Macy’s and Nordstrom enter the next decade carrying very different burdens and very different opportunities. One is a mass-market icon trying to shrink with grace; the other is a specialty department store trying to grow without losing its service DNA. For US retail and e-commerce teams, comparing these two chains side by side is one of the cleanest ways to understand where department stores are heading. This piece breaks down the state of retail through the lens of two anchor brands and what their playbooks will likely look like through 2035.
The contrast is sharper than most casual readers assume. Macy’s operates roughly 480 namesake stores plus Bloomingdale’s and Bluemercury, generating well over $20 billion in annual revenue. Nordstrom runs about 90 full-line stores and roughly 240 Nordstrom Rack outlets, with revenue closer to $14 billion. Same industry, same headline pressures, very different mechanical exposures to mall traffic, private label, and luxury cycles.
Investors, vendors, mall landlords, and even municipal economic development teams all use these two chains as bellwethers. When Macy’s opens a renovated flagship, the local press coverage signals confidence in the surrounding district. When Nordstrom announces a new full-line location, brokers in that submarket reprice nearby properties within weeks. Few US retailers carry that kind of structural influence, which is why understanding their decade-out strategies matters well beyond their immediate shareholders.
In short
- Macy’s strategy centers on a “Bold New Chapter” plan: closing about 150 underperforming stores by 2026, doubling down on Bloomingdale’s and Bluemercury, and treating remaining Macy’s flagships as experience hubs.
- Nordstrom’s strategy leans on a premium service model, the Rack as a growth engine, and a potential family-led take-private deal that could reshape capital allocation through the late 2020s.
- Shared playbook items include loyalty program redesign, supply chain digitization, vendor-direct fulfillment, and curated private label expansion.
- Where they diverge: Macy’s optimizes for footprint reduction and margin, Nordstrom optimizes for service depth and off-price scale.
- For independent retailers, the lesson is that strategy is mostly about choosing what to give up, not what to add.
Why Macy and Nordstrom matter to US retail in 2026
Department stores still account for a meaningful slice of US apparel, beauty, and home goods sales, even after two decades of decline. According to US Census Bureau retail trade data, the “department store” category does not fully capture brands like Macy’s anymore, but anchored chains still influence pricing, vendor terms, and mall economics across the country. When Macy’s signals it will close a tier of stores, mall operators and brand partners react within quarters, not years.
Nordstrom plays a smaller but disproportionately influential role. Its full-line stores set service expectations for the high end of mainstream retail, and Nordstrom Rack has become a critical clearance channel for premium brands that refuse to discount on their own sites. The two companies together still shape how millions of US shoppers experience apparel and beauty discovery.
Beyond their direct revenue, both chains function as cultural reference points. Coverage of their quarterly results gets recycled into broader narratives about the death (or revival) of brick and mortar. Anyone watching how breaking retail news travels from wire to feed in minutes can see how a single Macy’s earnings call can move sentiment across the whole mall ecosystem.
That outsized signaling effect is exactly why the next decade matters. If Macy’s executes its store-closure plan cleanly and Bloomingdale’s keeps growing, the narrative shifts toward selective department store survival. If Nordstrom goes private and reinvests aggressively, the narrative shifts toward family-controlled, service-led retail as a viable long-term model. Both outcomes are plausible, and they are not mutually exclusive.
It also matters because vendors, brand partners, and DTC entrants need to allocate scarce wholesale capacity intelligently. A clothing brand deciding between investing in deeper Macy’s distribution or pursuing a Nordstrom relationship is making a decade-shaping decision about positioning, margin, and brand equity. The right answer is rarely “both equally,” and the analysis that supports that decision is usually thinner than executives realize.
Origins and how each chain built its identity
Macy’s traces its roots to 1858 in New York, eventually consolidating dozens of regional department store nameplates (Marshall Field’s, Filene’s, Robinsons-May, Hecht’s) under the Federated Department Stores umbrella in the 2000s. That consolidation gave it scale but also baked in a fragile assumption: that one national brand could replace dozens of beloved local ones. Many of those local nameplates were quietly retired between 2005 and 2010, and the resulting brand homogenization is still being absorbed by suburban markets.
Nordstrom started in 1901 as a Seattle shoe store founded by John W. Nordstrom, and remained family controlled through every subsequent generation. Its identity was built around service stories: the apocryphal tire return, the personal stylist program, the reliable returns policy. Service became the brand, which is why Nordstrom never grew as aggressively as Macy’s even when public markets rewarded scale.
This origin gap explains a lot of today’s strategic choices. Macy’s needs to convince investors it can shrink without bleeding revenue. Nordstrom needs to convince investors it can preserve service quality while expanding the lower-margin Rack format. The two chains are solving genuinely different problems, even when the press treats them as interchangeable.
For background on the corporate histories, Macy’s, Inc. on Wikipedia traces the consolidation arc in useful detail. The Nordstrom story is shorter on Wikipedia but easier to follow, since the family structure has stayed relatively stable across more than 120 years.
Comparing the strategies side by side
The cleanest way to see the contrast is in a single table. The numbers below are approximate based on 2024 and 2025 disclosures, but they capture the structural differences that matter for the next decade.
| Dimension | Macy’s | Nordstrom |
|---|---|---|
| Full-line stores (2026) | About 350 Macy’s nameplate (down from 480) | About 90 Nordstrom full-line |
| Off-price / value banner | Macy’s Backstage (in-store concept) | Nordstrom Rack (about 240 standalone) |
| Luxury banner | Bloomingdale’s | Nordstrom full-line top tier |
| Specialty / beauty | Bluemercury | In-store beauty concierge |
| Annual revenue (approx.) | $22 to $23 billion | $14 to $15 billion |
| Digital share of sales | Roughly 33 percent | Roughly 37 percent |
| Private label exposure | High (INC, Alfani, Style & Co.) | Moderate (Halogen, Treasure & Bond) |
| Capital structure | Publicly traded, activist scrutiny | Family-led, potential go-private path |
| Strategic posture | Selective shrink, premium tilt | Service depth, Rack scale |
The two columns rarely line up, and that is the point. When analysts say “the department store sector,” they are blurring categories that behave very differently. A vendor planning a sell-in strategy for 2027 needs to look at each chain on its own terms, not as a single bucket.
How each company is investing for the next decade
Macy’s “Bold New Chapter” plan, announced in early 2024 and refined through 2025, has three pillars worth understanding: store rationalization, luxury investment, and operational simplification. The store rationalization piece is the headline, with about 150 underperforming Macy’s nameplate locations slated to close by the end of fiscal 2026. The remaining roughly 350 stores will get capital investment to upgrade fitting rooms, beauty halls, and customer service zones.
The luxury piece is arguably more important. Bloomingdale’s has been quietly outgrowing the Macy’s nameplate for several years, and the plan signals that capital will flow toward Bloomingdale’s openings and Bluemercury expansion (small-format beauty stores in upscale neighborhoods). If Bloomingdale’s can grow from roughly 30 full-line stores to 40 or 45 by 2030, Macy’s, Inc. starts to look less like a struggling mass merchant and more like a balanced portfolio.
Operational simplification is the least exciting pillar but probably the most important. It covers supply chain digitization, vendor portal modernization, store labor scheduling, and inventory accuracy. None of that makes headlines, yet it is the discipline that determines whether the other two pillars can actually be funded.
Nordstrom’s investment story is structurally different. The company has been weighing a take-private deal led by the Nordstrom family in partnership with private equity (Liverpool, the Mexican retailer, has been part of those discussions). If that deal closes, Nordstrom can take a longer horizon on Rack expansion, technology spend, and full-line store remodels without quarterly earnings pressure. If it does not close, expect a continuation of the slower, more cautious investment cadence that has defined recent years.
Either way, the Rack is the engine. Nordstrom Rack roughly doubled its store count over the past decade and is on track to keep adding 20 to 25 net new stores per year through 2028. That makes Rack the largest off-price treasure-hunt chain after TJX and Ross, with a brand mix that skews more premium than either competitor.
Nordstrom is also quietly upgrading its full-line stores. Rather than building new flagships, the company is investing in remodels and concept floors (curated luxury halls, dedicated denim concepts, expanded beauty advisor stations). The cost per square foot for these remodels is significant but absorbs less risk than greenfield builds, and it lets Nordstrom test format ideas before committing to scale.
The third investment area for both companies is technology. Both have been migrating away from monolithic legacy commerce platforms toward composable architectures that allow faster iteration on personalization and search. Macy’s has been particularly vocal about modernizing its data infrastructure, while Nordstrom has emphasized recommendation engines tuned for premium catalogs. Neither company will out-engineer Amazon, but both have closed enough of the gap to compete on differentiated experience rather than raw speed.
For deeper context on how anchor strategies ripple through US shopping center economics, see our companion piece on mall anchor tenants in the post-mall era, which traces how landlords are recalibrating around chains like Macy’s and Nordstrom.
Where digital, omnichannel and loyalty fit in
Both chains crossed the meaningful digital threshold years ago. Roughly a third of Macy’s sales and a bit more than a third of Nordstrom’s now come through digital channels. The next decade is less about pushing that share higher and more about making the unit economics of digital fulfillment work without cannibalizing store labor productivity.
Macy’s has invested heavily in ship-from-store, with most full-line locations now functioning as small fulfillment nodes. The challenge is balancing online order picking with in-store customer service during peak periods (think the Saturday before Mother’s Day or any December weekend). Solving that scheduling math is unsexy but worth real margin points.
Nordstrom approaches the same problem with a service-first lens. Its “Nordstrom Local” concept, small storefronts that do not carry merchandise but offer alterations, returns, and order pickup, was an early bet on service-only retail nodes. The bet has not scaled to hundreds of locations, but it shaped how the company thinks about the future of small-format retail.
Loyalty is the bigger fight. Macy’s Star Rewards and Nordstrom’s “The Nordy Club” both run on tiered structures, but Nordstrom’s loyalty data is widely considered cleaner and more actionable. Expect both chains to invest in machine learning driven personalization through 2030, with Nordstrom likely keeping its lead in service-touch personalization (think stylists recommending items based on browse history) and Macy’s pushing harder on volume-based promotional efficiency.
One underappreciated digital fact: both companies have meaningful private credit card programs, and both have renegotiated those programs in recent years. Credit income is a quietly important profit driver, and the contracts behind it shape how aggressively each chain can discount without bleeding margin.
Common mistakes when reading retail strategy headlines
Coverage of department store strategy tends to fall into a few traps. The first is treating store closures as automatically negative. Closing 150 underperforming Macy’s stores can be the most value-creating thing the company does this decade if the closures release capital and management attention. Headlines rarely capture that nuance, but vendor partners and landlords do.
The second trap is conflating Macy’s, Bloomingdale’s, and Bluemercury. They are three different brands with different customers, different vendor relationships, and different real estate strategies. A vendor selling to Bluemercury is in a different game than one selling to mid-tier Macy’s. Lumping them together makes for a tidy story but a misleading analysis.
The third trap is the take-private narrative. A Nordstrom go-private deal is not automatically good for the brand or the customer. It can free up long-term investment, but it also adds leverage and can constrain capex if the operating environment turns. The right question is not “will the deal happen” but “what does the post-deal capital plan look like.” Few outlets get into that level of detail.
Finally, watch out for binary thinking about online versus offline. Macy’s and Nordstrom both operate genuinely omnichannel businesses, with returns flowing between channels and shoppers using one channel to research and another to buy. Any analysis that treats stores and e-commerce as a zero-sum battle is reading the wrong decade.
Examples from US retail and e-commerce
A few recent moves illustrate the strategic divergence. In late 2025, Macy’s confirmed the closure of 64 stores in the first wave of its rationalization plan, including locations in California, Florida, and Texas. The list was deliberately weighted toward malls with declining co-tenant quality, which signals that Macy’s is using closures as a portfolio-quality tool, not just a cost-cutting one.
Bloomingdale’s, in parallel, opened a new full-line store in Nashville and announced two more in growth markets in the Sun Belt. That cadence (closing legacy, opening upmarket) is the cleanest expression of the Macy’s portfolio rebalance you will find.
Nordstrom’s recent moves include the launch of additional Rack stores in mid-sized markets like Boise and Spokane, where full-line Nordstrom presence is unrealistic but Rack pricing fits the local economy. The chain has also experimented with a “Nordstrom Local” relaunch in select urban markets, suggesting the service-node concept may get a second life.
Both companies have also tightened return policies in ways that vendors notice. Free unlimited returns are increasingly rare, and the friction of those changes is being absorbed unevenly across customer segments. Premium customers tolerate small return fees; promotional customers do not, which is itself useful pricing intelligence.
A third strategic example worth highlighting is fragrance and beauty. Macy’s beauty business, including Bluemercury, has held up remarkably well even as apparel has struggled, and the company has leaned into experiential beauty floors as a foot-traffic driver. Nordstrom’s beauty business is structurally tied to its premium service positioning, with beauty advisors and ambassador programs that the mass market simply cannot replicate at scale. Beauty is a category where both chains are over-indexed compared to most US peers, and it is a category where Amazon’s pure logistics advantage matters least.
Athletic footwear and athleisure tell a different story. Nordstrom’s heritage as a shoe retailer gives it a structural edge with brand partners like Nike, On Running, and Hoka, and those relationships shape how new launches roll out. Macy’s has tried to compete in athleisure but has historically been treated as a secondary channel by premium athletic brands. Watching how that imbalance evolves through 2030 will be a useful indicator of whether Macy’s premium tilt is actually working.
For broader cluster context on how department stores are reinventing themselves, the companion analysis on why department stores are reinventing themselves in 2026 covers the macro forces that frame both Macy’s and Nordstrom’s choices.
Tools, partners and vendors worth knowing
Several technology and operations partners show up repeatedly in both companies’ strategies. Manhattan Associates and Blue Yonder are the dominant supply chain software vendors at this scale. Salesforce Commerce Cloud and Adobe Commerce surface in front-end stacks, often combined with internal tooling rather than running pure off-the-shelf. Returns management increasingly runs through Optoro or Happy Returns style intermediaries.
For payments and credit, the relevant names are Citi (long-term Macy’s credit card partner, with the relationship restructured in recent years) and TD Bank (Nordstrom’s card partner). The economics of these partnerships are not public in granular detail, but they meaningfully shape promotional cadence and customer acquisition cost in both companies.
On the merchandising side, both chains run sophisticated buyer organizations and use external trend forecasting services. The big shift in the next decade will be the integration of generative AI assistants into the buying workflow, helping merchants synthesize trend signals across social, search, and runway data. Expect quiet but significant productivity gains in merchandising teams between 2026 and 2030.
Independent retailers and DTC brands selling into these chains should track buyer turnover and category restructuring announcements. A category vice president change at either company can shift door counts and reorder timing by an entire season, which matters far more than most outside observers realize.
What independent retailers can learn from the comparison
The most useful takeaway for smaller retailers is not about size; it is about clarity. Macy’s took years to articulate a sharp strategy and is now executing it visibly. Nordstrom has carried the same service-first identity for a century and is now figuring out how to fund it for the next century. Neither story is about adding more; both are about choosing carefully what to keep.
For an independent retailer, the equivalent exercise is honest portfolio rationalization. Which product categories actually generate margin? Which locations or channels are quietly subsidized by the strong ones? Which customer segments are worth investing in, and which are worth letting walk? These are not glamorous questions, but they are the same questions Macy’s is answering at scale.
The omnichannel lesson is also worth absorbing. Even at Nordstrom’s scale, the most valuable shoppers use multiple channels, and the unit economics depend on serving those shoppers well across all of them. A small retailer cannot match Nordstrom’s tech stack, but the underlying principle (treat every channel as part of one customer experience) translates down to any size.
Finally, both companies are quietly betting that physical retail will still matter in 2035. The bet is not that store counts will grow; it is that the remaining stores will work harder per square foot, serve more functions, and contribute more to brand equity. That is a useful frame for any retailer thinking about leases, store labor, and capex for the back half of this decade.
For the broader cluster view of how these dynamics interact across grocery, specialty, and experience retail, the state of retail pillar puts Macy’s and Nordstrom into the wider US landscape and helps anchor strategic decisions in cross-format context.
Frequently asked questions
Is Macy’s going out of business?
No. Macy’s is closing roughly 150 of its 480 namesake stores by the end of fiscal 2026, but the remaining stores plus Bloomingdale’s and Bluemercury still generate well over $20 billion in annual revenue. The store closures are part of a portfolio strategy, not a liquidation. Investors and vendors should expect a smaller, more premium Macy’s, Inc. by 2030.
Will Nordstrom go private?
It is possible. The Nordstrom family, in partnership with Mexican retailer Liverpool, has been exploring a take-private deal valued in the multi-billion-dollar range. As of 2026, the deal had not closed, and the path forward depends on board approval and financing conditions. Even if it does not close, the family is likely to keep pushing for longer-term capital flexibility.
Which is the better department store, Macy’s or Nordstrom?
It depends on what you mean by “better.” Nordstrom is widely regarded as having superior in-store service, broader brand depth in the premium tier, and a cleaner loyalty data foundation. Macy’s offers broader geographic reach, stronger entry-level price points, and the upmarket Bloomingdale’s banner. For value-driven shoppers, Macy’s tends to win; for service-driven shoppers, Nordstrom tends to win.
What is the difference between Nordstrom and Nordstrom Rack?
Nordstrom is the full-line department store, carrying current-season premium brands with full service (alterations, personal stylists, beauty advisors). Nordstrom Rack is the off-price banner, carrying last-season and excess inventory from Nordstrom and other premium brands at 30 to 70 percent off. Rack stores are smaller, more self-service, and located in strip centers rather than malls.
How is Macy’s competing with Amazon?
Macy’s does not try to compete head-on with Amazon on selection or speed. Instead, it leans on curated assortment, beauty and fragrance categories where touch and try still matter, and store-based services like gift wrapping, alterations, and seasonal events. The strategy is to be the destination for categories Amazon serves poorly, not to win on logistics.
What role does private label play in each company’s strategy?
Macy’s has historically leaned heavily on private label brands like INC International Concepts, Alfani, and Style & Co., which support margin but can be more vulnerable to changing fashion preferences. Nordstrom uses private label more selectively, with labels like Halogen and Treasure & Bond filling specific assortment gaps. Both companies are likely to invest more in private label through 2030 as a margin lever.
Are department stores still relevant in 2026?
Yes, though in a narrower role than in 1996. Department stores still account for a meaningful share of US apparel, beauty, and home category sales, and they remain critical for premium brand discovery. The category is consolidating around chains that can execute on premium service (Nordstrom), portfolio premiumization (Macy’s, Inc.), or off-price scale (Nordstrom Rack, Macy’s Backstage). The era of generic mid-tier department stores is largely over.