Is Saks’ Collapse Another Omen For Traditional Department Stores?

Saks’ trip to bankruptcy court has led to diatribes on the sad state of department stores, but a few other articles point to brighter days ahead for the channel.

In a New York Times article entitled “Can Department Stores Ever Be Fun Again?” Ginia Bellafante, the newspaper’s fashion critic, traces a first signal of department stores’ descent to the closing of B. Altman on Fifth Avenue in 1989,  followed in New York City by the closure of Henri Bendel, Lord & Taylor and Barneys.

Beyond pressures from mass retailers and online selling, she argues that department stores’ problems over the last five decades come about as the shopping experience no longer inspires. Product offerings have become “lackluster” due in part to lost buying talent, as “ambitious young women with great taste” in the latter part of the 20^th century began pursuing MBA programs over retail careers. Banners also lost their “identity” over the years, and now collectively embrace a “sterilized atmosphere” in carrying the same products as rivals, she added.

Bellafante wrote, “If you are in your 20s, department stores have been dying ostensibly for the whole of the time you have been conscious.”

In an article for the New York Post, veteran real estate reporter Steve Cuozzo said the Saks’ bankruptcy represents “the latest warning flag about a kind of retail business that a million fancy boutiques can’t replace: department stores, which are a civilizing and democratizing influence on urban life.”

Department stores, he writes, once conveyed “abundance, variety and prosperity,” remembering his childhood days discovering Lionel and American Flyer trains at an Abraham & Straus (A&S) in Brooklyn.

Department Stores Face Multiple Angles of Attack

In recent years, department stores have been pressured from online selling and skyrocketing real-estate prices in New York City. However, he still believes they represent a more “inclusionary” experience for everyday shoppers versus the “exclusionary” environments pushed by luxury brand flagships.

Cuozzo wrote, “No uniformed guards stand in door fronts to scare off shoppers whose looks they don’t like, as they do at stuffy boutiques on Madison Avenue and East 57th Street. Bathrooms are open to everyone.”

On the positive side, Phil Wahba, Fortune’s retail reporter, in a recent article stated that department stores are seeing “new signs of life” -- with Macy’s, Bloomingdale’s, Dillard’s, Nordstrom, and Belk finding growth, and J.C. Penney and Kohl’s showing signs of stabilization. Following closures of unproductive locations for many, the improving trends generally reflect a refocus on fundamentals.

Wahba wrote, “The path that department stores are taking back into shoppers’ favor is a return to what made them popular in the first place: well-maintained and attractive spaces with attentive staff, a well-chosen selection of products, and enticing new brands.”

Dave Moin, veteran retail reporter for WWD, similarly wrote that beyond Saks, department store chains in the U.S. have “now stabilized” and should deliver “modest growth” this year, similar to 2025.

He said the channel is benefiting from improved inventory management, less discounting and elevated product curation with private labels providing differentiation. Moin writes, “While not seeing the level of gains that mass merchants and off-pricers have been enjoying, department stores — there are just a handful of remaining nameplates after decades of consolidation — are maintaining their ground.”