Department stores evolve, consolidate in digital age.

• Author: Hulsey, Molly

This story first appeared in the May 9 print edition of the GSA Business Report.

Three years into a pandemic some feared would bring death to the department store, behemoths of former Sears properties still litter the state's shopping malls, empty and silent after shuttering in 2018 and 2020.

Belk's fulfillment center in Union County, once a growing economic boon to the rural county, laid off 310 employees and closed its doors on April 30.

And while store openings outpaced closings for the first time since 2014 in 2021, according to Colliers International's 2022 Retail Outlook, those stores were smaller than they ever had been before at an average of 3,000 square feet.

"I haven't heard of, even a hint, of some department store that's going to occupy a new 900,000-square-foot building," Rox Pollard, Collier's vice president of retail services in South Carolina, told SC Biz News.

But not everything is as it seems at least for the department store brands able to flex and adapt.

Macy's, one of the highest performing department stores in the nation, has seen revenue climb from $19.64 billion in 2019 to $25.29 billion in 2022 and continues to rebound to the company's 2017 numbers, according to Companies Market Cap.

Stock value may be a far cry from the $23.49 billion in 2006, but Macy's stocks are still on the move, rising from $1.52 billion in March 2020 to $8.08 billion at the same time in 2022.

Dozens of stores closed throughout 2020 to 2021, according to the company, yet, in an effort to meet the demand for a smaller footprint, many of the 16 stores Macy's did open during those two years were outlet locations or scaled down, off-mall versions of the department store, such as Market by Macy's, Bloomie's and Macy's Backstage.

"There's been ongoing health in the sort of, as they call it, the treasure hunt category, which is the Marshalls, TJ Maxx, Burkes Outlet, Ross stores," Pollard said. "Those have remained popular and continue to have extraordinary sales success I think for two reasons. One, the ever-changing inventory is popular with people and then the price reductions for quality inventory or quality merchandise is very popular."

Successful stores outside the treasure hunt category tend to be higher-end department brands like Nordstrom, Macy's and Dillard's with a focus on quality service and merchandise.

"All of those stores have a pretty robust online presence," he said.

Dillard's stock value has rocketed to prices more than double its...