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January is Store Closing Month – 2025 Doesn’t Deviate

Manus Clancy
January 27, 2025 3 mins

By: Head of Data Strategy at LightBox, Manus Clancy

Historically, January has been a heavy month for retail store closings. The timing makes sense. Retailers try to squeeze one more season of holiday sales before shutting down underperforming stores.

January 2025 was no exception as Macy’s and Kohl’s both announced dozens of store closings and one big announcement in San Francisco put another nail in the coffin of a big Bay Area property.

Between 2016 and 2020—the height of the so-called “retail apocalypse”—landlords and lenders could expect hundreds of stores closing announcements early each year.  As department store operators and in-line retailers tried to right size in the face of the e-commerce boom, those announcements would come in waves.

Starting in 2021, the pace of store closings began to slow. After five years of shedding underperforming locations, major downsizing efforts became less frequent. However, by the end of 2024, shifts in consumer behavior post-COVID and rising debt levels pushed total U.S. store closures to their highest annual level since 2020. January 2025 marked the first significant uptick in closures in several years.

Macy’s Closure Announcements

Macy’s provided the biggest jolt to the market, announcing it would be closing 66 stores. This was part of an ongoing three-year program during, which the firm expects to shutter 150 “underproductive” stores. This round of store closings was heavily tilted toward two categories: furniture stores and locations in B/C class malls.

Map of the announced Macy’s store closings

Bay Area Mall Sees More Troubles

In San Francisco, Bloomingdale’s (owned by Macy’s Inc.) announced it would be closing its 330,000 square foot location at the San Francisco Centre (now known as Emporium Centre) in the spring.

That same location lost another anchor tenant—Nordstrom— in August 2023.

The loss of Nordstrom started a downward spiral for the property, which included a default on a big CMBS loan.

Kohl’s Store Closures

The other large store closing announcement was made by Kohl’s, which revealed it would be closing 27 stores and one California fulfillment center.

Map of the announced Kohl’s store closings

On the LightBox CRE weekly podcast, we have repeatedly said “the era of big store closing announcements is over.” After seeing thousands of store closings between 2016 and 2020—including thousands from Sears, Macy’s, JC Penney, Bon Ton, and other major department store operators— we feel like most retailers are now “right sized.” (Lest we not forget the liquidations of Sports Authority and Toys R Us among hundreds of retailers that went belly up).

We stand by that opinion, but that doesn’t necessarily mean we won’t see announcements like the recent Macy’s and Kohl’s ones every January. And given the record-low vacancy rates in retail that hover around 4%, the wave of closures is matched with high demand to backfill vacated space with expansions by quick-service food, fitness, healthcare, and grocery tenants.

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