Nordstrom is Closing two San Francisco Stores. Could Portland be Next?

A long time ago, at a time of retail exuberance, Nordstrom announced it would be opening an avant-garde 300,000-square-foot Nordstrom store in downtown San Francisco’s Westfield Centre at the base of Powell St. in August 1988. 

Inside Nordstrom’s Westfield store in San Francisco

“We’ve been asked to make this a major flagship store for Nordstrom, so the quality level of the building and its merchandise is being escalated in a significant way,” Charles McKenzie, Nordstrom’s project manager, told me for a story I wrote about the company for The Oregonian that ran on June 14, 1987.

More than twice the size of Nordstrom’s downtown Portland, Oregon store, the high fashion emporium in San Francisco was expected to be a long-lasting shining beacon in the magical city by the bay.

So much for that. 

Earlier this week, Nordstrom announced the Nordstrom at Westfield will close at the end of August 2023 and a Nordstrom Rack store across the street will close in July. 

The news came on top of recent announcements that Anthropologie’s Market Street location in San Francisco will close on May 13 and Saks OFF 5TH will shutter no later than this fall.

The dynamics of downtown have changed dramatically over the past several years, and impacted customer foot traffic, Chief Stores Officer Jamie Nordstrom told The San Francisco Standard, with unacceptable levels of disturbance by organized criminals and destitute people.

Blame for the Nordstrom closures has been placed partly on the rise of e-commerce, but more on the deteriorating scene in San Francisco’s downtown core that has contributed to 20 retailers in or near San Francisco’s Union Square shuttering or announcing plans to close since 2020. 

A spokesperson with Unibail-Rodamco-Westfield, which owns the Westfield mall, blamed the city for “unsafe conditions” and a “lack of enforcement against rampant criminal activity.” 

Sound familiar?

In 1977, Nordstrom Inc. took the wraps off its spiffy brand new $8 million store in downtown Portland. More than 15,000 shoppers and gawkers squeezed into the city’s newest attraction on opening day, Oct. 31.

It may have been just another store to Nordstrom, but it represented a lot more to Portland. As the first new retail building to be built downtown in 15 years, the store served as a catalyst for a spirited revival of downtown as the place to be. 

Over the next ten years, the downtown Portland area bounded by NW Glisan St. on the north, I405 on the west, SW Arthur St. on the south and the Willamette River on the east witnessed at least $906 million in new and rehabilitated commercial and residential development, compared with just $89 million in investment during 1970-1976, according to the Portland Development Commission. 

In 1982, at an Association for Portland Progress luncheon, Bruce Nordstrom, co-chairman of the company, said his company had no intention of building until he received a call from Portland Mayor Neil Goldschmidt. 

Pioneer Courthouse Square, which opened in April 1984, solidified the emergence of a revitalized downtown retail core. 

Nordstrom’s downtown Portland store overlooking Pioneer Square

Now not a day goes by that television, radio and newspapers don’t bemoan the deterioration of Portland’s once lively downtown.

In mid-2021, people described Portland’s downtown to The Oregonian as “destroyed,” “trashed,” “riots” and “sad.”  “Persistent vandalism, accumulating trash and homelessness have soured attitudes about Portland’s economic, cultural and transportation hub,” the paper reported. 

In a poll of people in the Portland metro area commissioned by The Oregonian/OregonLive, residents across the metro area said downtown Portland had become dirty, unsafe and uninviting. Many reported the presence of so many homeless people and their outdoor camping as a particular concern. 

The city had moved far too slowly, for far too long, to address critical needs said poll respondent Myrna Brown, who lived in Southeast Portland, and she wasn’t optimistic the crisis would resolve itself anytime soon.

She was right to be pessimistic. 

Downtown Portland has continued to struggle. As News Nation put it in March, “Two years after riots plagued the city, two years after a pandemic and the push for social justice collided, the model liberal enclave has turned into a social mess.”

A homeless camp in downtown Portland

Chet Orloff, adjunct professor of urban studies and planning at Portland State University, said Portland’s mess is partly “because we’ve been so lax in how we’ve unfortunately treated criminals, and we’ve been lax in our support of the police. That has simply allowed people to continue to damage the city.”

 In mid-April, outdoor retailer REI, citing frustrations with break-ins and theft, announced its 35,000-square-foot  Pearl District store, in place for nearly two decades,will close when its lease comes up at the end of February 2024

“You’re really betting on the future when you invest into a retail store,” PSU Professor Thomas Gillpatrick told KGW8-TV. “So what this is really sending a message to all of us in Portland, is Portland looks not as attractive as we have been in the past.”

KGW reported viewers reacting to the REI story said they were fed up with city leadership and the state of downtown.

“Yeah, this is a travesty.,” said one. “Our mayor has done nothing. All these businesses are folding up, leaving, moving on and just plain going out of business and he has done not one thing to help prevent this from happening.”

“What will it take for our elected officials to take concrete action to improve downtown and bring back the vital city I moved to in 1999?” said another viewer “I will not go into downtown Portland anymore, due to the open-air drug use, the ever-present graffiti and trash, the people passed (out) on the sidewalks, and the general sense of lawlessness that pervades downtown.”

“Whether you’re very conservative or very liberal, at some point everybody just gets fed up,” added Chris Ham, manager of Oregon’s Finest , a marijuana dispensary in the Pearl District.

How long will Nordstrom tolerate the situation in downtown Portland?

If it can abandon a flagship store in San Francisco, it can walk away from the once charming Rose City, too.

America’s Rising Inequality Threatens National Stability

I wandered through Nordstom’s downtown Portland store the other day.

Take a look at some of the shoes I came across:

OK, but what’s so special about all these shoes? Even single one of them, including the sneakers, costs $850 or more. The Black Libelli Booties (top right) are $1795. The Fendigraphy white leather slides (bottom) are $1100.

And, by the way, big spenders looking for socks to wear with their $1000 sneakers can buy a pair of black-and-white Bottega Veneta “ghost pattern” crew socks at Nordstrom for $420. That’s right, $420.

If that’s just a bit too much, the striver can also get a pair of Balenciaga Logo Cotton Blend Socks at Nordstrom for $210 a pair or a pair of Off-White Arrow Cotton Blend Crew Socks for $120.

“The logic is, if you’re paying $1,000 for a pair of shoes, what’s $200 more?” Jian DeLeon, the men’s fashion director at Nordstrom, told the Wall Street Journal. “Lavish socks are “something you don’t need, but it’s the ultimate expression of luxury.” When you pair fancy shoes and socks, he said, it shows you’re going the “extra mile.”

It’s hard not to wonder who is buying this exorbitantly priced stuff and what it says about our economy.

Per capita income in the Portland Metro Area is just $40,138 and median household income is only $77,511.

The annual income of 31% of households is $50,000 or less. Another 31% of households have annual incomes of $50,000 – $100,000. It is probably reasonable to assume that the members of this 62% of households in the Portland Metro Area are not the ones buying $895 and over pairs of shoes.

That leaves 38% of Metro Area households earning $100,000 a year and more.

Household income

ColumnPortland-Vancouver-Hillsboro, OR-WAOregonUnited States
Under $50K31.2%±0.5%299,055±4,61338.1%±0.4%626,425±6,571.739.1%±0.1%47,785,414±58,302.5
$50K – $100K30.8%±0.5%295,189±4,384.331.4%±0.3%516,210±5,646.930%±0.1%36,648,022±63,450.6
$100K – $200K28.1%±0.4%268,728±4,128.523.2%±0.3%381,343±4,795.522.7%±0.1%27,817,092±73,446.1
Over $200K9.9%±0.2%95,005±2,1407.2%±0.2%118,601±2,8408.3%±0%10,103,691±51,548

I assume the buyers of high-priced items like the shoes above come from that segment of the population. But are enough of them so blasé about overall economic conditions to be drawn into buying extravagant goods?

The answer seems to be yes.

The middle class, once the economic stratum of a clear majority of American adults, has steadily contracted in the past five decades, according to a new Pew Research Center analysis of government data. The share of adults who live in middle-class households fell from 61% in 1971 to 50% in 2021. Although household incomes have risen substantially since 1970, those of middle-class households have not climbed nearly as much as those of upper-income households. 

On Sept. 27, 2022, the Congressional Budget Office issued a study of trends in the distribution of family wealth between 1989 and 2019. In that period, total real wealth held by families tripled from $38 trillion to $115 trillion.

But the distribution of that growth was uneven.

Money moved toward the families in the top 10%, and especially in the top 1%, shifting from families with less income and education toward those with more wealth and education. In the 30 years examined, the share of wealth belonging to families in the top 10% increased from 63% in 1989 to 72% in 2019, from $24.3 trillion to $82.4 trillion (an increase of 240%). The share of total wealth held by families in the top 1% increased from 27% to 34% in the same period. In 2019, families in the bottom half of the economy held only 2% of the national wealth, and those in the bottom quarter owed about $11,000 more than they owned. 

As the New York Times recently observed, “Higher-income households built up savings and wealth during the early stages of the pandemic as they stayed at home and their stocks, houses and other assets rose in value. Between those stockpiles and solid wage growth, many have been able to keep spending even as costs climb. But data and anecdotes suggest that lower-income households, despite the resilient job market, are struggling more profoundly with inflation.”

Even during the pandemic, when most Americans fared well financially, the rich saw most of the gain. According to the Federal Reserve, while American households overall saw about $13.5 trillion added to their wealth, the top 1% got a third of that and the top 20% 70% of it.

As the Wall Street Journal recently reported, even though the United Status is technically in a recession, and consumer confidence isn’t great, the demand for expensive luxury goods, such as handbags and jewelry, is off the charts

“Spending by Americans and Europeans is roaring, despite headlines of all-time-low consumer sentiment in the eurozone and greater caution in the U.S.,” reported the Journal. “Many luxury brands have more than doubled the size of their sales in America compared with prepandemic levels. Because of their wealthier customers, luxury brands might be more immune to the challenges other businesses now face.”

Luxury company LVMH Moët Hennessy Louis Vuitton (LVMH), whose brand stable includes Christian Dior, Louis Vuitton and Tiffany, reported a rise in sales at all its divisions in the first half of 2022. Growth was strongest in the fashion and leather goods unit, the company’s biggest, where first-half sales rose 31% year-over-year to €18.1 billion. U.S. revenues gained 24%.

U.S. credit card data from Bank of America shows that shoppers earning less than $50,000 a year are rethinking their priorities as inflation hits everyday expenses, but this has been more than offset by demand from core luxury spenders.

Then there’s the desire of some people to be noticed, to display their wealth, even if the items on display are rather bizarre or not particularly attractive. I call this the “Sure it’s ugly, but it’s expensive” syndrome.

It’s the weirdness itself that has appeal.

It’s not that people want an ugly or bizarre watch or pair of shoes. What they want is to stand out, to have their friends, neighbors and even strangers see their distinctive, peculiar, expensive accoutrements.

Oh well, at least people blowing all their money on overpriced things are keeping the people who make them employed. And that’s good, right?

After COVID-19, whither Washington Square mall? Pier 1 latest to liquidate.


When J.C. Penney filed for bankruptcy on May 15, 2020, did it put another nail in Washington Square’s coffin or signal a major transformation of the mall?

‘The Washington Square mall was a wondrous thing when it opened. The enclosed site, designed to entice shoppers with large anchors supplemented by smaller scale stores, attracted customers from as far away as Seattle.

The original mall encompassed 1,093,500 leasable square feet and was the largest enclosed shopping center in Oregon. It has a long history of change and renewal.

A 160,000 sq. ft. Meier & Frank store was the first to open for business on August 16, 1973. A 211,900 sq. ft. Sears store came next in October of that year, followed by a 120,000 sq. ft. Lipman’s in November. In May 1974, Nordstrom made its debut with a 108,000 sq. ft. store, followed by an 89,300 sq. ft. Liberty House store in August 1974 and a 210,000 sq. ft. J.C. Penney store in August 1975.

Turnover among the larger stores began within a few years.

  • In 1978, Frederick & Nelson took over the Liberty House store.
  • In 1979, Frederick & Nelson acquired the Lipman’s chain and moved the former Lipman’s space; Mervyn’s then took over the former F&N space.
  • In 2008, Mervyn’s declared bankruptcy and closed all its stores, including the one at Washington Square.
  • In 1991, Frederick & Nelson declared bankruptcy and closed its Washington Square store.
  • In 2005, Mervyn’s closed.
  • In 2008, Dick’s Sporting Goods took over the former Mervyn’s space.

The mall weathered all of these changes and its current owner, Macerich, a real estate investment trust, has been rewarded with average sales per square foot of $1261. But much greater challenges have now emerged, particularly with the mall’s anchor stores, but with some smaller retailers as well.

The Wall Street Journal predicted last week that about 100,000 stores are expected to close over the next five years—more than triple the number that shut during the previous recession. Partly to blame is the jump in e-commerce to 25% of U.S. retail sales from 15% last year, UBS estimates.

“The turbocharged shift to e-commerce is expected to further depress profit margins and accelerate a shakeout in a country that already had too much bricks-and-mortar space for an increasingly digital world,” The Journal said.

It is also looking increasingly less likely that the economic recovery from COVID-19. In a May 17 interview on the CBS show 60 Minutes Federal Reserve Chairman Jerome Powell warned that the economic recovery could take over a year . “We’ll get through this. It may take a while,” Powell said. ” It may take a period of time. It could stretch through the end of next year.”

In the Portland Metro Area, no anchor stores at malls are really safe. On May 6, Nordstrom said it planned to permanently shut 16 of its 116 full-line stores as part of its adjustment to the retail environment during the coronavirus outbreak. The following day, it said it would not reopen its Clackamas Town Center location in Happy Valley, OR after the COVID-19 shutdown ends and that the store will be permanently closed by August, 2020. Nordstrom closed two other Oregon-area stores in 2015 and one in 2018.   Nordstrom stock over the past 12 months is down from $37.46 to $16.41, a 66% decline.

Against this backdrop, consider the situation with many of Washington Square’s stores as the mall remains closed during the COVID-19 turmoil:


 The mall’s current troubles began with the bankruptcy of Sears in 2018 and the closure of its 211,900 sq. ft. Washington Square anchor store in 2019.



On May 18, 2020, Pier 1 Imports, which was founded in 1962, said it is permanently closing all its 540 retail stores, including one at Washington Square. The stores will reopen after the COVID-19 shutdowns and then proceed to liquidate their merchandise.

The company filed for chapter 11 protection earlier this year on Feb. 17 in the U.S. Bankruptcy Court in Richmond, Va. and had hopes of a sale to an interested buyer, but none emerged. “It is now clear that Pier 1’s future does not involve any brick-and-mortar retail locations,” the company said.


Chinos Holdings, J. Crew’s parent company, which also owns Madewell, filed for Chapter 11 bankruptcy protection  in federal bankruptcy court for the Eastern District of Virginia on May 3, 2020.  J. Crew has lost money for six straight years. Like many of its peers, it took it on the chin with the increase in e-commerce. But J. Crew also struggled to deal with $1.7 billion in debt resulting from a leveraged buyout by two private equity firms ( TPG Capital and Leonard Green & Partners) in 2011.

“Like many other retailers, J. Crew and Neiman (Marcus) over the past decade paid hundreds of millions of dollars in interest and fees to their new owners, when they needed to spend money to adapt to a shifting retail environment,” the New York Times reported on May 14, 2020. “And when the pandemic wiped out much of their sales, neither had anywhere to go for relief except court.”



After a long decline,  J.C. Penney filed for bankruptcy on May 15, 2020. The company, which hasn’t booked an annual profit in nine years. said it plans to close an undisclosed number of its roughly 850 department stores and put itself up for sale. The company’s annual net sales contracted 8.1% to $10.7 billion in 2019, following a 7.1% decline in 2018, 0.1% in 2017 and 0.4% in 2016. J.C. Penney’s stock hit a high off $82.23 on March 29, 2007. It started 2020 at $1.12 a share and has been trading below $1 per share for most of this year. It closed on May 15, 2020 at 24 cents a share.

“I don’t think there is a place for J.C. Penney anymore,” Robin Lewis, founder and CEO of The Robin Report, which reports on the retail industries. said to CNBC on May 16, 2020. “Even if we didn’t have this virus … we have been over-stored for half a century in this country.”

In the same vein, an April 2020 report from Green Street Advisors, a real estate research firm, said more than 50% of the department stores anchoring America’s malls are going to close permanently by the end of 2021. “Many malls will now be faced with multiple anchor vacancies, a tough place to come back from, especially in an environment where demand for space is virtually non-existent,” said said Vince Tibone, a Green Street analyst.

The April report was prescient when it said JCPenney in particular was on the edge of a bankruptcy that would probably result in its liquidation.

On May 18, the company said it expects to close about 242 stores — 30 percent of its locations — as part of a restructuring plan.



“With little or no revenues coming in for these non-essential retailers – traditional department stores, fashion, and luxury retailers being the most profoundly affected – many of the most prominent mall-based retailers, which have been struggling for years from falling sales and weighted down by too much debt, are teetering on the brink,” the Robin Report said in April 2020. Macy’s Inc. lost its investment-grade rating from Standard & Poor’s and saw its debt rated junk in February 2020.

The company is now seeking loans to bolster its cash flow, which has significantly decreased as a result of the shutdown, according to a May 7, 2020 regulatory filing. It is also looking to sublease almost half of its Long Island City headquarters in order to retain more of its cash.

Over the past 52 weeks, Macy’s stock has dropped from a high of $23.40 to $5.31 on Friday, May 15, 2020.



Gap Inc. is the parent company of Gap, Athleta, Banana Republic, Old Navy, Janie and Jack, and Intermix.

Sonia Syngal, CEO of Gap Inc. said in mid-March that the company would likely reopen fewer stores for the flagship Gap brand after the COVID-19 closures are lifted. “We’ll be using this as an opportunity to refashion the company for what we want it to look like over the next 50 years,” Ms. Syngal told the Wall Street Journal in early May 2020.

Market watchers are more cautious, having watched Gap’s stock decline from $17.28 at the beginning of the year to $7.60 on Friday, May 15, 2020, a 56% drop.

“The apparel industry is rattled, and Gap is no exception,” Forbes reported on May 7, 2020. ” A COVID recession will impact the company’s revenues, cash flows, and ability to pay dividends. We estimate that a recession that persists through late Q3/early Q4 2020 can reduce the company’s revenues by 40% from $16.4 billion in 2019 to $10 billion in 2020.”

On April 23, 2020, Gap Inc. warned in a filing with the U.S. Securities and Exchange Commission it may not survive the next 12 months intact. The company said it had suspended rent payments for shuttered stores, which approximated $115 million per month in North America, and was in talks with landlords to defer payments, change lease agreements, or in some cases, terminate the leases and permanently close some stores.

“We will need to take additional actions to both preserve existing liquidity and seek additional sources of liquidity, beyond our currently available cash and credit facilities within the next 12 months as existing cash and cash expected to be generated from operations may not be sufficient to fund our operations,” the SEC filing said.



Abercrombie & Fitch derives the bulk of its revenues from the US, which has been hit hard by COVID-19. The outbreak of the virus has led to a steep fall in demand, which the company’s Q1 2020 results on June 4, 2020 will likely confirm with major drops in revenues across all segments.

“Already struggling with sluggish sales and low gross margin, the company will face significant challenges from store closures,” The Motley Fool, a financial and investing advice company, said in mid-March.

Abercrombie & Fitch, showing it is not immune to the impacts COVID-19 is having on other retailers, has said it’s open to leaving any shopping center while it reassesses its store base. “We’re willing to walk away from any mall at this point. It’s about getting the right store in the right location at the right size,” CFO Scott Lipesky said in March.

Its stock is down from $17.48 at the start of the year to $11.14 at the close on Friday, May 15, 2020.


L Brands, parent of  Victoria’s Secret, Pink and Bath & Body Works, might not survive the pandemic after Sycamore Partners, which agreed to buy a 55% stake in Victoria’s Secret in February, tried to cancel the $525 million deal and agreed earlier this month to scrap it. Shares of L Brands have fallen 53% in the past 12 months.

On May 14, 2020, Leslie Wexner, a retailing legend, officially retired after 56 years as head of the company. The New York Post reported that his departure came at a time when his reputation “…has been tainted by sagging sales at Victoria’s Secret; complaints of a culture of misogyny, bullying and sexual harassment at the lingerie peddler; and new revelations about Wexner’s business dealings with convicted pedophile Jeffrey Epstein.”

On May 20, L Brands,, posted a first-quarter net loss of nearly $300 million and reported that net sales fell 37 percent in the quarter to $1.65 billion. Sales at Victoria’s Secret fell by almost 50% half and Bath & Body Works declined 18%.

Victoria’s Secret, which has long positioned itself as a purveyor of elegant and sexy lingerie styles,  has been struggling with changing tastes, declining revenues and a stale image.



Lolli & Pops candy company filed for bankruptcy in August 2019.  Online sales ceased in February 2019 and the company ceased paying rent to some landlords in April 2019. The company blamed vanishing visitors at shopping malls for its financial troubles. In March 2020, the company was purchased for $2.4 million by an affiliate of TerraMar Capital LLC, which said it planned to diversify the company into e-commerce and wholesale. It is unclear whether TerraMar is succeeding in reviving the company.

harrylogo2, the parent company of Harry & David, which has operated seasonal stores at Washington Square, said in April 2020 it would permanently close most of the brand’s bricks-and-mortar locations in the U.S. and focus on an e-commerce future.

Harry & David filed for bankruptcy protection in 2011, crippled by debt piled upon it by private equity owners. The company emerged from six months in Chapter 11 bankruptcy protection in September 2011 after the court approved its reorganization plan. acquired Harry & David Holdings for $142.5 million in cash. The sale closed in September 2014.



Standard & Poor’s ratings say Ascena Retail Group (ASNA), the parent of Ann Taylor, could default in coming months or years. It is expected to face significant challenges as remote work becomes more prevalent in the coronavirus era and the way women dress, particularly professionals, is changing dramatically.

Ascena operates stores under the Premium Fashion segment (Ann Taylor, LOFT, and Lou & Grey), Plus Fashion segment (Lane Bryant, Catherines and Cacique) and for tween girls under the Kids Fashion segment (Justice).

“Ascena…has had five consecutive years of losses as it has struggled to offer the right clothing selection, relied heavily on discounting and maintained stores in less-than-ideal locations,” Bloomberg reported in Oct. 2019.

Ascena recently repurchased some of its debt at below-par prices, which S&P Ratings deemed a “selective default.” Even after the company relieved some of its debt burden with that step, S&P assigned Ascena a credit rating of CCC-, the lowest before default. That was based on the analysts’ expectation of “conventional default or a broad-based restructuring of Ascena’s capital structure in the next six months.” Ascena’s stock is down 83% year to date. 


Houston-based Tailored Brands Inc., the parent company of Jos. A. Bank (and Men’s Wearhouse), has been showing sales decreases and rapidly shrinking profits. In Its fourth quarter earnings, Tailored Brands saw net sales drop 3% to $691 million while Jos. A. Bank sales dropped 5% to $204.7 million.

For the full fiscal year 2019, on a GAAP basis Tailored Brands reported a loss of $35.0 million compared to operating income of $13.3 million in Fiscal Year 2018.  Mary Beth Blake also resigned as president of Jos. A. Bank in December as part of a reorganization.

Men’s Wearhouse’s acquired  JoS. A. Bank in March 2014 for $1.8 billion. With both retailers now suffering sales declines, Tailored Brands would probably prefer to have that $1.8 billion now.

“(Tailored Brands)…is trying to change course a bit by offering things like jeans and more business-casual attire,” The Motley Fool wrote in Dec. 2019. “But this segment is pretty well saturated by a plethora of brands, so it’ll be tough. Tailored Brands is far from a top stock and faces multiple challenges that all need to be addressed now. Based on its balance sheet, the time to fix those problems is getting shorter and shorter.”

The company’s stock is down more than 70% so far this year.


Washington Square closed on March 18, 2020 because of the Covid-19 crisis. A reopening date is still not settled. When it does reopen, with so many of its retail tenants at risk, the continuation of the mall as we know it is doubtful. Will Washington Square be able to evolve to suit changing economics and tastes?

Will it be more like this:


Or this: