Let’s face it, traditional department stores were having a tough time surviving in 2020 as it was. Add in a pandemic of historic proportions, and things have gone from bad, to worse, to catastrophic.
What follows is a list of five department stores that will have an uphill battle of the ages if they want to survive into 2021. These businesses already had the desk stacked high against them well before the pandemic.
5. Saks Fifth Avenue
The chain, which is currently owned by Hudson’s Bay, could very well be one of the catalysts for how other non-essential retail chains will operate post COVID-19.
Saks has developed a re-opening plan, where they will continue to provide customer service while also focusing on customer safety. Employees will be wearing masks that will be considered fashionable and welcoming. The stores will also be sanitized in plain view of customers in an effort to provide comfort.
In 2015, the nearly century-old flagship New York store was given a renovation at the cost of three years and $250 million dollars.
4. Lord and Taylor
The 194-years-old upscale retailer is also on the verge of potentially filing for bankruptcy, due to the pandemic. However, their financial troubles started earlier. In January of 2019, former parent company Hudson’s Bay (who still owns Saks Fifth Avenue) closed the Lord and Taylor flagship store in New York. This as some of the brand’s merchandise began appearing in Walmart stores. Several other stores had closed as the company was looking to appeal to new customers for its survival.
In August of 2019, Hudson’s Bay sold the name to rental retailer Le Tote, who decided to keep the remaining 38 Lord and Taylor stores open. The company reverted back to the store’s original logo in an effort to keep current customers returning.
As of April 2020, the store did miss their monthly interest payment. However a reworking of their finances could keep the store afloat for the time being.
JCPenney had just started getting their free-fall under control by the end of 2019. According to their corporate site, JCPenney “met or exceeded all five financial guidance metrics for the year.” This statement made, even after reporting a 7.7% decrease in overall sales.
However, in order to keep their strength up, the classic department store chain needed all the momentum they could get. With the pandemic closing brick-and-mortar stores across the country, JCPenney has missed their April 2020 debt payment, and are on the verge of possibly filing for bankruptcy at the end of their 30-day grace period.
JCPenney has been in business since 1902.
2. Neiman Marcus
Neiman’s was having a hard time staying afloat even before COVID-19 struck brick-and-mortar stores across the world. With a 16% loss in revenue in 2019, the Dallas, Texas based luxury chain was already fighting a steep uphill battle.
To top it off, the store is currently dealing with a lawsuit over a controversial $2500+ coat design. The design was alleged to have violated copyright and American Indian arts protection laws.
Neiman Marcus filed for bankruptcy protection in April 2020.
The once-powerful department store stronghold was already down 58% heading into the year. Many stores were already systematically closing well before the COVID-19 pandemic. The chain had filed for Chapter 11 in 2018. What remained of Sears was bailed out by former CEO Eddie Lampert and his own hedge fun ESL Investments Inc.
Sears as we know it today is simply a new company with an old name. In 2019, the “new Sears” began experimenting with a smaller hard-line store named Sears Home and Life in three states. These new stores will focus on home goods such as mattresses and appliances.