The pandemic, and our re-emergence from it, are reshaping the economy, government and business in lasting ways. Read more analysis of how Covid has changed the world forever from the Journal’s Heard on the Street team.
The mall isn’t dead yet. But the in-person shopping experience of the future is going to be a lot different than what it was even two years ago.
Department stores and dressy clothing brands suffered last year; furniture, home goods and athletic brands fared better. Big-box retailers are likely to enjoy permanent boosts in popularity as shoppers look to consolidate shopping trips—a habit picked up during Covid that is unlikely to go away any time soon.
Last year produced the most retail bankruptcies since 2010, in the aftermath of the 2008-09 financial crisis, according to a report from professional-services firm BDO USA. Those bankruptcies included department store chains Neiman Marcus and JCPenney, and dressier clothing brands such as J.Crew and Brooks Brothers. Surviving department stores had a tough time in 2020, too: Macy’s has announced plans to close less-productive stores. In fact, roughly half of all remaining mall-based department stores are expected to shut by the end of 2025, according to Green Street, a real-estate research firm.
Who will fill the gap? Off-price retailers such as T.J. Maxx and Ross Stores had been taking market share from department stores for years and look likely to continue. That was already evident in their resilient performance last year despite relying very little—or not at all—on e-commerce. T.J. Maxx owner TJX Companies has said it sees opportunities to open more than 1,600 additional stores. Consumers have gotten savvy about price comparing and will tend to opt for discounters if department stores don’t offer compelling value.