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The death of department stores

Data: FactSet; Chart: Chris Canipe/Axios

In a sign of the times, the Lord & Taylor department store has closed its flagship New York City location; the building will become a WeWork.

The big picture: Other department stores are struggling too, not least Sears, which is in bankruptcy and is also this close to liquidation. (Sears includes Kmart, which declared bankruptcy in 2002.)

  • Macy's stock imploded this week after the department store reported disappointing holiday sales and said it expects sales to be flat in 2019.
  • Other department stores followed Macy's shares south: JC Penney closed Friday at a mere $1.32 per share, down from $11.85 in early 2016 and a high of $87 in 2007.
  • Meanwhile, Amazon is eyeing shuttered Sears and Kmart locations as it looks to to expand the reach of its Whole Foods subsidiary.

The backdrop: As Deloitte detailed in an influential 2017 report on "the great retail bifurcation," brick-and-mortar retail as a whole is not suffering. But all of the growth is either at the low end (stores competing purely on price, like Walmart or 99-cent stores) or at the high end (stores offering premium experiences, like free beer for people who pick up their Nordstrom orders in person). Stores in the middle, attempting to be all things to all people, are in a long secular decline.

Go deeper: Axios has a great deep dive on the future of retail.

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