Unless you’re a giant like Costco or Walmart, it’s not an easy time to be in the retail industry.
Retailers have faced their share of challenges since the pandemic took hold in 2020. From stay-at-home orders to supply-chain backlogs, it’s been hard for retailers to operate in an efficient and profitable manner.
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Lingering inflation hasn’t helped retailers, either.
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Many consumers have changed their shopping and spending habits in the wake of what seems like permanently elevated living costs. Now, people are being forced to spend less on discretionary purchases so they can make sure their basic needs are met.
That’s put many retailers in a tough spot. And it’s also led to a series of not just store closures, but also retail bankruptcies.
From Express to Party City to Joann, retailers have been filing for Chapter 11 protection in short order due to sluggish sales and other challenges. And if this pattern continues, more stores could end up closing their doors.
Giant retail store closure leaves consumers shocked.
Image source: Getty Images
Department stores have not been spared
Department stores tend to attract customers because they do a good job of offering a range of products under one roof. Many department stores also serve as mall anchors, which means consumers have easy access to them when they’re doing other shopping.
But in recent years, a number of major department stores have moved forward with store closures.
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Macy’s announced early last year that it intends to shutter 150 underproductive stores by 2026. The goal is to have the company return to sustainable profits.
Meanwhile, earlier this year, Kohl’s announced that it would close 27 underperforming locations.
At the start of April, Kohl’s made good on that plan. The retail giant also said that more closures may be in its future, depending on performance.
A popular department store is saying goodbye
On April 23, Saks Global announced that it will be closing its iconic Saks Fifth Avenue store in San Francisco’s Union Square on May 10. The closure comes less than a year after the store decided to switch to an appointment-only format.
Saks said that company hopes to continue serving Bay Area customers through its other subsidiaries, which include Neiman Marcus San Francisco and The Fifth Avenue Club Palo Alto.
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The Union Square Alliance said the move on Saks’ part was not unexpected.
“While the closing of Saks marks the end of an era, this was not an unforeseen development, considering their recent changes to an appointment-only model, and Neiman Marcus acquisition. We expect the path to downtown revitalization to have its twists and turns — still, we are extremely optimistic about the future of Union Square,” the organization said in a statement.
Even though the move was anticipated, the closure of Saks is a major blow for a city that seems to be deep in the throes of a retail exodus.
Earlier this year, Macy’s-owned Bloomingdale’s announced plans to close its Union Square store. That marked the last remaining Bloomingdale’s location within city limits.
Prior to the Bloomingdale’s closure, San Francisco had also lost major retailers such as Nordstrom, Whole Foods, and Old Navy.
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An uptick in remote work has cost San Francisco retailers a world of foot traffic. With fewer people commuting into the city, retailers have struggled to stay afloat.
Crime-related concerns have also prompted many brands to pull out of the city.
Still, the news isn’t all bleak, as a number of popular stores are expected to open in the city in the coming year. A Nintendo store is slated for May, and Zara has a four-story flagship store in the works.
The Union Square Alliance has also been hosting special events in an attempt to lure both shoppers and retailers back to the area.
