American department stores,
once all-powerful shopping meccas that anchored malls and Main Streets
across the country, have been dealt blow after blow in the past decade.
J.C. Penney and Sears were upended by hedge funds. Macy’s has been
closing stores and cutting corporate staff. Barneys New York filed for bankruptcy last year.
But nothing compares to the shock the weakened industry has taken from the coronavirus pandemic. The sales of clothing and accessories fell by more than half
in March, a trend that is expected to only get worse in April. The
entire executive team at Lord & Taylor was let go this month.
Nordstrom has canceled orders and put off paying its vendors. The Neiman
Marcus Group, the most glittering of the American department store
chains, is expected to declare bankruptcy in the coming days, the first
major retailer felled during the current crisis.
It is not likely to be the last.
“The
department stores, which have been failing slowly for a very long time,
really don’t get over this,” said Mark A. Cohen, the director of retail
studies at Columbia University’s Business School. “The genre is toast
and looking at the other side of this, there are very few who are likely
to survive.”
At a time when retailers
should be putting in orders for the all-important holiday shopping
season, stores are furloughing tens of thousands of corporate and store
employees, hoarding cash and desperately planning how to survive this
crisis. The specter of mass default is being discussed not just behind
closed doors but in analysts’ future models. Whether that happens, no
one doubts that the upheaval caused by the pandemic will permanently
alter both the retail landscape and the relationships of brands with the
stores that sell them.
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