How Macy’s, Walmart & Target Will Benefit From Competitors’ Bankruptcies This Holiday Season

2018 has been a year of dramatic transformation for the U.S. retail landscape: In March, Toys R Us announced that it was liquidating 800 stores across the country; in April, debt-burdened Bon-Ton failed to find a buyer and was forced to shutter more than 200 locations; finally, in October, Sears Holdings declared bankruptcy, closing nearly 150 Sears and Kmart stores, with another 40 on the chopping block for the new year.

And of course, these are only the major bankruptcy stories — dozens of other retailers have shrunk their physical footprints, moved out of unprofitable locations and diverted more resources to e-commerce.

It’s easy to identify who loses when large retailers go out of business (the tens of thousands of laid-off employees, the landlords struggling to fill vacant space, the vendors out millions for unpaid inventory), but there will also be others who ultimately profit from their demise — and not just bankruptcy lawyers.

Competitors of Toys R Us, for one, have been scrambling to fill the void for toy shoppers going into the holiday season. Target announced plans early last month to expand its toy inventory, reallocate a quarter-million square feet of space specifically for toys in more than 500 locations and add interactive experiences to get parents and kids into stores. It has also invested significantly in omnichannel offerings like buy online, pick up in store, ship from store and curbside pickup — all of which will no doubt entice frazzled holiday shoppers.

Walmart, too, will likely get a boost from business that might have otherwise gone to Toys R Us or Kmart: Many of their consumers already count the Bentonville-Ark.-based behemoth as a favorite shopping destination, and it has strong inventory in toys, clothing, tech and other holiday-favorite categories. Plus, its e-commerce efforts are paying off: Online sales were up more than 40 percent last quarter.

Finally, Macy’s is well-positioned to nab shoppers from bankrupt Bon-Ton and Sears, as well as shrinking department stores like J.C. Penney and Lord & Taylor. With more than 700 stores across the country (counting Bloomingdale’s but not Bluemercury) and a thriving online operation, the retail heavyweight has made good on its turnaround strategy and is finding innovative ways to drive sales and bring shoppers into its stores, including expanding its off-price Backstage business, acquiring concept shop Story and renovating its most profitable locations.

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