May Day: Department Store Survivors And Casualties After A Year Of Covid

Macy’s Herald Square flagship store quietly prepares for the upcoming holiday season on November 2, … [+] 2020.

Jordan Lisicky

It’s been a traumatic year for department stores. Battered and bruised by internet shopping and increased competition, many traditional retailers were well-compromised before Covid crippled the industry. Over the past year, there were some department stores that survived the pandemic’s challenges and others that became casualties and entered the retail graveyard.

By the third week of March 2020, quarantine guidelines forced traditional department stores to temporarily lock their doors. Only retailers that were deemed “essential” were allowed to remain open. These businesses sold necessities such as groceries, healthcare products, and home needs. Most department stores eliminated those “essential” categories decades ago.

Once quarantine restrictions relaxed, department stores slowly returned from their Covid closures. On May 3, 2020, several department stores, located in Texas and some southwestern states, became the first in the country to welcome back customers. However, it took until the end of June before most stores across the nation unlocked their doors.

It ended up being the family-owned or family-managed department stores that performed the best during the pandemic. But it was the ones that are owned by private equity firms that struggled the most. They were already challenged by years of debt and several of the biggest names were forced into bankruptcy court.

Nordstrom’s midtown Manhattan flagship store, as seen on April 3, 2021, was barely open for six … [+] months before it was temporarily closed from Covid restrictions..

Michael Lisicky

Nordstrom, under the leadership of several Nordstrom family members, spent the past several years investing in and updating its online platform. After Covid forced their brick-and-mortar stores to temporarily close, the company successfully transferred a significant amount of business to its enhanced e-commerce operation. By the end of 2020, Nordstrom reported that 54% of its revenue came from internet purchases.

Dillard’s, also led by its founding family, maneuvered the pandemic by staying out of the headlines. Even though its fleet of traditional department stores experienced a significant decline in sales, Dillard’s financial situation has continued to improve, especially in recent months. In addition, many Dillard’s were located in parts of the country that endured minimal Covid store closure periods. 

Von Maur, the Iowa-based fashion department store, is another retailer that performed admirably during the pandemic. As a private family-owned fashion department store company, Von Maur didn’t have the pressure of shareholders or creditors. The retailer’s commitment to slow and measured expansion plan didn’t overburden the firm. As other stores have cut back and closed unprofitable locations, Von Maur hasn’t abandoned any of its previously-announced expansion plans.

Boscov’s White Marsh, Maryland store, as shown on July 18, 2020, posts large safety protocol signs … [+] at its mall entrance.

Michael Lisicky

The same is true at Boscov’s, a Pennsylvania-based, family-owned department store chain. Several years ago, Boscov’s stumbled and learned that an overly-aggressive expansion is one way to land in bankruptcy court. Boscov’s now grows slowly, steadily, and successfully.

Boscov’s is also one of the few department stores that still carries an old-fashioned full range of merchandise, from cosmetics to garden tools. For many its loyal customers, Boscov’s is an essential business.

Lord & Taylor’s demise dominated retail headlines during the past year. The 194-year old retailer was in dire straits, with barely any cash in hand, when Covid forced its doors to initially shut. However, at the end of March 2020, reports emerged that the beleaguered retailer had dismissed the majority of its executive team and was down to a skeletal crew. 

An interior image of the Lord & Taylor Washington-Chevy Chase store on February 27, 2021, the … [+] company’s final day of operation after 194 years.

Michael Lisicky

Lord & Taylor’s future also seemed especially grim when it deactivated its social media accounts. By April, the employees and landlords grew concerned as Lord & Taylor’s remaining leadership seemingly went AWOL.

When Lord & Taylor reopened two of its 38 locations on May 11, it appeared that the retailer was back in business. However, Lord & Taylor moved slowly and didn’t reopen all stores until mid July.

The return was short-lived. On August 3, Lord & Taylor surprised customers and employees with newly-posted “Store Closing Signs” at half of its locations. Later that day, the company filed for bankruptcy. The retailer told the court that it hoped to find a buyer who would take over the remaining stores, along with the brand. Three weeks later, Lord & Taylor threw in the towel. After a 194-year run, all Lord & Taylor stores closed at the end of February. 

Lord & Taylor’s name will continue as an internet brand, as the company’s intellectual property was purchased at its bankruptcy auction by a digital retail investment firm.

A closed Century 21 department store on New York’s Upper West Side is shown on March 3, 2021.

Michael Lisicky

The closure of the Century 21 department store chain was a huge loss for many New Yorkers. A retail destination for locals and international visitors, Century 21 became severely crippled when Manhattan’s office buildings turned dark and its tourism industry evaporated. 

Known for designer merchandise at discounted prices, Century 21’s flagship store was located directly across from the World Trade Center. After the 9/11 terrorist attack, Century 21 reopened its heavily-damaged store in record time and brought a sense of hope to the traumatized city.

When its disaster insurance policy refused to pay out on pandemic-related losses, Century 21 said that it had no other option than to file for bankruptcy last August. By Thanksgiving, all stores ended a months-long liquidation.

In early March, Century 21 announced an expected return to the retail scene. A spokesperson earlier this week said, “We are not in a position to share new news at the moment [but] we are in the process of lining up [our future] plans.” Reports state that Century 21 will return to the Big Apple after it establishes its initial presence in South Korea.

The Peebles department store in Elkton, Maryland was temporarily closed due to Covid on April 16, … [+] 2020. The closing occurred midway through its liquidation sale.

Michael Lisicky

The demise of Stage Stores warranted more attention than it received. Stage had a high profile in many of the country’s smaller and rural markets. The company operated hundred of locations under the Peebles, Stage, Bealls, Palais Royal, and Gordmans nameplates. For many residents in smaller American communities, Stage was the only local name-brand retailer for hundreds of miles.

Stage was still only halfway through a rebranding campaign when the pandemic first hit. Unfortunately, the company suffered a disastrous 2019 holiday season. Within the first two months of 2020, Stage’s stock value plummeted by 95% and the company was pushed into bankruptcy. Once Covid restrictions relaxed, hundreds of its newly renovated and rebranded stores reopened just to initiate a final liquidation sale.

Belk, JCPenney, and Neiman Marcus are three department stores that made their way into bankruptcy court during the pandemic. All three retailers were burdened by unmanageable debt and all three are owned by private equity firms. These firms look to maximize their investments and squeeze as much value as possible out of their acquisitions. 

Though all three retailers have exited their respective bankruptcies, many analysts still express some doubts about their longterm futures.

The sidewalks are quiet outside the Saks Fifth Avenue flagship store on March 4, 2021.

Michael Lisicky

Saks Fifth Avenue, another retailer owned by a private equity firm, spent a considerable amount of pandemic energy on lawsuits with some of its landlords, especially at its high-profile Bal Harbour and Beverly Hills stores. In early March, Saks announced that it will separate its growing e-commerce site from its brick-and-mortar business. Even though the company recently completed a $250 million renovation of its Fifth Avenue flagship, Saks is betting its future on the internet.

Macy’s, a publicly-traded retailer, has had its share of struggles during Covid. The retailer has been selling off valuable real estate in order to pay billions of accumulated debt. Macy’s is currently about half-way through a three-year strategic plan that includes additional store closures, an enhanced internet business, and a new small-format store layout.

The Grand Court at the Wanamaker building, now Macy’s Center City Philadelphia store, is shown on … [+] April 26, 2021.

Michael Lisicky

Macy’s inner-city stores have been hit hard by the pandemic, due to sharp declines in office and visitor traffic. Its Herald Square flagship, along with its Philadelphia, Washington, Chicago, and San Francisco downtown stores, had usually been some of its best-performing locations, pre-Covid.

The other retailer that warrants a Covid mention is Sears. The one-time World’s Largest Retailer operated 867 full-line stores twenty years ago. Now it is down to its last 28 locations.

A lonely shopper walks outside the Sears Brooklyn store on March 3, 2021. This Sears store, one of … [+] 28 remaining locations, was built in 1932 and was the site of one of New York City’s earliest Covid testing sites.

Michael Lisicky

Thanks to its ruthless leader and its antiquated and neglected fleet of stores, Sears spiraled downward for several decades and was never expected to make it to 2021. Although a shell of its former self, Sears has somehow survived the effects of Covid, and, at least for now, is technically still open.

The pandemic isn’t over and neither are the historic troubles that have plagued department stores. Unfortunately, there will likely be more retail casualties in the coming months and years, even as the field has grown considerably smaller.