With the exception of traditional toys and games stores, department stores posted the steepest current value decline of any store-based retail channel in the US in 2018. Its weakness was largely the result of intense and mounting competition from other channels.
Although fears of a bricks-and-mortar retail catastrophe aired by some industry observers at the start of 2018 appear to have been overblown, for one retail channel these warnings came to fruition. In 2018, the number of department stores in the US recorded its strongest decline of the review period.
As department store operators find themselves threatened by the rise of off-price apparel and footwear specialist retailers, beauty specialist retailers, and internet retailing, they attempted to find novel ways to boost sales and profit margins. One method they increasingly turned to in 2018 was to expand their selections of private label products, following the lead of the dominant player in mass merchandisers, Target Corp, which posted healthy sales growth in 2018 by refocusing attention on its extensive collection of private label lines.
In October 2018, in a long-anticipated move, Sears Holdings Corp formally declared bankruptcy. The company, which owns the Sears department store and Kmart mass merchandiser banners, was once the largest retailer in the US by value sales.
The Bon Ton Stores Inc, offering department stores Bon Ton, Boston Store, and Carson’s, among others, has struggled to maintain a foothold in the fast-changing US retail environment, with the company’s value sales recording consistent decline over the review period. In 2018, Bon Ton declared bankruptcy in February, and although there were subsequent attempts made to find an investor to keep the company afloat, the decision was ultimately made to liquidate all bricks-and-mortar operations.
Although Macys Inc remained the largest department store operator in the US in terms of value sales, its business has been negatively impacted by the same competitive pressures that have plagued the rest of the channel, with the retailer declining in value terms throughout the review period. In 2018, however, Macys Inc attempted to correct the situation by launching technology-focused initiatives designed to boost sales and increase foot traffic to its stores.
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