Ross Stores and TJX Companies, the parent of TJ Maxx, Marshalls, and HomeGoods, just posted blockbuster earnings as bargain hunting becomes the new national pastime.
Their success highlights a stark contrast: Department stores that once defined aspirational shopping are losing ground.
Don’t miss the move: SIGN UP for TheStreet’s FREE Daily newsletter
Just last week both discounters posted significant gains:
- Ross: Sales rose 4.6% to $5.53 billion, with same-store sales up 2%. Earnings per share hit $1.56, topping expectations.
- TJX: Revenue climbed 6.9% to $14.4 billion, while earnings per share came in at $1.10, also beating forecasts.
Both discount retailers credited their growth to shoppers’ demand for value-priced apparel and home goods. With inflation and higher interest rates squeezing wallets, consumers are chasing deals — and off-price chains are reaping the rewards.
Against that backdrop, Nordstrom is closing two more stores within a week.
Its Santa Monica location at the Third Street Promenade shopping district will shut its doors Aug. 26, while its St. Louis Galleria store closed Aug. 24.
Nordstrom retreats in California and Missouri
The company said the closures were driven by profitability concerns and lease negotiations. “We believe we’ll be best able to serve customers in each region by leveraging our surrounding stores and through our digital channels,” a Nordstrom spokesperson told USA Today.
The two closures tell slightly different stories.
In Santa Monica, Nordstrom’s departure underscores the ongoing struggles of the Third Street Promenade, a once-bustling shopping district that has struggled to recover foot traffic since the pandemic.
Related: La-Z-Boy sees a major problem in the housing market
In St. Louis, the decision came down to lease economics: A company spokesperson told KTVI that renewing the agreement at the Galleria mall would be unprofitable.
In St. Louis, Dick’s House of Sports is slated to take over the space, while no replacement has yet been announced for Santa Monica. Nordstrom said affected employees will be offered roles at nearby stores.
The value-first mindset
The closures underline a broader shift in retail. Shoppers haven’t stopped buying clothes, shoes, or home goods; they are just reluctant to pay department-store prices.
The dynamic has played directly into the strengths of off-price retailers. Ross and TJX thrive on the “treasure hunt” model, where shelves are stocked with a constantly changing assortments of brand-name goods.
Related: Home Depot and Lowe’s sound the alarm for homeowners
Some apparel brands, like Joe’s Jeans or Sam Edelman shoes, can be found at both Nordstrom and TJ Maxx, giving shoppers similar options at different prices.
Even higher-income households are “trading down,” a trend that has helped Ross and TJX grow their customer base beyond traditional bargain hunters. In this environment, paying full price at Nordstrom feels unnecessary for many shoppers.
Nordstrom’s mixed signals
The irony is that Nordstrom has shown signs of resilience in the past year.
Before being taken private in May 2025 under a $6.25 billion deal with the Nordstrom family and Mexican retailer El Puerto de Liverpool, the company reported strong results:
- Comparable sales rose 4.7% year over year in its fiscal fourth quarter.
- Nordstrom sales were up 5.3%, and Nordstrom Rack sales went up 3.5%.
The retailer also has expansion plans, with at least 24 new Nordstrom Rack locations announced for late 2025 and beyond. Yet it continues to close underperforming stores, reflecting the uneven pressures facing department store models.
The new Nordstrom Rack locations and opening dates include:
- Surprise, Arizona on August 28
- Coral Springs, Florida on September 18
- Suwannee, Georgia on September 18
- Longmont, Colorado on September 25
- Holbrook, New York on October 2
- Estero, Florida on October 2
- Flower Mound, Texas on October 9
- Hyannis, Massachusetts on October 16
- Melbourne, Florida on October 16
- Meridian, Idaho on October 23
- Lakeland, Florida on October 23
- Prosper, Texas on October 30
- Lake Grove, New York on October 30
Even Nordstrom Rack, designed to compete directly with Ross and TJX, has struggled to replicate the same level of shopper enthusiasm.
Analysts note that while TJ Maxx and Ross deliver the thrill of finding a deal, Nordstrom Rack often feels more like a clearance outlet, even though the stores are not scruffy by any stretch.
Looks like bargain hunting has gone mainstream, and the balance of power in American shopping is shifting decisively to the discounters.
