December 30, 2025
ElectricEgg/Depositphotos.com
Which 2025 Retail Exit Leaves the Largest Gap?
In a brief report summarizing some of the most major retail exits of the past year, CNN writer Jordan Valinsky detailed the reasoning behind the moves while also provoking further questions tied to what comes next.
“Slumping consumer sentiment, poor finances and years of shifting shopping habits have left some of these aging chains in a lurch. Some are headed down a path to bankruptcy as Americans dial back on discretionary purchases as inflation remains a stubborn problem,” Valinsky wrote, noting that 8,200 retail locations had shuttered in 2025, a statistic ~12% higher than the number recorded in 2024.
Forever 21, Joann, Party City, and Rite Aid Among List of Retailers Leaving the Market in 2025
Up first was Forever 21, a once-favored fast fashion mainstay in the retail space. Forever 21 filed for bankruptcy, the second time it had done so, in March and folded its stateside business, closing approximately 500 stores. The company underscored the challenging macroeconomic environment, in addition to aggressive competition from rising stars in the same segment — namely Shein, and to some extent, Temu — for its misfortunes. Tariffs also played a key factor in Forever 21’s exit, according to Valinsky, who noted that the retailer’s supply chain was impacted by President Trump’s trade policies.
Joann was next on the list, with the once-beloved crafts and fabric retailer closing out over 80 years of business as of February after also seeking a second Chapter 11 filing within the span of a single year. As RetailWire covered in January as Joann was initiating the sale process, then-interim CEO Michael Prendergast spoke of the difficulties the company was confronted with, despite executing on top- and bottom-line goals.
“However, the last several years have presented significant and lasting challenges in the retail environment, which, coupled with our current financial position and constrained inventory levels, forced us to take this step,” Prendergast said at the time. Michaels would end up buying Joann, promising to bring the most popular portions of the Joann experience to its own stores.
The party was also over for Party City, ending its lengthy 40 years of operations in February after a winding down period initiated a year prior. Crowded out by competitors on all sides, from various online retailers and pop-up concepts (notably, Spirit Halloween and the emerging Spirit Christmas) to established players such as Walmart and Amazon, Valinsky pointed out that the debt-laden company had previously filed for bankruptcy in January of 2023.
A similar story was attached to Rite Aid, which emerged from bankruptcy in September 2024 after trimming about $2 billion in debt and closing 500 stores. Months later, despite having acquired $2.5 billion in funds to keep the ship afloat, Rite Aid’s store count continued to tumble as competitors — Valinsky highlighted CVS Pharmacy and Walgreens, in particular — snatched up its pharmacy operations.
This list is not exhaustive, as Hardware Retailing noted: Claire’s, Big Lots, and At Home are also staring down an uncertain future.
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Brad Halverson
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Recent Discussions
Discussion Questions
In your opinion, which 2025 retail exit leaves the largest gap (or opportunity)? Are there any other major retailers closing shop that could present opportunities to competitors?
Which retailers do you envision shutting down operations in 2026? What is the cause of their demise?
Poll
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Arguably Rite Aid leaves the biggest gap. Why? Because its stores served many rural communities, including for essential services like prescriptions, where its absence will now be felt. Unlike some of the other players, Rite Aid did not fail due to lack of sales or usage – it failed because it had huge amounts of debt that could not be serviced. Some of its stores are also too small to convert to other uses, such as supermarkets.
In 2025 we’ve seen a notable extinction event in retail, where once-majestic brands have either dramatically downsized or exited entirely, reminding me of Dr. Ian Malcolm’s line:
“Life finds a way — but sometimes nature selects for extinction.”
Among the year’s most tangible gaps are the closures and significant footprint reductions at legacy department players — Macy’s is shuttering a substantial number of underperforming stores through 2026 as part of its turnaround strategy, and historic banners like Claire’s filed for bankruptcy and underwent widespread closures after years of declining traffic and relevance. The permanent dissolution of Forever 21’s U.S. stores this year — a brand that once defined mall culture — also leaves a conspicuous gap for teens and value-fashion shoppers who still want trend styles but aren’t fully served by fast fashion or digitally native rivals. These exits create openings for competitors who can combine compelling value, relevance, and omnichannel execution with fewer legacy burdens.
Looking ahead to 2026, the selection pressures of shifting consumer habits and uneven operating models will likely narrow the pack even further. Retailers with high fixed-cost real estate, weak digital ecosystems, or declining foot traffic will be most vulnerable, particularly if they lack a clear differentiation or strong loyalty engine. Already announced closures through 2026 include continued pruning by Macy’s, additional rationalization by Carter’s and Kroger, and further downsizing by brands like REI and Saks Off 5th — all indicators that portfolio optimization and structural repositioning are ongoing. In contrast, brands that evolve their formats, connect digital and physical experiences, and meet customers where they are will be the ones that thrive — the evolutionary “survivors” in a market where consumers increasingly favor relevance and convenience over nostalgic loyalty.
In summary, the freshest opportunities from 2025’s exits aren’t just what closed but why they closed — giving savvy competitors a chance to capture unmet demand and modernize how they serve customers. And just as in Jurassic Park, in retail, the strongest do not always survive — but the most adaptable do.
Just on semantics, I think Joann will be the biggest gap, since it was the most unique on the list. But on day-to-day basis Rite Aid will be most missed: even if you didn’t shop there – and (too) many didn’t! – the spectre of empty stores is as haunting as longer lines at competitors is annoying.
Among the most impactful of closures and exits is Rite Aid, including the retail pharmacy independent they purchased a few years ago, Bartell Drugs, beloved in the Pacific Northwest market for over 100 years. Many of these communities will now have few to no pharmacy options, from longer distances, and likely higher prices as a result. Rite Aid literally could not get out from under how much debt they were saddled with, and how much damage was caused with brands, CPG’s and suppliers in the process. The whole thing is disappointing.
From my perspective, Big Lots represents a big missed opportunities in 2025. I was closely involved right up until the final days before Variety Wholesalers took over the brand name, and what stood out was that demand for value never disappeared. In an inflation-heavy environment where every dollar matters, a discount retailer should have been well positioned to win traffic and loyalty. The issue was less about customer need.
Competitors like Ollie’s Bargain Outlet clearly saw the opportunity, selectively acquiring store locations and leveraging strong geographic footprints with a sharper value message. That move alone shows the gap Big Lots left behind was real and actionable.
Looking ahead to 2026, I expect more mid-tier retailers to struggle, especially those that sit uncomfortably between discount and premium. The common thread will not just be pricing pressure, but a failure to use technology to guide smarter purchasing decisions. Retailers that do not invest in personalization, inventory intelligence, and localized assortments will continue to lose relevance. Value alone is not enough anymore, but value paired with clarity and convenience still wins.
I agree with several of my colleagues above. Rite Aid will be missed because it provided a critical service. The others really don’t matter. If they had products with viable demand, other retailers would pick them up. If not, no one will care.
When I discussed strategy with my classes, we often looked at many companies that don’t adapt to the times. My favorite example is Sears. (Down to five stores).. I explain it to them and show them photos of the Sears catalogue, the massive mail-order catalogue that people waited for anxiously. It offered everything from apparel to electronics to tools (even pre-fabricated houses). I would ask the students, “What company does this make you think of today? “The answer would come quickly. Amazon!
Then the discussion leads to the question, “Why didn’t Sears become Amazon?”
“Why didn’t Sears become Amazon?”
And what answer do your students come up with? (My quick take is that their shareholders wouldn’t have tolerated the large losses that [almost certainly] would have developed in the early years of setting up an online model similar to what Amazon developed…Amazon can thank very patient investors for its success!)
I can’t tell you how many times I’ve said to my kids that Sears was the original Amazon. Whatever you needed, Sears likely had it, and at a reasonable price. The catalog would sit at home on a convenient shelf, ready for exploring or placing a phone order.
I could argue that none of the exits leave a gap. The gap existed while the exiting retailers struggled for relevance. They were undeserving the market. Their lack of performance was leaving a gap that the market filled. Forever 21 left a value/convenience gap that Shein and Temu identified, and filled…with brutal speed and efficiency. Nature abhors a vacuum.
The largest gaps are usually not about how many stores closed. They come from the loss of retailers that played a steady role in everyday life and solved specific, practical needs. When those businesses disappear, customers feel the disruption quickly because the replacement is not always obvious or convenient.
Most exits follow a familiar pattern. Costs rise, demand softens, and the business model does not adjust fast enough. The opportunity now sits with retailers that stay focused on clarity, discipline, and execution. Looking into 2026, the greatest risk will be for businesses that carry too much complexity, hold the wrong inventory, or lack a clear reason for customers to choose them.
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Arguably Rite Aid leaves the biggest gap. Why? Because its stores served many rural communities, including for essential services like prescriptions, where its absence will now be felt. Unlike some of the other players, Rite Aid did not fail due to lack of sales or usage – it failed because it had huge amounts of debt that could not be serviced. Some of its stores are also too small to convert to other uses, such as supermarkets.
In 2025 we’ve seen a notable extinction event in retail, where once-majestic brands have either dramatically downsized or exited entirely, reminding me of Dr. Ian Malcolm’s line:
“Life finds a way — but sometimes nature selects for extinction.”
Among the year’s most tangible gaps are the closures and significant footprint reductions at legacy department players — Macy’s is shuttering a substantial number of underperforming stores through 2026 as part of its turnaround strategy, and historic banners like Claire’s filed for bankruptcy and underwent widespread closures after years of declining traffic and relevance. The permanent dissolution of Forever 21’s U.S. stores this year — a brand that once defined mall culture — also leaves a conspicuous gap for teens and value-fashion shoppers who still want trend styles but aren’t fully served by fast fashion or digitally native rivals. These exits create openings for competitors who can combine compelling value, relevance, and omnichannel execution with fewer legacy burdens.
Looking ahead to 2026, the selection pressures of shifting consumer habits and uneven operating models will likely narrow the pack even further. Retailers with high fixed-cost real estate, weak digital ecosystems, or declining foot traffic will be most vulnerable, particularly if they lack a clear differentiation or strong loyalty engine. Already announced closures through 2026 include continued pruning by Macy’s, additional rationalization by Carter’s and Kroger, and further downsizing by brands like REI and Saks Off 5th — all indicators that portfolio optimization and structural repositioning are ongoing. In contrast, brands that evolve their formats, connect digital and physical experiences, and meet customers where they are will be the ones that thrive — the evolutionary “survivors” in a market where consumers increasingly favor relevance and convenience over nostalgic loyalty.
In summary, the freshest opportunities from 2025’s exits aren’t just what closed but why they closed — giving savvy competitors a chance to capture unmet demand and modernize how they serve customers. And just as in Jurassic Park, in retail, the strongest do not always survive — but the most adaptable do.
Just on semantics, I think Joann will be the biggest gap, since it was the most unique on the list. But on day-to-day basis Rite Aid will be most missed: even if you didn’t shop there – and (too) many didn’t! – the spectre of empty stores is as haunting as longer lines at competitors is annoying.
Among the most impactful of closures and exits is Rite Aid, including the retail pharmacy independent they purchased a few years ago, Bartell Drugs, beloved in the Pacific Northwest market for over 100 years. Many of these communities will now have few to no pharmacy options, from longer distances, and likely higher prices as a result. Rite Aid literally could not get out from under how much debt they were saddled with, and how much damage was caused with brands, CPG’s and suppliers in the process. The whole thing is disappointing.
From my perspective, Big Lots represents a big missed opportunities in 2025. I was closely involved right up until the final days before Variety Wholesalers took over the brand name, and what stood out was that demand for value never disappeared. In an inflation-heavy environment where every dollar matters, a discount retailer should have been well positioned to win traffic and loyalty. The issue was less about customer need.
Competitors like Ollie’s Bargain Outlet clearly saw the opportunity, selectively acquiring store locations and leveraging strong geographic footprints with a sharper value message. That move alone shows the gap Big Lots left behind was real and actionable.
Looking ahead to 2026, I expect more mid-tier retailers to struggle, especially those that sit uncomfortably between discount and premium. The common thread will not just be pricing pressure, but a failure to use technology to guide smarter purchasing decisions. Retailers that do not invest in personalization, inventory intelligence, and localized assortments will continue to lose relevance. Value alone is not enough anymore, but value paired with clarity and convenience still wins.
I agree with several of my colleagues above. Rite Aid will be missed because it provided a critical service. The others really don’t matter. If they had products with viable demand, other retailers would pick them up. If not, no one will care.
When I discussed strategy with my classes, we often looked at many companies that don’t adapt to the times. My favorite example is Sears. (Down to five stores).. I explain it to them and show them photos of the Sears catalogue, the massive mail-order catalogue that people waited for anxiously. It offered everything from apparel to electronics to tools (even pre-fabricated houses). I would ask the students, “What company does this make you think of today? “The answer would come quickly. Amazon!
Then the discussion leads to the question, “Why didn’t Sears become Amazon?”
And what answer do your students come up with? (My quick take is that their shareholders wouldn’t have tolerated the large losses that [almost certainly] would have developed in the early years of setting up an online model similar to what Amazon developed…Amazon can thank very patient investors for its success!)
I can’t tell you how many times I’ve said to my kids that Sears was the original Amazon. Whatever you needed, Sears likely had it, and at a reasonable price. The catalog would sit at home on a convenient shelf, ready for exploring or placing a phone order.
I could argue that none of the exits leave a gap. The gap existed while the exiting retailers struggled for relevance. They were undeserving the market. Their lack of performance was leaving a gap that the market filled. Forever 21 left a value/convenience gap that Shein and Temu identified, and filled…with brutal speed and efficiency. Nature abhors a vacuum.
The largest gaps are usually not about how many stores closed. They come from the loss of retailers that played a steady role in everyday life and solved specific, practical needs. When those businesses disappear, customers feel the disruption quickly because the replacement is not always obvious or convenient.
Most exits follow a familiar pattern. Costs rise, demand softens, and the business model does not adjust fast enough. The opportunity now sits with retailers that stay focused on clarity, discipline, and execution. Looking into 2026, the greatest risk will be for businesses that carry too much complexity, hold the wrong inventory, or lack a clear reason for customers to choose them.