Cities across the United States will begin reopening sooner or later and their streets will be returning to life. But it’s increasingly unlikely that all the country’s department stores will, or if they do manage the trick, it may not be for long. They were once the most powerful retail format out there, but after years of diminishing returns as online sales channels grew in power, they suddenly appear extremely fragile and unlikely to survive their fight with COVID-19. It’s the subject of an in-depth article in the New York Times, who quotes the director of retail studies at Columbia University’s Business School. “The department stores, which have been failing slowly for a very long time, really don’t get over this,” he told the paper. “The genre is toast, and looking at the other side of this, there are very few who are likely to survive.”
That’s as bleak an outlook as they come, but the evidence is all to clear to see. The company Green Street Advisors, which tracks retail statistics across the country, fond that department store chains occupy around 30 percent of all leasable area in shopping malls. It’s written that half of all departments stores are likely to close in the next five years. The NYT reports that Macy’s had invested heavily into creating online apps, websites and in-store exchanges, but that after closing its stores for two weeks, it had lost “the majority” of its sales. The list of troubled stores goes on. Lord & Taylor’s entire executive team has been fired effective immediately and stopped all payments of goods to vendors for the next three months. Macy’s was dropped from the S&P 500 a month ago. J.C. Penney is looking at strategies for restructuring, according to the Times, while Neiman stopped accepting new merchandise and put many of its 14,000 employees on furlough. Whether the strongest can at least survive without severe damage will depend in large part on how much longer they’re forced to remain closed.
