Social distancing measures, economic shutdown hurting an already struggling industry
Before the prevalence of online shopping, department stores were a staple of American consumerism. But recent trends in the retail industry prove that the popularity and presence of today’s department stores are a thing of the past.
The economic shutdown due to COVID-19 has put department stores in a precarious position, but this is just another chapter in a string of unfortunate events. Early last year, Forever 21 filed for bankruptcy, finding itself unable to keep up with the prevalence and popularity of online shopping. So did many other brands, including long-time American luxury department stores like Barneys New York. Not only have retailers lost business to online shopping, but they still have to deal with heavy costs including rent. For some companies, such as Toy “R” Us, the troubles go beyond that. In 2018, Toys “R” Us closed or sold all of its stores in the U.S. The trouble for them began when competing department stores like Walmart began selling toys in their own stores. That, coupled with massive amounts of debt and e-commerce, spelled out the inevitable end for Toys “R” Us.
Department stores have a long history and an important place in the story of global consumerism. The very first department store in history, Harding, Howell & Co’s Grand Fashionable Magazine, located in London’s St. James district, is considered to be the precursor to the modern department store. In the U.S., these powerful “palaces of consumption” for middle- and upper-class consumers gained prominence by the 19th Century. Stores like Marshall Field in Chicago and others across the world were in large ornate buildings with grand, enticing windows, extending an invitation to the American consumer.
However popular these stores were, their survival always depended on their ability to adapt to the cultural and economic patterns of the time. Vicki Howard’s “From Main Street to Mall: The Rise and Fall of the American Department Store” examines how these patterns in American society have propagated the evolution and eventual collapse of these stores. From the changing landscape of American cities to the emergence of chain and discount retail, online shopping and the recent economic shutdown are just another challenge for department outlets.
The coronavirus pandemic has raised concern over the future of department stores across the world. The already struggling industry has seen an 8.7% drop in monthly sales for March of 2020, which is unlikely to improve in the coming years.
“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, in an interview with The New York Times. “The genre is toast, and looking at the other side of this, there are very few who are likely to survive.”
In mid-April, Neiman Marcus filed for bankruptcy partly due to the economic fallout from the shutdown. Many other department stores like Nordstrom Inc. and Macy’s Inc. are fighting to ensure the same won’t happen to them, but the future is bleak. The pandemic, however, was not the decisive factor in the demise of Neiman Marcus, one of the most iconic department stores. Like many others, Neiman Marcus struggled to keep up with the shift to online shopping as well as the emergence of discount retail chains.
Most recently, J. Crew announced that it was filing for bankruptcy. The temporary store closures are just an added pressure to an already crumbling industry.
In February, in an attempt to create a more sustainable business model, Macy’s made plans to cut about 125 stores nationwide and 2,000 corporate jobs — a common trend among many stores for some time now. Recent job loss from the pandemic has only made business and job prospects more dire, signaling the end of department stores as we know them.
It’s hard to see what a future without department stores will look like. Many of us will be able to survive without going to department stores, but those whose jobs depend on the survival of the retail industry may not. It’s hard to know what will become of department stores in the thick of a global pandemic and recession. What is certain is that both the livelihoods of many and our relationship with consumerism, fashion and even sustainability will change dramatically. In the long term, this trend may correct itself, but the uncertainty of what the next few months holds is a scary thought.
Written by: Simran Kalkat — firstname.lastname@example.org
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