After a series of high-profile department store closures, including the liquidation of Canadian retailer Hudson Bay, the retail sector braces for more shutdowns in 2026. Industry experts predict this trend could continue for years to come. In mid-January, Saks Global, which owns Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman, filed for bankruptcy, prompting speculation that several of their locations will close in the near future.
Department Store Closures Impact 2026 Retail Landscape
Macy’s, another key player in the department store sector, recently announced the closure of 14 locations as part of a broader downsizing strategy, ultimately resulting in the closure of 150 stores. Dillard’s also closed a store this month, adding to the growing list of closures in the industry. The trend of department store closures is expected to continue, particularly as these spaces, which have long been anchors in shopping malls, become vacant.
According to Green Street’s annual review, vacancies in mall anchor spaces—typically occupied by department stores—are expected to rise in the short term. Over the past 15 years, the decline of the department store model has contributed to the closure of at least 175 malls and the struggles of other locations, further cementing the challenges facing traditional retail spaces.
Current State of the Department Store Business Model
Despite these closures, department stores have shown resilience. Green Street Managing Director Vince Tibone noted that most department stores have remained profitable on a four-wall basis, despite flat or declining sales in recent years. The firm doesn’t expect a significant change unless a recession occurs.
Although the department store model has faced significant challenges, analysts see some hope for the future. “They’re still swimming upstream,” said Neil Saunders, Managing Director at GlobalData. “There are still problems with department stores, and I think the sector is going to continue to shrink over the next few years. But the hope is that we’re starting to see a leveling off, with a new sort of space emerging in which they can operate quite comfortably.”
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Department Stores Still Generate Significant Revenue
Despite their struggles, department stores continue to generate substantial revenue. Major chains like Saks Global, J.C. Penney, and Kohl’s reported billions in sales in their most recently reported quarters. Saks Global, for example, reached $1.6 billion, while J.C. Penney garnered $1.4 billion, and Kohl’s generated $3.4 billion in sales. Macy’s Inc. reported net sales of $4.7 billion in Q3, and Dillard’s earned $1.4 billion. Even Nordstrom, which went private last year, recorded $4.2 billion in net sales in Q4.
This topline revenue is one of the few remaining indicators of business size in the department store sector. As Simeon Siegel, senior managing director at Guggenheim, pointed out, revenue remains a key metric of success, despite the ongoing closures and challenges these companies face.
