Luxury discount retailer Saks Off 5th will close nine stores across the United States beginning in early 2026 as part of a restructuring effort to concentrate on higher-performing locations, the company confirmed this week.
Saks Off 5th to Close 9 Stores Nationwide
| Key Fact | Detail / Statistic |
|---|---|
| Stores closing | 9 U.S. locations |
| Closures begin | Early 2026 |
| Reason | Streamlining, optimizing store footprint |
| Remaining stores | ~70 U.S. locations |
Saks Off 5th will permanently close nine U.S. stores starting in 2026 as part of a broader effort to streamline operations and focus on high-performing markets. The move highlights shifting consumer behavior and ongoing changes in the U.S. retail landscape.
Saks Off 5th Store Closures Reflect Changing Retail Landscape
The discount arm of Saks Fifth Avenue, owned by Hudson’s Bay Company (HBC), said the closures will affect stores in Connecticut, Illinois, New Jersey, New York, Pennsylvania, Texas, and Washington, D.C.
The decision underscores the company’s strategy to focus on “markets where Saks Off 5th has strong brand awareness and high-performing stores,” a spokesperson told Retail Dive in an emailed statement.
According to industry analysts, the move mirrors broader challenges across the mid-luxury and outlet retail sectors, where rising costs and slowing discretionary spending are pressuring profitability.
Full List of Saks Off 5th Stores Closing in 2026
- West Hartford, Connecticut
- Chicago (State Street), Illinois
- East Hanover, New Jersey
- Niagara Falls, New York
- Philadelphia Mills, Pennsylvania
- Pittsburgh North, Pennsylvania
- Plymouth Meeting, Pennsylvania
- Austin, Texas
- Washington, D.C.
These locations are expected to shutter gradually throughout 2026, with clearance events planned in the months leading up to closure. Employees at affected stores will be offered transfers or severance packages, according to internal communications cited by CoStar News.
Economic Pressures and Strategic Shifts
The decision comes amid a mixed environment for U.S. retailers. While off-price retail has outperformed many traditional department stores, analysts note that competition from chains like Nordstrom Rack, TJ Maxx, and Ross Stores has intensified.
“Off-price remains a resilient segment, but consumer priorities are shifting,” said Dr. Marianne Hughes, a retail strategy professor at New York University’s Stern School of Business. “Shoppers are more value-driven, but they also expect seamless digital experiences, forcing brands like Saks Off 5th to modernize their operations.”
HBC has been investing heavily in e-commerce and logistics infrastructure. In 2024, Saks Off 5th unveiled an upgraded online platform designed to integrate inventory across its stores and warehouses, allowing for faster fulfillment and personalized promotions.
Broader Context: Outlet Model Under Pressure
The outlet sector, once a dependable growth engine for luxury and premium brands, has slowed in recent years. Analysts from CBRE Group report that outlet mall foot traffic has declined by roughly 7 percent since 2022, driven by rising interest rates, inflation, and the normalization of online shopping after the pandemic.
At the same time, commercial real estate costs have surged in urban markets. The Washington, D.C. and Chicago closures—two of the brand’s higher-profile locations—illustrate how urban retail has struggled to regain pre-pandemic momentum.
“High-end discounting no longer guarantees volume,” said Erin McLeod, senior retail analyst at GlobalData Retail. “Saks Off 5th’s strategy appears to be a defensive repositioning, focusing on profitability rather than aggressive expansion.”
Hudson’s Bay Company’s Broader Plans
Hudson’s Bay Company, the Toronto-based parent of both Saks Fifth Avenue and Saks Off 5th, has been recalibrating its portfolio. Earlier this year, HBC announced plans to merge its digital and physical retail divisions, aiming to streamline management and improve customer data integration.
According to company filings, Saks Off 5th operates about 70 stores in North America following the announced closures. The retailer said it remains committed to maintaining a “robust omnichannel presence” and intends to open smaller-format or pop-up stores in select markets.
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Consumer Reaction and Next Steps
Customer reaction has been mixed. Some expressed disappointment on social media about losing convenient local access, while others said they now prefer shopping online due to broader selection and discounts.
Industry observers expect more retailers to follow similar paths in 2026 as digital sales continue to outpace in-store growth. Analysts say the company’s performance next year will hinge on how well it executes its digital transformation and retains loyal customers through its loyalty programs.
Looking Ahead
Saks Off 5th’s restructuring marks another sign of a retail industry in transition. While its closures represent a setback for some communities, analysts emphasize that the company’s strategy aligns with a broader industry trend toward leaner, more digitally integrated operations.
“The question now is whether the brand can sustain luxury appeal while scaling efficiency,” said Dr. Hughes. “Those that strike the balance will define the next decade of American retail.”
