The rise of online shopping has completely reshaped consumer behavior, offering more convenience and access to nearly any product without the need to step inside a store. As e-commerce grows, traditional department stores continue to vanish, raising the question of whether the retail industry is moving closer to a future where brick-and-mortar shopping becomes extinct.

Ongoing economic uncertainty has also made shoppers more cautious of their spending, leading to weakening sales and reduced foot traffic for many retailers. Even long-established brands have been forced to close stores as they adjust their operations to better meet consumers’ needs.

This shift is beginning to widen the gap between store closures and openings nationwide. Now, another iconic department store is preparing to leave a community with just a single store of this concept, and another whose future has been called into question.

Nordstrom Rack confirms store closure

Nordstrom has confirmed that it will close its Nordstrom Rack store at 245 SW Morrison St. in Portland, Oregon, on January 31, 2026. The closure will affect 37 store-level employees, according to the WARN notice filed on December 1.

“We’ve made the difficult decision to close our Nordstrom Rack store located at 245 SW Morrison St. in Portland,” said a Nordstrom spokesperson in a statement to The Street. “Closing a store is never an easy decision, and we understand the impact these changes have on our team members. We’re committed to taking care of our employees through this transition, including supporting those who are interested in finding another role within Nordstrom.”

The company says the move will allow it to better serve Portland shoppers by focusing on its remaining locations and e-commerce business. Nordstrom will continue to operate its nearby downtown flagship and Portland’s only remaining Nordstrom Rack location at 10159 NE Cascades Parkway.

Nordstrom Rack to close a Portland location in 2026.

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Nordstrom’s future in Portland and nationwide

Nordstrom Rack, the company’s off-price retail division, has become a key differentiator and the largest source of new customers across all Nordstrom brands. While the downtown Rack store is permanently closing, the company remains committed to expanding the concept nationally.

In 2025, the company opened 22 new Nordstrom Rack locations, aligning with its plans to open 20 to 25 new stores per year.

Still, rumors have been circulating about the future of Nordstrom’s flagship location in Portland. During an August community meeting, Portland Mayor Keith Wilson addressed the city’s high retail vacancy rate. He claimed that Nordstrom CEO Erik Nordstrom expressed uncertainty about how long the company could continue operating in the city.

“I met with Erik Nordstrom the other day, and he says, ‘Keith, I don’t know how long we can continue to operate in Portland,'” said Wilson. “How many of our signature businesses do we have to lose before we say ‘enough, enough, enough’?”

However, Nordstrom said there were no updates to share regarding changes to its downtown Portland flagship.

“Currently there are no planned changes to our Portland stores,” said a Nordstrom spokesperson in a statement to The Oregonian. “We continue to work with the city to explore how we can best serve our customers and the Portland community.”

Nordstrom’s ownership history

In early 2025, the Nordstrom family, in partnership with El Puerto de Liverpool, reacquired the company in a $6.25 billion deal, taking it private for the first time since 1971, following years of attempted buyouts. The Nordstrom family now holds a 50.1% majority stake, while Liverpool owns the remaining minority share.

More Retail Closures:

  • Macy’s announces unexpected closure ahead of holiday season
  • Walmart announces unexpected store closure
  • 169-year-old outdoor retail chain announces 36 store closures

El Puerto de Liverpool is a major Mexican real estate and luxury department store company that could almost be considered the Latin American equivalent of Nordstrom since it targets a very similar customer base. While the two companies could be rivals, their markets don’t overlap, allowing them to form a strong strategic partnership. 

The retail industry remains uncertain

Despite navigating turbulent years following the pandemic, luxury department stores are showing signs of recovery. In the first quarter of 2025, Nordstrom saw a 3.3% increase in year-over-year foot traffic, while rivals Saks Fifth Avenue and Neiman Marcus experienced declines of around 6%, according to Placer.ai.

Nordstrom’s final fourth-quarter earnings report for 2024, released before it went private, showed a 3.7% decline in net sales for its Nordstrom stores but a 1.2% increase for Nordstrom Rack.

Meanwhile, consumer habits continue to evolve. The U.S. Census Bureau reported that e-commerce rose 5.3% year-over-year, compared to a 3.9% increase in overall retail sales.

“There’s a lot of skepticism about the department store model. It’s a model that doesn’t work anymore realistically,” said Morningstar senior equity analyst David Swartz in a 2025 interview.

Related: Nordstrom closes more stores amid worrying shopper behavior

Retailers across multiple sectors announced 67% more store closures in 2025 compared to the previous year, according to CoreSight Research.

While retailers are restructuring to meet consumer expectations, the shutdowns come with harmful consequences.

“For shoppers, widespread store closures can reduce convenience, especially in smaller towns, said Retail Insights Network Financial Reporter Mohamed Dabo. “In the U.S., location losses may even create ‘retail deserts’ where travel of up to 20 miles becomes necessary for everyday shopping.”

The impacts of these closures extend beyond convenience. The retail industry is the largest private-sector employer in the country, contributing $5.3 trillion to the annual GDP and supporting more than one in four U.S. jobs, which totals 55 million workers, according to the National Retail Federation.

“Thousands of workers are losing their jobs, many of them in communities where retail employment has historically been one of the biggest anchors,” said Approved Funding President and Chief Lending Officer Shmuel Shayowitz. “Vacant storefronts are becoming an increasingly common sight, and declining commercial property values are the norm. And for consumers, the fallout means fewer choices, diminished access to in-person shopping, and, in some cases, higher prices due to reduced competition.”

Related: Why your favorite retail store is going out of business