The Department Store Is Dying. I Have the Gift Card to Prove It.
What the department store bankruptcy numbers don't tell you — and what we lose when the stores that knew us close.
I had a $1,600 gift card for Neiman Marcus after I sold two Gucci purses to FASHIONPHILE. My plan was to buy a new bag. When I went to Louis Vuitton to try on different styles, I learned they wouldn’t accept the card for payment. They weren’t the only brand, several stopped accepting gift cards for payment.
One sales associate actually told me they didn’t have any merchandise because “business was so good we’ve been wiped out.” This was said with a straight face.
Business was so good we’ve been wiped out
The reality is vendors stopped shipping new merchandise over unpaid invoices and late payments, as a result of the $2.7 billion merger between Neiman’s and Saks Fifth Avenue in 2024. What was supposed to be a coming-together of equals turned into a year-long financial downturn.
Some brands totally pulled their merchandise out of stores. Empty shelves called attention to inventory issues, especially in purses, shoes and jewelry. It was especially bleak during the critical holiday season.
In December, the company missed a critical $100 million interest payment to bondholders. In January, the company filed for Chapter 11 bankruptcy with $2.65 billion in debt.
The trade and business publications only talk about the numbers in a bankruptcy. You never hear about the people who get hurt. Bankruptcy wipes out the debt owed to the people with the least standing. Small vendors and 1099 contractors. People lose their jobs and health insurance.
When I had my own marketing consulting firm, I worked for a company called Picture People. When the company filed for bankruptcy, all of my invoices got wiped out. It was money I was relying on and nearly a year of work, none of which I got paid for. It took me nearly two years to recover financially. I’m not sure my ego ever did. Soon after, I returned to a corporate job.
Store closings are being announced as Neiman’s & Saks emerges from bankruptcy in the coming weeks. In downtown Dallas, Neiman Marcus will permanently close Sept. 30. The flagship store has been open for business in that spot — now a historic location — since 1914 as the company’s headquarters. It’s the fourth Neiman Marcus to close since the bankruptcy: 32 will remain open.
The restructuring allowed the company to cut debt from $2.65 billion to $1.2 billion. It secured a $500 million financing package. And 18 Saks Fifth Avenue stores are closing, leaving only 13 in the country. Iconic locations, like along Michigan Avenue in Chicago, are shutting down.
When I went into Neiman’s recently, it felt like a liquidation center. In one of their prime locations. Much of the space was empty and covered up with sheets, making it worse. Lots of merchandise was on sale. There were more sales associates than customers. And this is a store that’s staying open.
In the last 15 years, the “demise of the department store business model” contributed to at least 175 mall closures, according to a report from Green Street Research. In Dallas, new homes for the Mavericks and Stars were announced earlier this month. Each arena will sit on top of the site of a former shopping mall.
In Canada, Hudson Bay closed 96 stores last year. It marked the end of a 355-year history and North America’s oldest company.
As a kid, I remember long car drives with my mom to shop in department stores in Kansas City and St. Louis. They were destinations.
I’m not sure what we lose when these stores close where we built our memories. They were places that held significance because we bought our Bat Mitzvah or wedding dresses there. I wonder how long it will take for whatever replaces them to feel familiar. I hope whatever replaces them knows how to help us get dressed.
When life stops making sense, we shop. More soon.
I've wondered about the death of department stores.
In many cases I think they're long past their glory days. I would like nothing more than to see a replacement strategy for the not-too-big-to fail department stores comprised of boutiques.
Real boutiques. I'm not looking to get priced out like if I were to walk down Rodeo Drive, but I don't want to see pop-ups with cheap Chinese stuff. I can buy that myself online (and have) on Shein and Temu.
But you know, when I say "real boutiques" I mean the cool kind of boutiques you find in nicer tourist areas. The kind that have those cool jeans with the leopard stripe down each outer leg seam that you never before imagined existed in the world but once seen are pretty darn sure buying them would make your life feel complete.
But I digress.
Really all I wanted to say after picking my jaw up off the floor is please tell me you had recourse with a $1600 gift card and did not lose that money.
I walked through Nordstrom for the first time in a very long time and was surprised that the majority of the store was essentially selling things from other stores. Why is Nordstrom selling Madewell when there is an actual Madewell two doors down?