2020 brought the actual, definitive, final end of department store dominance

Many of the biggest department store names shut down or went bankrupt, and the few that remain face a market that has shifted to e-commerce.

What happened

This story is part of Endgames, a Digiday Media editorial package focused on what’s next, what’s coming, and what’s being phased out in the industries we cover. Access the rest of our Endgames coverage here; to read Digiday’s Endgames coverage, click here; Modern Retail’s coverage is available here.

Why it matters

It feels like department stores have died a thousand deaths over the last five years. Numerous publications, including Glossy, have written stories heralding the end of department stores’ influence, based on a slew of factors like their slow adoption of e-commerce and fashion brands’ increased focus on their direct-to-consumer business.

But 2020 might have finally spelled the actual, definitive end of department stores. Many of the biggest names have shut down or gone bankrupt in the last year, and the few that are left are facing a market that has accelerated the shift to e-commerce and DTC, which has forced them to close stores. Neiman Marcus emerged from bankruptcy in September with 3,000 fewer employees and seven fewer stores, and Lord & Taylor is in the process of liquidating all its stores and will become an online only business under new management. Meanwhile JCPenney was bought by Simon Property Group and Brookfield Asset Management in early December, after going bankrupt in the spring and closing 150 stores.

Barneys New York and Henri Bendel were early casualties, pre-pandemic. Henri Bendel has disappeared completely, while the Barneys brand name has been licensed to Saks Fifth Avenue by owner Authentic Brands Group. Of the department stores still standing, Saks CEO Marc Metrick said in September that Saks’ luxury and online sales are soaring (though the company hasn’t released numbers since 2019). Meanwhile, Nordstrom has stayed afloat thanks to prioritizing its online sales, which increased from 33-54% of the business from 2019-2020. It’s also leaned on the success of its off-price retailer, Nordstrom Rack; CEO Erik Nordstrom said in November that the retailer would be a major driving force in Nordstrom’s recovery.

This news brief is based on reporting published by Glossy on 2020-12-30. The original report is linked below.