The U.S retail sector is entering a turbulent chapter in 2025, with closure announcements outpacing even the worst period of the COVID-19 pandemic.
According to Coresight Research, up to 15,000 retail locations across the country could close this year, double last year’s 7,325 closures.
Even established brands, from department stores to specialty retail chains, are re-examining their brick-and-mortar footprint as economic pressures mount and digital commerce rises.
Job Cuts Surge
Behind every closed store lies a wave of lost jobs, and 2025 is seeing an 80% spike in announced retail job cuts compared to the same period last year. Analysts say nearly 76,000 retail roles were eliminated from January to May, the second-highest total of any sector.
Contributing factors include tariffs, weak consumer spending, and the ripple effects that each closure has on local economies.
“Companies are spending less, hiring has slowed, and layoff notices are being issued,” notes Andrew Challenger of Challenger, Gray & Christmas.
Century-Old Struggle
Nordstrom’s journey reflects broader retail disruptions, stretching back to its origins in 1901 as a family-owned shoe store. Over more than a century, it grew into one of the country’s premier luxury department store chains, weathering countless market cycles.
Yet, like many other traditional retailers, Nordstrom also grapples with shrinking foot traffic, sudden shifts in customer loyalty, and increasing digital competition.
Now, its very longevity faces a stress test common across the sector: adapting tradition while reining in costs.
The Squeeze Intensifies
Rising raw material prices, tariff spikes, and unpredictable supply chains have hammered retail profit margins well into 2025.
Apparel, footwear, and home goods are among the most impacted, as global shipping disruptions and logistics bottlenecks raise input costs and delay inventory.
Inflation has forced retailers into a tough spot, as they try to keep prices palatable while not cutting back on service or quality. Industry-wide, a number of brands are turning to technology, such as AI-driven inventory management, to predict demand and avoid deeper losses.
Closures Locked In
Nordstrom’s latest move will see the closing of its Saint Louis Galleria store in Missouri on August 24, followed by its Santa Monica Place location in California on August 26. Both locations have served shoppers for years, but are now casualties of broader belt-tightening.
Spokespeople for the company reiterated that the decisions are never easy, and pledged to help affected staff find new roles at other Nordstrom outlets or through additional support programs. These targeted closures come amid a growing list of big-name retail exits in 2025.
Regional Fallout
The communities of St. Louis and Santa Monica are bracing for the closing of the flagship Nordstrom stores, which have long anchored local shopping centers and provided hundreds of jobs.
In St. Louis, Dick’s House of Sportswill reportedly move into the soon-to-be-vacant Nordstrom space, signaling a shift in consumer focus toward experience-based retail.
In Santa Monica, the closure follows a spate of retail exits from the area, raising questions about the long-term vitality of high-end shopping districts.
Real Faces, Real Shifts
For employees, the closures are deeply personal. Nordstrom maintains that it is working to place as many affected employees as possible in nearby locations, though such transitions are rarely seamless.
As one Nordstrom spokesperson stated, “Decisions like this are never easy, and we recognize the effect they have on our team members.”
Employees and shoppers in both cities have expressed disappointment, noting the loss not just of jobs but of a community touchstone.
Competitor Moves
Nordstrom is not alone. Macy’s announced it would close 66 stores in 2025 as part of its “Bold New Chapter,” aiming for a total of 150 closures through 2026, most of them in declining mall locations.
JCPenney has announced eight store closures this year based on either expiring leases or poor sales, and Kohl’s and At Home have taken similar actions.
Retailers increasingly cite “optimization strategies” and digital channel investments as keys to future survival.
Data-Driven Retreat
Analysts warn that these closures reflect a larger contraction. Brick-and-mortar closures are now being compounded by rising consumer preference for experiences over goods, increased theft, and powerful digital rivals like Shein and Temu.
Value-oriented retailers, such as Aldi and Dollar General, are bucking the trend by expanding. Experts say some closures are strategic, but many of them are indicative of fundamental industry change. AI, loyalty programs, and hybrid digital-physical experiences are set to shape what comes next.
Retail’s Next Chapter?
With job cuts soaring, headline brands retreating, and costs rising, the outlook for physical retail in 2025 remains volatile.
Still, many industry watchers believe reinvention is attainable: through streamlined footprints, customer-centric technology, and nimble operational changes.
The question for retailers — and shoppers — is how quickly legacy brands can adapt and whether the downturns and malls they once anchored will recover their sparkle or fade in the glow of online convenience.