Stores Are Closing, Bankruptcies Are Rising and the Old Retail Model No Longer Works

By Sabrina Pineda

Life News Today, Reporter

In 2026, the United States is going through one of the most complex times for retail since the pandemic. It is not just about stores that close due to bankruptcy, but a readjustment of the traditional model, where the physical store ceases to be the center of the business and begins to function as part of a broader network that includes logistics, e-commerce, customer data and financing. The pressure is felt in multiple segments, from luxury to discount, and forces historic chains to reduce their footprint or reorganize under bankruptcy courts.

One of the most emblematic cases this year is Saks Global, owner of Saks Fifth Avenue, Neiman Marcus and Bergdorf Goodman. Court records show the company filed for Chapter 11 on Tuesday, Jan. 13, 2026, in a restructuring designed to maintain operations while reorganizing its financial burden. In court filings, the company reported assets and liabilities in the range of $1 billion to $10 billion, additionally reporting a financed debt of about $3.4 billion. At the same time, the company reported that it has secured capital to sustain itself during its restructuring, and stated that its stores and e-commerce platforms continue to operate while the bankruptcy case is managed.

That point is key to understanding what is happening in the sector: a bankruptcy does not always mean immediate closure. In Chapter 11, the goal is usually to buy time to renegotiate obligations, straighten out payments to suppliers, and reconfigure inventories and operating costs with court oversight. Even so, the fact that a luxury company reaches that stage reflects a reality that is already hitting general commerce: when cash flow narrows and the cost of financing rises, the model of large stores and extensive store networks loses room for maneuver.

The context of 2026 is also connected to a cumulative list of iconic brands that, for various reasons, were unable to sustain their cost structures or debt. Lord & Taylor closed definitively in 2020 after decades as a benchmark for traditional commerce. Other chain stores went into restructuring in previous years or drastically reduced their presence, while the market moved towards more digital options and towards smaller, specialized or experiential physical formats. In parallel, companies such as Macy's confirmed plans for phased closures, with the corporate argument of concentrating investment in "strategic" locations and reducing underperforming stores.

However, not all difficulties translate into legal bankruptcies. In 2025, several chains opted for "managed" closures of hundreds of stores, without going to court, as a way to cut fixed costs and prevent an extensive operation from becoming a burden. That kind of decision usually appears when internal analysis shows that part of the store network doesn't cover rent, energy, staff, insurance and shrinkage losses as efficiently as before. When the margin falls, the store ceases to be an asset and becomes a contractual obligation.

Within this panorama, the causes are repeated, but they operate as a connected system. The first factor is the persistent shift towards online shopping. This is not an abstract phenomenon, but a measurable one. Federal Census data shows that in the third quarter of 2025, retail e-commerce sales accounted for about 15.8 percent of the total, with online sales estimated at $299.6 billion for that quarter. This percentage implies that a significant portion of the spending that previously ended up in a physical aisle is now materialized through digital platforms, where the cost per transaction is distributed differently and where the physical store competes with fast deliveries, price comparators and immediate availability. For many chains, the question is no longer whether they should sell online, but whether their physical structure is aligned with the actual volume that the customer wants to buy inside the premises.

The second factor is the sustained increase in operating costs. In traditional commerce, a significant part of the expenses does not depend on how many customers enter, but on keeping the premises open: rent, maintenance, electricity, air conditioning, security, inventory, internal logistics and payroll. When a store loses traffic, those costs don't fall in the same proportion. In addition, retail depends on seasons, promotions, and inventory turnover. If demand becomes spotty, the business faces the risk of accumulating inventory in a cycle where cash is needed to pay suppliers, financing, and day-to-day operations.

The third factor is the indebtedness inherited from previous expansions. Many chains grew in times of cheaper credit, when opening more stores seemed the logical way to increase presence. In the current environment, this indebtedness weighs more. In the case of Saks Global, the financial structure described in the judicial process and the use of financing to operate during the restructuring illustrate a pattern: when a company is saddled with high debt and needs fresh resources to sustain inventory and essential payments, reorganization becomes a tool to avoid an abrupt shutdown of operations.

Added to this is a consumer condition that influences retail even when it is not seen directly at the counter. Federal data show changes in consumer credit, including changes in revolving credit, and the evolution of delinquencies in credit card loans according to public series. These indicators help explain why some families cut back on discretionary spending, seek more aggressive discounts, or put off high-value purchases like furniture and household items. When the consumer adjusts, retail feels the impact first in categories that rely on confidence and disposable income.

That is why even savings-oriented brands, which historically resisted periods of inflation better, are reviewing their model. Discounting also faces digital competition, especially when online platforms offer dynamic pricing and fast delivery. At the same time, the optimization of physical stores forces you to choose locations with stable traffic, sustainable contracts, and the ability to operate as a pick-up point, returns, or micro-logistics center. In other words, the store does not disappear, but it is redefined: fewer meters, more efficiency, more technological integration and more dependence on data to manage inventory and local demand.

This context, far from signifying the end of retail, confirms a profound transformation. What collapses is not the idea of selling products to the public, but the assumption that an extensive network of stores alone guarantees growth. In 2026, the market will reward those who combine physical expertise with solid digital operation, efficient logistics, and a cost structure that can withstand rapid changes in consumer behavior. Bankruptcies and mass closures work as a sign of adjustment: retail continues, but the model changes, and the cost of not adapting has become too high.