Department Stores
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 16 department store companies in the US carry a variety of merchandise organized into separate departments, with no one line of merchandise dominating sales. Major product categories include women’s, men’s, and children’s apparel; cosmetics and fragrances; footwear and footwear accessories; and accessories. Other product categories include domestics (sheets, tablecloths, towels) and other textile home furnishings; fine jewelry and watches; and small household appliances.
“Retail Apocalypse”
The impact of digital retailing hit department stores especially hard.
Trends and Fads
Because apparel generates over 50% of industry sales, department store business is subject to fashion trends and fads.
Industry size & Structure
The average department store retailer employs around 60,000 workers and generates nearly $8 billion annually.
- The department store industry consists of 16 firms that employ about 960,000 workers and generate over $130 billion annually.
- The industry is highly concentrated; the top 4 companies account for over 70% of industry revenue; the top 8 companies account for over 94%.
- Large firms include Kohl’s, Macy’s, JC Penney (owned by Catalyst Brands), and Nordstrom. The largest companies have locations in almost every state
Industry Forecast
Department Stores Industry Growth
Recent Developments
Jan 10, 2025 - Saks Acquires Neiman Marcus
- A significant shift occurred in the luxury department store landscape with HBC-owned Saks Global’s recent $2.7 billion acquisition of Neiman Marcus Group, according to Retail Dive. The acquisition brings together the nearly 40 Saks Fifth Avenue and 95 Saks Off Fifth stores with Neiman Marcus Group’s namesake 36 stores, five Last Call outlets, and two Bergdorf Goodman locations. According to Saks Global’s executive chairman Richard Baker, the deal creates “an unparalleled multi-brand luxury portfolio with tremendous growth potential. With data and innovation at our core and a portfolio of prime real estate, we aim to redefine the luxury shopping experience.” After the close of the deal, HBC plans to recapitalize its Canadian businesses as a standalone entity separate from Saks Global. In another change in the upscale department store world, Nordstrom will come back under family control in a $6.2 billion deal announced at the end of 2024.
- Legacy department store operator JC Penney merged with Sparc Group in January 2025 to form a new entity called Catalyst Brands, according to the Wall Street Journal. Sparc Group owns a portfolio of brands, including Aeropostal, Brooks Brothers, Eddie Bauer, Lucky Brands, and Nautica. The newly formed company will operate as a joint venture and owns over 1,800 locations with 60,000 employees. Sparc Group, which stands for Simon Properties Authentic Retail Concepts, is a strategic partnership between Simon Property Group, Brookfield Corporation, Shein, and Authentic Brands Group. JC Penney has struggled in recent years, filing for Chapter 11 bankruptcy protection in 2020 before being acquired by Simon Property and Brookfield for $800 million.
- Retailers are facing a nearly 30% increase in the rate of returns compared to last year, which could cut overall profit margins on the industry’s $1.2 trillion in global sales, according to Salesforce data reported in PYMNTS. Shoppers have already returned $122 billion in merchandise, per the report. According to Salesforce’s Consumer Insights Director Caila Schwartz, “Retailers had a robust holiday season, but a 28% rise in the rate of returns compared to last year is a cause for some concern.” AI tools are expected to be important in minimizing revenue losses on returns and reengaging with shoppers, per Schwartz. Returns volumes have increased in part due to the growth in online shopping and shopper practices such as “bracketing,” involving ordering multiple sizes or variations with the intention to return unwanted items, according to Hannah Bravo, head of Loop Returns. She said retailers are taking different approaches to managing returns such as offering longer return windows, charging fees related to item returns, and letting customers keep low-value items instead of returning them.
- The US department stores industry is projected to grow at a CAGR of -4.3% between 2024 and 2028, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. The expected growth rate is slower than the overall economy‘s anticipated growth. The report noted that consumer confidence is expected to improve in the forecast period, which bodes well for the retail and wholesale industries. Factors that continue to limit consumer spending are lower consumer sentiment levels, higher interest levels, and elevated price levels. On a positive note, inflation is subsiding, which supports a moderate increase of real disposable income by about 1.9% in 2024 and 2.4% in 2025. Retailers have seen internet sales increasingly grow in share since the pandemic, growing from 12.8% of total sales in February 2020 to 17.9% in April 2024.
Get A Demo
Vertical IQ’s Industry Intelligence Platform
See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.
Build valuable, lasting relationships by having smarter conversations -
check out Vertical IQ today.