What: Major department stores implement diverse transformation strategies in 2024, with Saks and Neiman Marcus moving toward a USD 2.65 billion merger, Macy's closing 150 stores while expanding Bloomingdale's and Bluemercury, and Nordstrom showing improvement amid potential privatisation plans.

Why it is important: The diverse approaches to transformation highlight how department stores are reimagining their business models through consolidation, store optimisation, and digital integration to remain relevant in an evolving retail landscape.

Department stores are pursuing varied strategies to address market challenges, with luxury retailers leading significant changes. Saks Fifth Avenue owner HBC has secured a USD 2.2 billion junk bond to finance its acquisition of Neiman Marcus Group, while simultaneously reviewing its store portfolio. Macy's is implementing its "Bold New Chapter" strategy, closing 150 underperforming stores through 2026 while investing in 350 "go-forward" locations and expanding its Bloomingdale's and Bluemercury brands.

Nordstrom shows signs of recovery and increased privatisation potential, while other mid-tier retailers like Kohl's and JCPenney adapt through leadership changes and value-focused strategies. These transformations come as consumers increasingly prioritise travel and experiences over material goods, forcing retailers to reimagine their value propositions.

IADS Notes: While Saks and Neiman Marcus near their merger with secured USD 2 billion funding, Macy's implements its "Bold New Chapter" strategy, and Nordstrom shows signs of recovery. The luxury segment particularly struggles as consumers shift spending to experiences, forcing retailers to adapt through store closures, digital integration, and strategic partnerships with technology companies.

How US department stores tried to reverse market share losses in 2024