US retail industry outlook: Store closures persist into early 2026

Following a year marked by extensive store closures in 2025 – from the bankruptcy and eventual collapse of Joann Fabrics, to major network restructurings at Macy’s and Kohl’s – the US retail industry is likely anticipating some respite in the year.

However, turbulence appears set to persist, at least through early 2026. Data from Business Insider suggests that around 270 store closures have already been planned across the region. This reflects a continued shift among US retailers towards streamlining physical footprints in favour of prioritising profitable locations and investing in e-commerce. Here’s a closer look at the expected developments.

Saks Off 5th

Luxury outlet retailer Saks Off 5th is due to shutter select stores early in 2026. Reports have suggested around nine of the retailer’s 79 locations could be facing closures. The move is part of wider efforts to optimise its retail network, allowing for more attention on high-performing, high-potential stores.

A spokesperson for the retailer told FashionUnited: “We are confident this will better position the Saks Off 5th business for long-term success and look forward to continuing to deliver for our customers.”

REI

Outdoor retailer REI has confirmed to the media plans to close three stores in 2026. Its location in New Jersey is due to shutter in the first quarter of the year, followed by its New York City SoHo site and its store in Boston.

The closures come as part of a transformation strategy overseen by REI’s CEO Mary Beth Laughton, who took over the helm earlier this year. A statement to the press read: “As markets and customer needs evolve, we must adapt to position the co-op for long-term success.”

Macy’s

In January 2025, department store Macy’s said it intends to shutter 150 locations through 2026, bringing its store count to around 350. The company already closed 66 locations in the current year as it looked to pivot focus towards its online presence.

In a statement, Tony Spring, chairman and CEO of Macy’s, said: “Closing any store is never easy, but as part of our ‘Bold New Chapter’ strategy, we are closing underproductive Macy’s stores to allow us to focus our resources and prioritise investments in our go-forward stores, where customers are already responding positively to better product offerings and elevated services.”

Carter’s

In its third quarter report, Carter’s shared that it was looking to close around 150 stores across North America over the next three years. The baby and childrenswear retailer confirmed plans to shutter 100 locations in 2025 and 2026, with the remaining network to follow by 2028 as leases expire. The company said the impact of higher tariffs had resulted in substantial increases to costs on imported products, resultantly cutting into profitability.

Foot Locker

In 2023, Foot Locker announced a widespread overhaul of its store network, with plans to close 400 mall-based and underperforming locations in North America by 2026. The move sought to simplify the business and allow for investments into core banners and capabilities. In the current period, the mission remains the same, however, a new owner has since stepped in to accelerate business transformation.

Dick’s Sporting Goods acquired Foot Locker earlier this year, and in doing so hinted at further store closures in its process of turning the business around. While the number of stores to close in 2026 has not yet been confirmed, in an earnings call in September, Dick’s executive chairman, Ed Stack, said: “We need to clean out the garage. This means clearing out unproductive inventory, closing underperforming stores, and right-sizing assets that don’t align with our go-forward vision for the Foot Locker business.”

JCPenney

The future of 119 JCPenney stores remains in limbo after a previously announced sale of the properties fell through. Copper Property CTL, a trust that had been tasked with selling the assets, confirmed in a regulatory filing that a deal with Onyx Partners did not close ahead of the December 26 deadline. It had initially been unclear whether the termination of the agreement would lead to the closure of the involved stores, however, a representative of Catalyst Brands, JCPenney's parent company, reaffirmed that the transaction simply represents a changeover in ownership. A statement to the New York Post read: “It does not impact JCPenney store locations or operations. These 119 JCPenney stores will continue to operate and serve our loyal customers and communities.”