The Top 10 Victims of the Retail Crisis

Neiman Marcus became the first major U.S. department store to file for bankruptcy due to the pandemic shutdown. CEO Geoffroy van Raemdonck commented, 'Before COVID-19, Neiman Marcus was on track to achieve long-term growth. But like most businesses, the pandemic has pushed our operations to an unprecedented breaking point.'

Macy’s has been highly dependent on its physical stores and, as a result, laid off 125,000 employees during the first two weeks of the lockdown. J.Crew entered bankruptcy in early May, and both JCPenney and Lord & Taylor are reportedly weighing similar decisions.

The pandemic was the final blow for many businesses, but these companies were already struggling well before lockdowns were enforced. A report by S&P Global Market Intelligence indicated that department stores face a higher risk of defaulting on loans than any other retail sector, with a 42% chance of default within the next year.

Back in 2017, Credit Suisse projected that 20 to 25 percent of shopping malls would close by 2022, mainly due to the closure of anchor stores like Macy’s, JCPenney, and Sears.

Although Neiman Marcus has yet to disclose whether it will shutter any of its locations, many iconic brick-and-mortar retailers have already taken that step. In 2019 alone, over 9,300 stores closed, a 60 percent increase from the previous year. Looking ahead a decade, many familiar brands could be a distant memory. Here's a glimpse at once-thriving stores that have either gone out of business or are on the brink of doing so.

10. Department Stores

Department stores have long been a staple in the world of retail. They are the cornerstone stores within shopping malls, occupying prime spaces in suburban strip malls and city blocks. Yet, these retail giants are now facing the threat of extinction.

Marshall Field’s, established in the 1800s, and Hecht’s, founded in 1957, were both bought by Macy’s in 2005, leading to their closure or conversion. In the following year, Macy’s also retired the Kaufmann’s department store name. However, Macy’s, which was founded in 1929, is now battling its own struggles, including plans to close 125 stores over the next three years.

Bon-Ton stores, including its brands Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s, and Younkers, were liquidated in 2018. This resulted in the closure of 256 locations.

Filene’s Department Store, a Boston-based retailer founded in 1881, declared bankruptcy in 2009. All of its physical stores have since closed. Similarly, California-based Mervyn’s, established in 1949 and once boasting nearly 200 locations, filed for bankruptcy in 2008 and shut down all of its stores.

Sears and JCPenney, two major department store chains, are still in business but struggling. Sears, along with Kmart, has shuttered over 3,500 stores and laid off about 250,000 workers in the past 15 years. The company filed for Chapter 11 bankruptcy in October 2018 and began closing stores. In February 2019, it was acquired by Transformco, which revealed that fewer than 200 Sears and Kmart stores would remain operational.

JC Penney, which had more than 1,100 stores in 2010, has been forced to close a significant portion of them due to declining sales. The retailer has not reported a quarterly sales increase since the 2017 holiday season, with 2019 holiday same-store sales dropping by 7.5 percent. In early 2020, six stores closed, and the coronavirus pandemic ultimately led to the company filing for bankruptcy this month.

9. Clothing Stores

There are clothing stores for everyone, from those that cater to the whole family to specialized shops. Some focus on children, tweens, or teens, while others offer clothing for specific body sizes. There are also stores dedicated to selling just one type of item, such as underwear, socks, hats, or suits.

As mentioned earlier, department stores that offer clothing for every family member are facing difficulties. However, many specialty clothing stores are also struggling.

Filene’s Basement, an off-price retailer originally part of Filene’s department store, closed all 20 of its locations in 2011. The Limited unexpectedly shuttered all 250 of its stores in 2017. Then, in January 2019, Henri Bendel, after 123 years in business, shut down all 23 of its stores.

Charlotte Russe, a women's fashion chain founded in the 1970s, closed more than 500 locations in April 2019. Avenue, a plus-size women’s clothing retailer, closed 222 stores in August 2019. Also in August, San Antonio-based A’Gaci closed all 54 of its stores. Barneys New York, a luxury department store established in 1923, ceased operations in February 2020. DressBarn announced the closure of all 650 locations due to “unsatisfactory profitability in the current retail climate.”

Steve & Barry’s, a retailer known for affordable sportswear for teens, closed all of its locations in 2009. Gadzooks, another teen clothing brand founded in 1983, filed for bankruptcy in 2005 and was purchased by Forever 21, which subsequently closed all of its stores. Wet Seal, a teen apparel store, permanently closed its physical stores in 2017 and is now exclusively online.

Gymboree, a chain that specialized in clothing for babies and children, closed 400 stores in 2017 under Chapter 11 bankruptcy protection. In January 2019, the company filed again and shut down over 800 Gymboree and Crazy 8 stores. (Gymboree products are now sold by its former rival, The Children’s Place.) Peek Kids, a premium children's brand, closed its locations when Charlotte Russe went out of business and is now sold exclusively by new owner Mamiye Brothers Inc.

The retail apocalypse, combined with plummeting birth rates (which reached a record low in 2018), led Destination Maternity to declare bankruptcy in 2019. Only a few of its 458 locations across Destination Maternity, Motherhood Maternity, and Pea in the Pod will remain open.

Several clothing retailers, including Forever21, Gap, Chico’s, Victoria’s Secret, Christopher & Banks, Francesca’s, Abercrombie & Fitch, and J. Crew, are still operational, though they have closed numerous stores.

8. Shoe Stores

Shoe stores that operate in physical locations are struggling. They face the same challenges as apparel stores and are up against online giants like Zappos, Shoe.com, and Amazon.

Consider Kinney Shoes, which was founded in 1894 and had 467 stores at its peak. All of them were closed by 1998. In the 1960s, Thom McAn operated over 1,400 stores before closing in 1996. However, the brand is still sold by other retailers. In February 2019, Payless ShoeSource filed for bankruptcy and closed all 2,500 of its locations in one of the largest retail liquidations ever.

7. Toy Shops

Imagine children gazing at the vibrant displays in the window of a downtown toy shop—a scene once commonplace. Sadly, toy stores are no longer as popular. It’s not that kids have stopped playing, but rather that their toys and the way they get them have evolved. Gaming and electronics dominate, even among younger children, leaving traditional toys like wooden puzzles, toy trains, and dolls behind. Today, much of what children play with can even be streamed digitally.

FAO Schwarz, the legendary toy shop, once stood proudly on Fifth Avenue in New York City. The store closed in 2015 but made a comeback three years later at a new Manhattan location. Sadly, other toy stores weren't as fortunate.

Imaginarium was a beloved educational toy chain in the 1980s. But as the 1990s progressed, its stores began to close, and by 2003, its parent company, Toys R Us, shut down all of them. Zany Brainy went bankrupt in 2001, while K·B Toys closed all of its 1,300 stores in 2009. And in 2018, Toys R Us—the ultimate toy destination—closed its doors for good.

6. Electronics and Technology

While both kids and adults increasingly turn to electronic entertainment, the stores selling these products haven’t been spared from the retail apocalypse. Media Play, which launched as a large-scale version of Sam Goody, permanently closed in 2006. The electronics chain Tweeter, founded in 1972, shut down all of its locations by 2008. Circuit City closed 567 stores in 2009. CompUSA, a chain started in 1984, closed its final store in 2012. Sharper Image now sells products online, via catalogs, and through third-party retailers, but no longer has physical stores.

With video games now easily downloadable, players no longer need to visit physical stores to make purchases. This poses a significant challenge for GameStop, which operates over 5,700 locations across 14 countries. The company has faced substantial losses in recent years, closing nearly 200 stores in 2019. CFO James Bell also warned of a "much larger tranche of closures" over the next 12 to 24 months.

5. Music and Video Retailers

Before streaming music and movies became the norm, people browsed physical stores to find their favorites. Many younger consumers have never experienced music in any format other than digital. Tower Records, a giant in the 1990s, closed all of its U.S. locations in 2006.

Sam Goody's first music store opened in the 1940s but eventually couldn't keep up with changes in music technology. By 2010, its stores had either shut down or were transformed into other brands like FYE. Hastings Entertainment closed all of its 123 stores in 2017, the same year Virgin Megastores, once a dominant force in the CD market, shut down all of its U.S. locations.

Fifteen years ago, Blockbuster, a leading video rental chain, boasted over 9,000 locations and revolutionized movie-watching habits. However, its downfall began long before Netflix’s rise, culminating in a 2010 bankruptcy. Today, the last remaining Blockbuster store stands in Bend, Oregon.

4. Furniture and Home Goods

Despite the boost HGTV provided to the home improvement and décor industries, furniture and home goods retailers have not escaped the retail downturn. Levitz Furniture, established in 1910, shuttered its stores in 2008. Linens 'n Things, which had over 500 locations in 2006, closed its doors by 2008. (The brand continues to operate online.)

In October 2019, Hamilton Beach Brands announced it would close all 160 Kitchen Collection locations, which specialized in small kitchen appliances and cooking tools. A.C. Moore, a popular craft-store chain, also shut down its 145 stores. Its parent company, Nicole Crafts, is converting some locations into Michaels stores.

Bed, Bath & Beyond succumbed to pressure and closed 60 of its stores in 2019. Pier 1 Imports followed suit, announcing the closure of 57 stores in 2020. Z Gallerie, a home furnishings retailer, will shut 17 out of its 76 stores as part of its Chapter 11 restructuring.

3. Discount Retail Chains

While saving money is always in vogue, the ways people hunt for discounts have evolved.

Ames Department Store, which once boasted over 700 locations, faced mounting debt and declining sales before ultimately closing its doors in 2002. Meanwhile, Dollar Tree revamped 200 Family Dollar stores into Dollar Tree outlets and shut down nearly 400 other Family Dollar locations.

In 2019, Fred’s discount chain saw a wave of closures, shutting down 159 stores in May, 104 in June, and 49 more in July. By the end of the year, the remaining 520 stores were all closed for good.

Founded in 1962, Shopko prided itself on offering customers 'quality service and low prices.' However, when Amazon emerged offering the same, Shopko couldn’t compete and closed all of its 371 stores in 2019.

2. Sporting Goods

The retail world of sports is as competitive as the games themselves.

Oshman’s Sporting Goods, founded in 1933, was bought by Gart Sports in 2001 and rebranded as Sports Authority. At its peak, Sports Authority operated more than 200 stores across the U.S. but was forced into bankruptcy in 2016. All stores closed, and its website was sold to Dick’s Sporting Goods, which had already acquired Galyan’s Trading Post in 2004, Joe’s in 2009, and Golfsmith in 2016.

Sport Chalet, which began in 1959, unexpectedly shut all its locations in 2016. MC Sports followed with closures in 2017. In 2019, Advanced Sports Enterprises filed for bankruptcy and revealed the closure of 102 Performance Bicycle stores. Sports retailer JackRabbit acquired Olympia Sports and announced plans to close all 76 of its stores.

Modell’s Sporting Goods, the oldest sporting goods chain founded in 1889, declared in March 2020 that it would shut down all 115 of its stores.

1. Book Stores

Bookstore chains negatively affected smaller, independent bookstores. Then, e-readers like the Kindle and digital audio platforms such as Audible further hit these businesses. Despite this, e-book sales eventually plateaued, and the physical book endured. What changed was how physical books were bought: no longer in stores, but online. In 1987, Barnes & Noble acquired B. Dalton Books and officially closed it in January 2010. As the largest bookstore chain, Barnes & Noble has struggled, closing approximately 10% of its stores since 2011.

Waldenbooks, founded in 1933, merged with Borders in 1994. When Borders went bankrupt and liquidated in 2011, all of their locations, including those of Waldenbooks, closed permanently.

Family Christian Stores, which operated 240 locations selling religious books and merchandise, closed in 2017. Similarly, LifeWay Christian Stores shut down 170 stores across 30 states.

Book World, a 45-store chain founded in 1976, announced its closure in December 2017. Owner Bill Steur told The New York Times, 'Sales in our mall stores are down this year from 30 to 60 percent. The internet is killing retail. Bookstores are just the first to go.' Amazon ultimately overtook Book World as the fourth-largest bookstore chain.