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Interesting. I have seen large scale department stores like Nordstrom die one after another. Nordstrom Canada actually failed a few years ago. I am not sure

Interesting. I have seen large scale department stores like Nordstrom die one after another. Nordstrom Canada actually failed a few years ago. I am not sure if I was rich and owned Nordstrom in some way, I would invest my own money into Nordstrom. Instead I would do everything I can to diversify.

whateveracct 2y ago
Nordstrom has been pretty steady as-is though. It's still one of the few brick and mortar stores I actually go to. Also, their online shopping is pretty solid as well. I always use them for gifts. I think they buffed it up during the pandemic and its paid dividends.
- internet101010 2y ago
  The only time I will set foot in a mall is to go get a new suit/jacket or something at Nordstrom. It's at the nice halfway point between the slop and Neimans and they can turn it around same day for $25.
mitthrowaway2 2y ago
I don't think department stores are failing because they're a bad business. I think they're failing because they're being gutted by corporate raiders for their real estate assets.
- flyingpenguin 2y ago
  I disagree, I think they are bad business. I have come to absolutely detest online shopping. I have to return so much stuff, live with so many things that I don't actually love, generate sooooo much trash, and spend hours on hours researching everything because I can't hold it in my hand. Then I walk into REI and ask them if I can try on a size 9 wide of a running shoe. They tell me they don't have it, so I ask them if they have any wide... they don't have a single wide shoe. Then I ask what they have and they say "Ohh we have 200 of the exact same shoe in the exact same size in stock" And then I go order 5 different 9-wide shoes on amazon and return 4....
  - ajmurmann 2y ago
    I understand this in part is an issue with the fashion industry. AFAIK you might order 100 green S, 100 red M and you get 150 blue L and 50 red M (simplified example). Haven't done anything related to this in over ten years though. Things might have gotten better and depend on your scale/leverage.
  - AzzieElbab 2y ago
    Consider yourself lucky. My feet are not just wide. I wear 10.5 size and have high arches.
    - selimthegrim 2y ago
      Shoe twin, lay me a trail of breadcrumbs to follow (I actually do wear New Balance as per the comments below)
  - luckylion 2y ago
    > I have to return so much stuff, live with so many things that I don't actually love, generate sooooo much trash, and spend hours on hours researching everything because I can't hold it in my hand. I hate the research part, especially Amazon hasn't improved their system since the late 2000s. I'm sure lots of great improvements on the logistics and business-development side, but the store feels like hobby project and "we couldn't make filtering work, so whatever". But on the trash part: you generate visible trash. But if you frame it slightly differently: the mall you'd go to needs to be built and heated and fully staffed, and thousands of cars need to drive there etc etc, and that consumes a lot of resources. It's just not visible, and with online-shopping it is. But I'm pretty sure online-shopping is more efficient even if you have to return 4 out of 5 shoes.
    - malfist 2y ago
      Didn't you see? Amazon improved it by putting the option to have an AI pick out the "best" of 2,000 identical items Amazon is actively killing the usefulness of their store in a race to beat ali express and temu to the bottom
- ajmurmann 2y ago
  If they cannot generate enough profits to even justify holding on to the real estate rather than putting the real estate to some other use, is that meaningfully different from failing?
  - well_actulily 2y ago
    Anecdotally, but it seems like a lot of these sites that once hosted these department or big box stores don't wind up getting redeveloped. At best, they might be home to a Spirit Halloween for a couple months out of a year. Having to compete with online retailers is certainly a challenge, but it doesn't seem like what private equity does to these legacy companies benefits anyone but their investors' desire for short-term profits.
    - deleted 2y ago
      [deleted]
  - antonvs 2y ago
    Many private equity firms are perfectly happy to extract cash from viable businesses and bankrupt them. They have an asset, and they want to convert it to some other kind of asset. It often has very little to do with whether the business is failing. Essentially, it's arbitrage. "Can be arbitraged" is not the same as failing. You can talk about things like "efficiency", but the problem with that is that the metric being used to measure efficiency is laughably simplistic - deliberately so, it's just a way to justify socially irresponsible behavior.
- mlinhares 2y ago
  And that's the reason they're being gutted. They're not crazy growth businesses anymore but have enough cash flow and real estate to make it profitable to be bled to death by these vultures.
- daft_pink 2y ago
  Also, the way that Macy’s leadership talks about the business and the merger’s they’ve pursued, they consider the business to be a “toll bridge”, where they are the only large scale department store in America and thus if you want certain premium fashion goods to have distribution throughout the United States, you have to sell to them in a way that they can generate a profit. They don’t seem to care about the customer at all and there stores are very rundown and not well maintained. It doesn’t feel like a luxury. They seem focused on selling premium fashion brands on their distribution network with location numbers. They don’t care about anything else.
- legitster 2y ago
  Corporate raiders only targeted "distressed assets". They didn't pay full-price for healthy brands to gut - the whole point was to flip cheap (failing) stores.
  - acdha 2y ago
    Their goal is a quick profit. That can be a failing business but it can also be a business which isn’t as profitable as Wall Street investors want and has salable assets. The debate between short term and long term value is a famous example of how priorities shift based on the investors’ timeframe.
- philwelch 2y ago
  If a business’s assets are more valuable than the business itself, it’s a bad business.
  - xethos 2y ago
    On a short enough time frame, the golden egg currently inside the goose is more valuable than the goose itself. The problem comes when you kill the long-term profits trying to get an immediate return. Thinking you can make more money in the short term (for example, by selling real estate) routinely kills the ability to earn a profit long term (which is now eaten by rent on land you used to own).
- bhouston 2y ago
  > I don't think department stores are failing because they're a bad business. I think they're failing because they're being gutted by corporate raiders for their real estate assets. I think you are confusing cause and effect at least the case I know of, Sears. Because Sears' core business was dying, because of Amazon, the best way to get value out of it was to raid its real-estate assets. It may have hastened Sears' demise, but it probably was the smartest thing to do from a business standpoint.
  - ghaff 2y ago
    A lot of people imagine that private equity etc. is scooping up successful businesses and running then into the ground. A company like Sears was a confused mess when they were bought.
- ryukoposting 2y ago
  Yep. The department store model still makes sense in Nordstrom's target price bracket. The whole point of a physical store in the 21st century is that it can provide a hands-on, in-person experience that an online store can't. Nordstrom sells premium products where that kind of experience is worthwhile. I don't need a physical store to compare two different 6-foot USB cables. I do need a physical store for a suit, or a nice pair of shoes, or cologne.
  - toofy 2y ago
    > I don't need a physical store to compare two different 6-foot USB cables. i’ve had the opposite experience. the number of times i’ve received knockoff usb cables is crazy. or misleading specs from their amazon “store” pages, cables that just die in a week, usb charging bricks that don’t have the charging power they claim, etc… sure, amazon exchanged them, but at that point the convenience of ordering online has gone up in smoke. haven’t had the same problem if i just buy a cable from the local camera shops where they’ve vetted which cables they carry. buy it and it just works.
    - ryukoposting 2y ago
      Huh, I've had much better luck, often buying from shadier places. I've bought a couple dozen cables from $CHINESE_RETAILER and they've all met the listed speed/power specs. I like to think I have an eye for spotting the passable items in an ocean of dropshipped sludge, but I'm not omnipotent. I do have an American brand that I'll order cables from if my money isn't paying for it.
neom 2y ago
If they can go back to their roots with digital, maybe. They would need to figure out how to do a "ssense + crate and barrel + sephora" under one online banner property. As far as I can think, nobody has really nailed the high end department store online have they?
- ajmurmann 2y ago
  Would that work online? A lot of these goods I want to see in person and ideally touch before purchase
  - neom 2y ago
    I think it would be best served coupled, so their physical locations would basically turn into try-on/look at only mostly, kinda like early wably parker stores? the IRL stuff would be thin layer retail, experiences, coffee shop etc, but you would mostly buy, buy, buy again online. I think it could work if it was well executed!
notatoad 2y ago
>Nordstrom Canada failed Of the 13 stores they opened in canada, 7 were the "nordstrom rack" discount brand, which is really not nordstrom. IIRC they were actually some of the old stores from the failed Target expansion, and they felt like failed Target stores. It's not a surprise that they failed.
- Marsymars 2y ago
  > Of the 13 stores they opened in canada, 7 were the "nordstrom rack" discount brand, which is really not nordstrom Though it's not like these all served different geographic markets - e.g. My local Nordstrom Rack was a 10 minute drive from my local Nordstrom. FWIW my local Nordstrom Rack was an old Future Shop location. Now it's a Marshalls.

whateveracct 2y ago

Nordstrom has been pretty steady as-is though. It's still one of the few brick and mortar stores I actually go to. Also, their online shopping is pretty solid as well. I always use them for gifts. I think they buffed it up during the pandemic and its paid dividends.

internet101010 2y ago
The only time I will set foot in a mall is to go get a new suit/jacket or something at Nordstrom. It's at the nice halfway point between the slop and Neimans and they can turn it around same day for $25.

mitthrowaway2 2y ago

I don't think department stores are failing because they're a bad business. I think they're failing because they're being gutted by corporate raiders for their real estate assets.

flyingpenguin 2y ago
I disagree, I think they are bad business. I have come to absolutely detest online shopping. I have to return so much stuff, live with so many things that I don't actually love, generate sooooo much trash, and spend hours on hours researching everything because I can't hold it in my hand. Then I walk into REI and ask them if I can try on a size 9 wide of a running shoe. They tell me they don't have it, so I ask them if they have any wide... they don't have a single wide shoe. Then I ask what they have and they say "Ohh we have 200 of the exact same shoe in the exact same size in stock" And then I go order 5 different 9-wide shoes on amazon and return 4....
- ajmurmann 2y ago
  I understand this in part is an issue with the fashion industry. AFAIK you might order 100 green S, 100 red M and you get 150 blue L and 50 red M (simplified example). Haven't done anything related to this in over ten years though. Things might have gotten better and depend on your scale/leverage.
- AzzieElbab 2y ago
  Consider yourself lucky. My feet are not just wide. I wear 10.5 size and have high arches.
  - selimthegrim 2y ago
    Shoe twin, lay me a trail of breadcrumbs to follow (I actually do wear New Balance as per the comments below)
- luckylion 2y ago
  > I have to return so much stuff, live with so many things that I don't actually love, generate sooooo much trash, and spend hours on hours researching everything because I can't hold it in my hand. I hate the research part, especially Amazon hasn't improved their system since the late 2000s. I'm sure lots of great improvements on the logistics and business-development side, but the store feels like hobby project and "we couldn't make filtering work, so whatever". But on the trash part: you generate visible trash. But if you frame it slightly differently: the mall you'd go to needs to be built and heated and fully staffed, and thousands of cars need to drive there etc etc, and that consumes a lot of resources. It's just not visible, and with online-shopping it is. But I'm pretty sure online-shopping is more efficient even if you have to return 4 out of 5 shoes.
  - malfist 2y ago
    Didn't you see? Amazon improved it by putting the option to have an AI pick out the "best" of 2,000 identical items Amazon is actively killing the usefulness of their store in a race to beat ali express and temu to the bottom
ajmurmann 2y ago
If they cannot generate enough profits to even justify holding on to the real estate rather than putting the real estate to some other use, is that meaningfully different from failing?
- well_actulily 2y ago
  Anecdotally, but it seems like a lot of these sites that once hosted these department or big box stores don't wind up getting redeveloped. At best, they might be home to a Spirit Halloween for a couple months out of a year. Having to compete with online retailers is certainly a challenge, but it doesn't seem like what private equity does to these legacy companies benefits anyone but their investors' desire for short-term profits.
  - deleted 2y ago
    [deleted]
- antonvs 2y ago
  Many private equity firms are perfectly happy to extract cash from viable businesses and bankrupt them. They have an asset, and they want to convert it to some other kind of asset. It often has very little to do with whether the business is failing. Essentially, it's arbitrage. "Can be arbitraged" is not the same as failing. You can talk about things like "efficiency", but the problem with that is that the metric being used to measure efficiency is laughably simplistic - deliberately so, it's just a way to justify socially irresponsible behavior.
mlinhares 2y ago
And that's the reason they're being gutted. They're not crazy growth businesses anymore but have enough cash flow and real estate to make it profitable to be bled to death by these vultures.
daft_pink 2y ago
Also, the way that Macy’s leadership talks about the business and the merger’s they’ve pursued, they consider the business to be a “toll bridge”, where they are the only large scale department store in America and thus if you want certain premium fashion goods to have distribution throughout the United States, you have to sell to them in a way that they can generate a profit. They don’t seem to care about the customer at all and there stores are very rundown and not well maintained. It doesn’t feel like a luxury. They seem focused on selling premium fashion brands on their distribution network with location numbers. They don’t care about anything else.
legitster 2y ago
Corporate raiders only targeted "distressed assets". They didn't pay full-price for healthy brands to gut - the whole point was to flip cheap (failing) stores.
- acdha 2y ago
  Their goal is a quick profit. That can be a failing business but it can also be a business which isn’t as profitable as Wall Street investors want and has salable assets. The debate between short term and long term value is a famous example of how priorities shift based on the investors’ timeframe.
philwelch 2y ago
If a business’s assets are more valuable than the business itself, it’s a bad business.
- xethos 2y ago
  On a short enough time frame, the golden egg currently inside the goose is more valuable than the goose itself. The problem comes when you kill the long-term profits trying to get an immediate return. Thinking you can make more money in the short term (for example, by selling real estate) routinely kills the ability to earn a profit long term (which is now eaten by rent on land you used to own).
bhouston 2y ago
> I don't think department stores are failing because they're a bad business. I think they're failing because they're being gutted by corporate raiders for their real estate assets. I think you are confusing cause and effect at least the case I know of, Sears. Because Sears' core business was dying, because of Amazon, the best way to get value out of it was to raid its real-estate assets. It may have hastened Sears' demise, but it probably was the smartest thing to do from a business standpoint.
- ghaff 2y ago
  A lot of people imagine that private equity etc. is scooping up successful businesses and running then into the ground. A company like Sears was a confused mess when they were bought.
ryukoposting 2y ago
Yep. The department store model still makes sense in Nordstrom's target price bracket. The whole point of a physical store in the 21st century is that it can provide a hands-on, in-person experience that an online store can't. Nordstrom sells premium products where that kind of experience is worthwhile. I don't need a physical store to compare two different 6-foot USB cables. I do need a physical store for a suit, or a nice pair of shoes, or cologne.
- toofy 2y ago
  > I don't need a physical store to compare two different 6-foot USB cables. i’ve had the opposite experience. the number of times i’ve received knockoff usb cables is crazy. or misleading specs from their amazon “store” pages, cables that just die in a week, usb charging bricks that don’t have the charging power they claim, etc… sure, amazon exchanged them, but at that point the convenience of ordering online has gone up in smoke. haven’t had the same problem if i just buy a cable from the local camera shops where they’ve vetted which cables they carry. buy it and it just works.
  - ryukoposting 2y ago
    Huh, I've had much better luck, often buying from shadier places. I've bought a couple dozen cables from $CHINESE_RETAILER and they've all met the listed speed/power specs. I like to think I have an eye for spotting the passable items in an ocean of dropshipped sludge, but I'm not omnipotent. I do have an American brand that I'll order cables from if my money isn't paying for it.

neom 2y ago

If they can go back to their roots with digital, maybe. They would need to figure out how to do a "ssense + crate and barrel + sephora" under one online banner property. As far as I can think, nobody has really nailed the high end department store online have they?

ajmurmann 2y ago
Would that work online? A lot of these goods I want to see in person and ideally touch before purchase
- neom 2y ago
  I think it would be best served coupled, so their physical locations would basically turn into try-on/look at only mostly, kinda like early wably parker stores? the IRL stuff would be thin layer retail, experiences, coffee shop etc, but you would mostly buy, buy, buy again online. I think it could work if it was well executed!

notatoad 2y ago

>Nordstrom Canada failed Of the 13 stores they opened in canada, 7 were the "nordstrom rack" discount brand, which is really not nordstrom. IIRC they were actually some of the old stores from the failed Target expansion, and they felt like failed Target stores. It's not a surprise that they failed.

Marsymars 2y ago
> Of the 13 stores they opened in canada, 7 were the "nordstrom rack" discount brand, which is really not nordstrom Though it's not like these all served different geographic markets - e.g. My local Nordstrom Rack was a 10 minute drive from my local Nordstrom. FWIW my local Nordstrom Rack was an old Future Shop location. Now it's a Marshalls.