What’s the Story?

The Covid-19 pandemic has been catastrophic for discretionary retail in the US, and department stores have been among the most impacted sectors. Some department store chains have filed for bankruptcy and announced a number of store closures, while others are opting to slim down store estates for an altered future. In this report, we map where these closures have transpired or are set to transpire. We cover the major department stores that have filed for Chapter 11 bankruptcy this year—JCPenney, Lord & Taylor, Neiman Marcus, Stage Stores and Stein Mart—as well as closures announced by Century 21, Macy’s, Nordstrom and Sears. Our data cover a total of 1,342 closed or closing department stores for which addresses have been identified. The vast majority of these closures pertain to 2020.

Why It Matters

Here is why the location of department store closures will have a notable bearing for the retail industry:

• Closures may represent an opportunity for strong rivals—including off-price retailers or other department store competitors—to gain market share. Major department stores compete at various tiers of the market, so shoppers will switch to very different types of alternatives should their regular department store close.
• Department store closures will present a challenge for mall owners in the affected locations to find replacement tenants to occupy the vacant space—and may lead to reduced shopper traffic for surrounding stores.

Neiman Marcus Represents the First Major Casualty

Neiman Marcus filed for Chapter 11 bankruptcy on May 7, 2020. The company had 43 department stores at the time of filing, and has so far announced 24 store closures, including 17 Last Call Studio stores and seven Neiman Marcus full-line stores. As can be seen in the map below, Texas (five closures), Florida (four), New York (three) and California (three) have together accounted for more than 60% of the total closures so far. [caption id="attachment_116543" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]  

Stage Stores Follows Suit Soon After

Stage Stores filed for Chapter 11 bankruptcy protection on May 10, 2020 and announced plans to liquidate its business. In August, the company received court approval to proceed with its bankruptcy plan, under which the company planned to wind down and liquidate all of its 738 stores. We can see in the map below that Texas (186 closures), where the company is headquartered and had one-quarter of its store base, is the most affected state. The map shows the locations of the 726 stores for which the company has provided closure details, including both Gordmans and Stage Stores banners. [caption id="attachment_116544" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]  

JCPenney Becomes the Third Major Department Store Chain Casualty in May

JCPenney filed a voluntary reorganization petition under Chapter 11 bankruptcy protection on May 15, 2020. The company announced that it will close 242 stores—192 in fiscal year 2020, ending January 30, 2021, and 50 by the end of the second quarter of fiscal year 2021, ending July 31, 2022. Of the total closures, we map out the 156 stores that the company has confirmed will close, with Florida, Indiana, New York and Ohio closing the highest number of stores, at nine each. [caption id="attachment_116545" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]  

Lord & Taylor Files for Bankruptcy in August

Lord & Taylor filed for Chapter 11 bankruptcy protection on August 2, 2020, and the company commenced a search for a buyer. Initially, the company had plans to close around 24 of its 38 stores and keep 14 stores open, but by the end of August, Lord & Taylor confirmed that it will close all stores. As can be seen in the map below, New York (10 closures) and New Jersey (nine closures) together account for half of the company’s total closures. [caption id="attachment_116546" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]  

Stein Mart Follows Soon After

Stein Mart filed for Chapter 11 bankruptcy protection on August 12, 2020, and the company confirmed that it will permanently close all of its 279 stores. Florida (44 closures), Texas (41), California (25) and North Carolina (20) together account for almost half of the total announced closures. [caption id="attachment_116547" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]  

Century 21 Becomes the Latest Casualty

Discount department store chain Century 21 filed for bankruptcy on September 10, 2020 and announced that it will liquidate all its remaining 13 stores. The company had already closed two stores prior to filing for bankruptcy. New York (nine closures) accounts for 60% of the total closures. [caption id="attachment_116548" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]   While the six companies covered above have all filed for bankruptcy, other leading department store chains are also closing stores this year; we list these below.

Macy’s Is Closing More than 100 Stores over Three Years

Macy’s announced in February this year that it will close 125 stores (around 20% of its store fleet of 613 stores) over three years. The company disclosed an initial list of 31 stores that are confirmed to close this year, and we map these below. Florida (four closures), Ohio (three) and Washington (three) together account for one-third of the total closures from the confirmed list. [caption id="attachment_116549" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]  

Nordstrom Is Closing 16 Stores

Nordstrom announced in May that it will close 16 stores (around 14% of its store fleet of 116 stores). From the list of stores that the company confirmed would close permanently, we note that California (six closures) accounts for over one-third of the total closures. [caption id="attachment_116550" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]  

Sears Continues To Close Stores

Sears announced in November 2019 that it would close 51 Sears stores by early February 2020. A company spokesperson subsequently confirmed that all these closures would be completed by mid-February. The company then closed six more stores, according to Business Insider. Of the total confirmed store closures, one-third have been in California (19 closures). [caption id="attachment_116551" align="aligncenter" width="700"] The map includes stores that closed from November 2019 onwards.
Source: Company reports/Coresight Research[/caption]

Overall, Texas Accounts for the Highest Number of Department Store Closures

In the map below, which depicts the overall store closures of all major department store chains that have been announced year to date, we can see that Texas is the most affected state, mainly owing to the significant presence that both Stage Stores and Stein Mart have in the state. [caption id="attachment_116552" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]