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?”
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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.
