The narrative on U.S. department stores has shifted in the past quarter, and WWD captured the reframing this week: the category is no longer collapsing, the trade publication concluded. With Saks Global and Neiman Marcus carved out as the still-restructuring outliers, what remains of the U.S. department store sector — Macy's, Nordstrom, Dillard's, Kohl's, JCPenney, and the regional chains — is poised to post organically modest gains in 2026 for the first time in close to a decade.
That's a carefully hedged statement, and the hedges matter. The sector is not growing fast. The growth that's projected is not coming from new store builds or category expansion — it's coming from improved inventory discipline, more restrained promotional cadence, better merchant curation, and a customer base that's finally stable after a decade of attrition. WWD's framing is that the category has earned the right to be rated "modestly stable" rather than "in structural decline." For a sector that lost 30% of its mall footprint between 2015 and 2024, that's a meaningful re-rating.
Macy's is the bellwether for the new posture. The "Bold New Chapter" turnaround under CEO Tony Spring is in year three, with 14 additional store closures scheduled for 2026 — part of the previously announced wind-down of approximately 150 underperforming locations toward a steady-state base of 350. The remaining base is being heavily reinvested. The 125 "Reimagine" stores (the high-traffic, high-touch flagship-format locations Macy's has been treating as proof-of-concept) posted 2.7% comp sales growth last quarter, materially outperforming the rest of the chain. The strategic logic is clear: shrink to a footprint that can be operated profitably, then reinvest in product, staffing, and store environment to defend that footprint.
Nordstrom's path is structurally different. The company went private in March under a take-private led by the Nordstrom family in partnership with Mexico's El Puerto de Liverpool retail group. As a private company, Nordstrom no longer has to publish quarterly disclosures, but the family's stated intention has been to remove the public-market quarterly pressure and accept lower near-term margins in exchange for longer-cycle investment in the off-price Rack format and the digital flagship. Whether that thesis works will be visible in private-market Q3 cash-flow disclosures to lenders later this year.
Dillard's is the under-discussed standout. The Little Rock-based chain has been operating with category-leading per-store productivity, almost no public-market analyst coverage, and a balance sheet that allows aggressive capital returns. Its 2025 results showed comp sales modestly positive and operating margins at the top of the sector. Dillard's quietly demonstrates that the regional department store model — owner-operated, geographically concentrated, conservatively merchandised — was never the structural problem in U.S. department stores. The structural problem was the financialized national chains that took on too much debt and too many marginal locations during the 1990s consolidation cycle.
Kohl's is the question mark. The company is still working through its turnaround under interim leadership after the Tom Kingsbury departure last year. Sephora-at-Kohl's continues to perform, but the apparel mix that drives the bulk of revenue is still in negative comp territory. Kohl's is the most exposed name in the category to the Moody's tariff-and-margin call published this week, as Endcap covered separately.
The piece of the WWD analysis that should land hardest with retail-tech vendors is the inventory-discipline thesis. The improvement in the sector isn't coming from a consumer comeback — it's coming from operators that have learned to plan inventory more conservatively, take markdowns earlier, and avoid the holiday-season inventory blowouts that destroyed margins in 2022 and 2023. That discipline is sticky. Once a department-store buyer has been trained to plan flat or down on a category, restoring open-to-buy budgets for new vendors and new categories takes years, not quarters. The category's stabilization comes with a structural ceiling on incremental SKU additions and brand launches — bad news for the smaller brands that historically used department-store distribution as a launchpad.
For retail real estate, the WWD read aligns with the UBS five-year closure forecast also published this week, via Retail Dive. UBS's note named the off-pricers and discount mass merchants as the category beneficiaries of the closure cycle — but the WWD analysis adds a quieter beneficiary: the surviving department stores that stay in good A-tier malls. Macy's at King of Prussia, Westfield Topanga, or Chicago Water Tower is now competitively differentiated from Macy's at a B-tier mall in a way it wasn't five years ago. Class-A mall landlords (Simon, Brookfield, Macerich) have been quietly repositioning around exactly this dynamic.
The category outliers — Saks Global with its Chapter 11 exit financing, Neiman Marcus Last Call closing remaining outlets, and the Off Saks 5th worker contract dispute that hit a deadline last week — are still being carved out of the picture. Saks Global's emerging post-bankruptcy footprint will be roughly 50 luxury department stores, per Endcap's prior coverage of the disclosure statement. Whatever survives there will be a different category from the mid-tier department store that WWD is now framing as stable.
The takeaway for anyone planning 2026 marketing or wholesale strategy against the category: the floor is in. Don't expect growth. Expect disciplined operators, conservative buying, and slow capital returns to public-market investors. For brands and vendors, the right read is to align with the surviving operators' margin agenda rather than fight it. The decade of free distribution at the cost of margin is over.