If your local shopping center is looking emptier than usual, you’re not imagining things. 2025 was a difficult year for American retail, with over a dozen major chains either closing hundreds of stores or disappearing entirely.
Between economic instability, tariff fluctuations, and the continuing dominance of online shopping, it’s no wonder that brick-and-mortar retail has taken a beating.
To that effect, let’s break down who went belly-up, who’s barely hanging on, and what this means for those of us who still like to see products before we buy them.
The Complete Shutdowns
Three retailers didn’t just close stores; they went under completely:
Party City
Party City officially called it quits at the end of February 2025, shuttering all of its 700–747 corporate locations after filing for bankruptcy for the second time. The party supply giant couldn’t compete with online retailers and dollar stores selling the same stuff for less.
Forever 21
Forever 21 filed for bankruptcy in March—also for the second time—and closed approximately 500 U.S. stores. The fast-fashion chain that once dominated mall culture couldn’t keep up with ultra-cheap competitors like Shein and Temu. The brand still operates online, though.
Joann Fabrics
Joann Fabrics closed all 850-plus stores by the end of May after filing for bankruptcy for the second time in January. The craft retailer initially tried closing 500 stores in February, but by the month’s end was sold to a liquidator. Once the pandemic crafting craze ended and people put away their sewing machines, Joann couldn’t survive on holiday wreath-makers and quilting enthusiasts alone.
The Survivors Making Cuts
Eleven more retailers stayed afloat by closing underperforming stores:
Macy’s
Macy’s closed 66 locations in 2025 as part of its “Bold New Chapter” strategy. The department store giant plans to close 150 stores total by 2026, leaving only about 350 Macy’s locations standing.
Carter’s
Carter’s announced plans to close 150 stores over the next few years, with about 100 targeted for 2025-2026. The children’s clothing retailer cited the shift to online shopping as a key factor; when you’re shopping for a toddler who outgrows everything in three months anyway, clicking “add to cart” beats wrestling them through a store.
Walgreens
Walgreens closed hundreds of stores as part of a three-year plan to eliminate 1,200 locations. The pharmacy chain closed about 500 stores in 2025 alone, with another 700 set to close by 2027.
CVS
CVS closed 270 locations in 2025, continuing a multi-year restructuring that saw 900 stores close between 2022 and 2024. The pharmacy giant blamed shifts in “consumer buying patterns,” which is a polite way of saying most people would rather order their prescriptions online than drive to a physical store.
Dollar General
Dollar General closed 141 stores (96 Dollar General and 45 pOpshelf locations); a surprising move for a discount chain that’s usually expanding like kudzu. Even the budget retailers aren’t immune to the carnage.
Kohl’s
Kohl’s closed 27 stores in 2025, a modest number compared to other retailers but part of a longer pattern of struggle. The department store has been losing ground to both online retailers and off-price chains like TJ Maxx, caught in the uncomfortable middle between convenience and bargain hunting.
Claire’s
Claire’s filed for bankruptcy for the second time in August and closed around 290 stores in North America. A private equity deal with Ames Watson saved the chain from total liquidation, keeping roughly 800 locations open.
At Home
At Home filed for bankruptcy in June and closed around 30 underperforming locations. The home décor chain emerged from bankruptcy later in 2025 with restructured debt, keeping most of its 229 stores operational.
American Signature and Value City Furniture
American Signature and Value City Furniture closed 33 stores combined. The furniture industry has been getting hammered by online competitors and rising costs.
Big Lots
Big Lots deserves special mention here. The discount retailer filed for bankruptcy in late 2024 and closed over 600 locations during the bankruptcy process. But here’s where it gets interesting: Variety Wholesalers swooped in and purchased 219 Big Lots locations, which have since reopened under new management. So if your local Big Lots came back from the dead, that’s why.
Why This is Happening
E-commerce has fundamentally changed consumer behavior. Why drive to a store when you can get the same product delivered to your door, often cheaper and faster? The convenience gap has become impossible for many physical retailers to overcome.
The economic environment doesn’t help. Inflation is squeezing household budgets, forcing consumers to cut discretionary spending. When people have less money, retailers selling non-essentials get hit first and hardest.
Tariff uncertainty has made business planning nearly impossible. Retailers aren’t able to predict their costs from one quarter to the next, making it difficult to price products competitively while maintaining margins.
Discount overseas platforms are flooding the market with rock-bottom prices that domestic retailers aren’t able to match. Traditional chains are finding themselves in a race to the bottom because they were never equipped to win and are now stuck with higher overhead costs and supply chains that can’t compete with direct-from-factory pricing.
And for mall-based retailers, the decline of American malls has created a vicious cycle. Fewer shoppers mean less foot traffic, which translates to lower sales, leading to more closures and even fewer shoppers.
What’s Next
2026 isn’t expected to be any better. More closures are already announced, with Macy’s, Walgreens, and others continuing their downsizing plans.
The retail landscape is fundamentally restructuring. Stores that survive will either offer something you can’t get online, seamlessly blend physical and digital shopping, or compete on price. Everyone else is marking time until the liquidation sales.
Empty storefronts mean more than fewer shopping options, which translates to declining communities and lost jobs. This all looks like the shakeout that defined 2025 is far from over.
Source: Hardware Retailing