(Source: The Dallas Morning News)

By Maria Halkias, The Dallas Morning News
Feb. 19--Pity the department store.
The recession is sucking sales out the door of the big two- and three-level mall anchors and from their newer, more productive off-mall locations.
The new mantra for one of America's oldest retail categories: When the economy rebounds, everything will go back to the way it was.
But will it? Analysts who study department stores say the downturn may prove too severe for some companies. There are 10 left with sales of at least $3 billion: luxury sellers Neiman Marcus and Saks; upscale Nordstrom; midtier Macy's and Dillard's; value chains J.C. Penney, Kohl's and Sears; and regional chains Bon-Ton and Belk.
Over the next few weeks, the category will report substantially weaker fourth-quarter earnings. Its share of total retail sales has been shrinking since the 1980s. Together, the top 10 chains had sales of about $110 billion last year, about one-fourth of Wal-Mart's total.
As a group, department stores posted nine consecutive monthly sales declines through January and are forecast to post a 10.8 percent decline in February, said analysts surveyed by Thomson Reuters.
There's also a danger that customers hooked on discounts and learning to live with less may not return to their old ways.
"We know that shoppers are avoiding certain retail space to avoid temptations, and malls are at the top of that list," said Candace Corlett, president of WSL Strategic Retail. "Is it temporary? It could be two years."
In a WSL survey, 55 percent said they are shopping less at the mall.
Once the recession hit in late 2007, it put the kibosh on phenomenal sales growth at luxury and upscale chains from Neiman Marcus to Nordstrom, said Kelly Tackett, a senior consultant at TNS Retail Forward.
It also deflated momentum in the other department stores, some of which had spruced up their home departments. Penney introduced Polo Ralph Lauren American Living brand, and Macy's featured Martha Stewart exclusives.
The downturn was more than Mervyn's and Goody's could bear. They ended operations last year.
The department store "comeback never materialized," Tackett said.
Now each store has its own issues, she said. "Luxury has been the hardest hit with the aspirational shopper cutting back. Macy's is still trying to benefit from its national scale. Dillard's and Macy's are struggling to identify the shopper they're targeting and are being challenged by J.C.