With most of America’s department store chains now stabilized - excluding Saks Fifth Avenue and Neiman Marcus - the outlook for 2026 appears to be good. The sector is positioned to replicate the modest growth it saw in 2025, which was attained organically rather than through expansion, and through improved inventory management, better product curation, and restrained discounting.
Department store retailers are also beefing up their best private brands with greater style and differentiation. 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. Meanwhile, Americans for two years have been demonstrating a renewed interest in visiting malls and spending time in physical stores. Shopper traffic isn’t back to pre-pandemic levels, but it’s getting better.
The streamlining at Macy’s will continue until the department store count is down to 350, which is expected by the end of 2026. The focus is on the best-performing 125 doors, which are receiving significant investments for increased staffing in high-traffic areas such as women’s shoes and fitting room areas, fresher products, and improved visuals. The 125 doors have been outperforming the overall Macy’s department store chain. Bloomingdale’s has opportunities for organic growth and will provide brands with additional points of distribution. There are opportunities to open additional Bloomies and Bloomingdale’s outlets. Among the brands recently launched at Bloomingdale’s are Toteme, the DWP clothing line by Gwen Stefani, Zimmermann, Victoria Beckham, Christian Louboutin and Roger Vivier. Nordstrom enters 2026 with a new approach to the business, having turned private and now owned by the Nordstrom family and Liverpool.
Another privately owned, family-run department store chain, Von Maur, plans to open an anchor store at the Freehold Raceway Mall in Freehold, N.J., in the fall. The new location will be Von Maur’s first store in New Jersey and 40th in the chain. In 2024, Von Maur opened a department store in South Hills Village in Pittsburgh, marking the company’s entry into Pennsylvania. Last spring, Von Maur opened its first location in North Dakota at the West Acres Mall in Fargo, N.D. Von Maur has a five-year, $100mn plan to renovate its department stores underway and will also be opening additional Dry Goods locations. The Von Maur-owned Dry Goods is a women’s specialty chain with about 90 doors.
Dillard’s will close its 240,000sq ft (20,000m2) store at The Shops at Willow Bend in Plano, Texas, this month, but the 272-unit chain has been a steady performer. For Q3, Dillard’s reported a 4.2% gain in net income and comparable-store sales up 3%. For Q2, Penney’s was in the black, with $110mn in net income, compared to a $33mn loss in the year-ago period. Executives have cited momentum entering Q4, largely due to improved family offerings and strong values appealing to its working class, middle American target audience, and characterized 2025 as ‘a year of resurgence.’