When Saks Global filed for Chapter 11 bankruptcy protection in January, it raised uncomfortable questions about the viability of the American department store. Can a retail model built on volume and variety survive in an era of Amazon Prime and direct-to-consumer brands? And if department stores disappear, what happens to the designers and the brands that rely on them for distribution, credibility, and scale?
While Saks restructures under the weight of strained vendor relationships and mounting debt, other major players are fighting back against the narrative that the model is dying — and positioning themselves to capitalize on the moment. Nordstrom, which went private in late 2024, is reinvesting in its stores as it celebrates its 125th anniversary with ambitious expansion plans. Macy’s Inc. posted a 3.2% comparable sales increase in its most recent earnings — its strongest performance in 13 quarters — while its luxury banner Bloomingdale’s delivered its best results in over three years. Bloomingdale’s is also in the midst of reimagining its 59th Street flagship, floor by floor, introducing 56 new designers this year and building out a two-level Chanel boutique.
“The traditional department store model that was offering volume, novelty, and variety in one place is not unique any longer,” says Thomaï Serdari, a luxury marketing professor at New York University (NYU). “The question is: what is the value add that a retailer needs to offer to the customer?”
This is shaping up to be a survival-of-the-fittest year for US department stores. Through interviews with shoppers, retail analysts, and department store executives, a clear picture emerges: the winners aren’t just surviving by offering volume and variety; they’re fundamentally rethinking what a department store should be.
Destination, not convenience
The most successful department stores have shifted from transactional retail to experiential destinations that offer something consumers can’t get from Amazon or a direct-to-consumer (DTC) brand.
“When department stores were popular, especially in the ’50s and ’60s, you saw families spend hours there, because there was always something fun to do — like watch a fashion show, join clubs, and listen to live music,” says Hannah Truly Elisha, a content creator focused on retail history. “The experience, I believe, is the most important part, and something department stores have slowly erased. They are not giving me a reason to choose them over Amazon.”
Nordstrom has leaned into this philosophy with partnerships that extend beyond traditional retail. Last year, the company launched a collaboration with aesthetics clinic SkinSpirit, bringing medspa services to select stores. In New York City, Nordstrom partnered with West Village fine jewelry destination Muse as the cornerstone of its flagship’s new Jewelry Hall. The company is also expanding its network of Nordstrom Locals — service hubs that offer tailoring; buy online, pick up in-store; and returns in neighborhoods across the country.
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Bloomingdale’s is taking a similar approach. Chief merchant Denise Magid says the company is giving its 59th Street flagship a full facelift, one floor at a time, bringing that curation to life through “immersive campaigns, in-store animation, and personalized clienteling”.
“The future of the department store is centered on curation, experience, and human expertise, not simply scale or endless assortment,” Magid says.
Serdari argues that thriving retailers have cracked the code on creating environments that feel like respites rather than obstacles. “When you walk into Nordstrom, you’re not stressed out,” she says. “People are not interested in seeing hanger after hanger of dresses. They want places to rest; they want places to be entertained. The interior layout of the department store needs to change. How do you interrupt the flow of presenting the merchandise by genuinely providing opportunities to the end consumer to be in an interesting environment, be stimulated, be entertained, be educated about the product in a different way?”
The stores getting it right are doing exactly that. Macy’s offers a clear example: the retailer’s Go-Forward stores — the locations it has chosen to invest in and modernize — are posting positive comparable sales growth, driven by enhanced merchandising, improved store presentation, and stronger omnichannel integration. The 125 stores that have undergone the most targeted upgrades, known as Reimagine 125 locations, are outperforming the rest of the fleet. It’s a sign that when department stores make strategic in-store investments, rather than trying to compete on breadth alone, consumers respond.
Curation over volume
The experience shift is only half the equation. Today’s shopper doesn’t want more, they want better — and the brands they can’t find everywhere else. This is a delicate balance for department stores, which have historically leaned on big-name brands that guarantee sales. But the most successful retailers are betting that discovery — not just reliability — is what brings shoppers through the door.
“I think the downfall of a department store is having too much,” says Diana-May Kirori, a New York-based content creator and frequent department store shopper. “You just need to know where the line is of where people may feel overwhelmed versus where they feel like it’s a really good curation.”
Bloomingdale’s is betting heavily on this strategy. While luxury remains core to the business, Magid says growth is “coming from a balanced mix of luxury, premium contemporary, and emerging brands, reinforcing Bloomingdale’s role as a true incubator in the retail landscape”. The retailer dedicates floor space and marketing support to emerging designers, treating them not as filler, but as future anchors. It’s seeing particularly strong performance in premium contemporary, fine jewelry, luxury fragrance, and home (especially tabletop).
Nordstrom is taking a similar approach, positioning itself as a platform for both established and emerging designers to connect with an engaged community of shoppers. The retailer works closely with smaller brands to help them scale, offering merchandising support, data insights, and visibility they wouldn’t receive elsewhere. The retailer’s Make Room for Shoes campaign is a nod to its roots — Nordstrom, after all, started as a shoe store back in 1901 — but it’s also a commitment to discovery, spotlighting both heritage names and up-and-coming footwear designers.
Gabriella Santaniello, founder and CEO of retail consultancy A Line Partners, points to smaller format stores as evidence that curation works. She cites Stanley Korshak in Dallas, Elyse Walker in Los Angeles, and A’marees in Newport Beach as examples. “All three are smaller format stores with multiple brands and have a highly curated assortment of merchandise,” she says. “They know their customers and don’t try to be anything else.”
Serdari draws a parallel to European retail, where smaller boutiques coexist with department stores that serve a different function. In cities like Paris and Rome, you can buy everyday items at local shops, then visit a department store for the kind of curated, elevated merchandise that feels genuinely special.
The stores that will survive, Santaniello predicts, are “the ones that realize they need to edit the vendor list, curate the assortments and provide top-tier customer service”.
Service as strategy
In a fragmented retail landscape, customer service and loyalty programs have become critical differentiators, while the stores that underinvest here are often the ones filing for bankruptcy.
“For me, Nordstrom has always been the golden standard when it comes to customer service,” Santaniello says. “There is nothing that can replace it.”
Nordstrom has built that reputation through investments that go beyond the transactional. Its Nordy Club loyalty program offers members early access to products, events, and exclusive experiences, while expanding tailoring, alterations, and styling services in neighborhood hubs. The company also empowers sales associates to make decisions that prioritize the customer experience over rigid corporate policy — a flexibility that’s increasingly rare in retail.
For shoppers, this translates to tangible benefits. Kirori appreciates being able to “speak with a sales associate, especially if they know the brand well”. She also values discovering in-store sales that aren’t advertised online.
But inconsistent service is where some prestigious retailers fall short. “Stores that are held in high esteem for their customer service, like Saks Fifth Avenue and Macy’s, don’t do that for everyone, and that’s a problem,” says Elisha. “Not all customers come first. Customers with money do.”
It’s exactly that kind of inconsistency that may be part of what’s separating survivors from casualties. When Saks Global filed for bankruptcy, analysts pointed to strained relationships with vendors — relationships built not just on business terms, but on trust and consistent treatment.
Santaniello predicts the Saks bankruptcy will create pressure in the space, because they will likely start discounting. Vendors who are owed money might also change how they do business with department stores, she says, in order to avoid a similar situation in the future.
Serdari frames the challenge more broadly: department stores can no longer rely on demographic stratification. Retailers need to “truly look at their own customers and try to understand who they are and what drives them”, she says.
