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What happened to department stores?

The fates of the American middle class and American department stores have always been intertwined.

Department stores, once a symbol of the American middle class, have been declining for years, along with the shopping malls they anchor in communities across the US. Just last year, both the high-end Barneys and the country’s oldest department store, Lord & Taylor, went bankrupt and announced plans to close all their locations.

Then came the coronavirus pandemic, which shocked the economy, hitting lower- and middle-income Americans the hardest by forcing them out of work and deeper into debt, with little or no relief in sight. The crisis also temporarily shuttered most nonessential physical retail stores and kept people at home for months, giving them more reasons than ever before to shop online at e-commerce giants like Amazon or from the smaller direct-to-consumer brands whose ads follow us all around the internet.

As we near the end of 2020, the prognosis for the American department store is grimmer than it’s ever been. The reasons extend far beyond Covid-19 or even the continued rise of online shopping, and have more to do with trends in the American economy that have been shrinking the middle class while enriching the already wealthy. That’s why the decline of these retail giants is something to pay attention to. They employ hundreds of thousands of people and occupy an outsize space in our communities; their gradual disappearance, as well as what is replacing them, tells us something about where we’re headed.

—Samantha Oltman, editor of Recode

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