hamer.
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