“It’s all about haves and have-nots in retail world,” says Charlie O’Shea, an experienced market analyst with Moody’s. This is happening at a point when America is experiencing yet another wave of store closures for the year 2025 with over 4,100 eating joints and stores closing their shutters for one of the largest contraction levels ever seen before.
This dramatic increase in closure notices a trend prevalent in the industry that comes with issues like balancing sheet woes or the shift in behavior among consumers that competes because of e-commerce and the threat of big-box stores. While large companies like Walmart and Costco continue the expansion trend, smaller and medium-sized brands struggle to overcome the challenges threatened by inflation and the shift in behavior.
Popular craft retailers, coffee shop behemoths, and other mega brands are pulling out in the face of the following major brands, and what the future holds for the world of retailing will be felt in the following list.
1. JoAnn Fabric and Crafts: 790 Stores Gone
Joann Fabric and Craft Stores, a familiar name in the world of crafting in America since 1945, is shutting down all its 790 stores in the US following its second bid for bankruptcy cover under Chapter 11 within a year. Its fall has been attributed to its acquiring a huge debt of hundreds of millions of dollars due to its leveraged buyout by Leonard Green & Partners in 2011.
But there came a brief resurgence in the sale of Joann during the crafting boom that came during lockdowns. By 2024, sales had reached at a low point, and shelves stood bare, with little inventory left in the company due to the process of liquidation. This is where the reign of the dominant brand that is marketed under the fabric and craft category comes to an end.
2. Party City: 700 stores to shut down in nears 40 years
The case of Party City can be regarded as a great example that symbolizes the errors that happened in a private equity transaction and changes in the marketplace. The business was acquired via a leveraged buyout in 2012. The business had huge amounts of debt that troubled it. There was a shortage of helium in 2019 that badly affected the business of balloons. Then the coronavirus pandemic caused all the parties to be closed.
Although Party City came out of bankruptcy in 2023, they also have a debt of over 800 million dollars. As a result of increased inflation, growing competition faced from Spirit Halloween, Amazon, and Walmart, their customer base has been diminishing. In a letter dated December 2024, their CEO, Barry Litwin, addressed his employees, saying, “Very best efforts have not been sufficient to surmount” challenges.
3. Starbucks – 627 Cafes in a $1 Billion Restructuring
Starbucks is closing 627 stores as part of a major restructuring move with a $1 billion investment plan to try to turn around its business in North America. The closures amount to about 1 percent of Starbucks’ company-owned coffee stores and will be aimed at stores that have not met requirements both in terms of consumer experience and financials.
The CEO Brian Niccol’s plan, “Back to Starbucks,” also entails the elimination of 900 corporate jobs, a remodeling versus new cafes strategy, and an escalation in invested labor hours. The company will soon reopen in 2026 to specially focus on their condensed footprint in order to boost their profitabiilty.
4. Big Lots: 480 Stores Sold or Shut Down
Discounted chain store Big Lots was on the verge of bankruptcy but lived to see another day when a new management team took charge, but what they are doing now is selling leases for at least 480 of their stores. About 200 of the stores will continue to operate as Big Lots’s Variety Stores.
The bankruptcy of Big Lots can be counted as part of the struggle that dollar stores have been going through as a result of not staying up with technological advancement. In a market where Walmart competes favorably when it comes to being affordable and having technological assistance when shopping, it becomes a nightmare for their competition.
5. Walgreens: 450 Stores Rearranged in Fleet Rationalization
However, Walgreens is poised to close 450 stores by the end of 2025 as it begins an operation optimization initiative. In fact, the company has already shut down 423 locations during the past nine months.
Therefore, this downsizing is being realized because of shrinking margins in the pharmacy industry, increased competition from CVS, and intensified competition in the area of online prescription selections.
6. Family Dollar: 370 Stores Phased Out
Closing: The firm is closing down the lease agreements of 370 Family Dollar stores as they expire in line with implementing its strategy of developing the Dollar Tree brand name. The company has closed down 600 stores in the previous year.
It is “a strategic withdrawal from the non-performing store formats to the more profitable formats,” said one analyst. Family Dollar has been facing challenges in their store environment as well as their price structure compared to their rivals, especially those with better supply chain and merchandising operations.
7. Denny’s: 150 Restaurants to Close to Revitalize Brand
Denny’s plans to close 150 restaurants by the end of 2025, and so far, the Company has closed 88 restaurants as of 2024 as part of a brand health initiative. The aim is to improve profitability and transform the image. Casual dining restaurants face issues related to rising labor costs and consumer dining habits. Denny’s has a plan to revamp menu and upgrade existing restaurants.
8. Inditex: 132 Fashion Stores Decreased
Inditex, or Zara and Massimo Dutti’s parent corporation, has handled somewhat better and reduced a total of 132 stores across the world as of October 2025. These store closures include 60 for Zara and others in Zara Home, Oysho, Pull&Bear, and Stradivarius brands. Though certain brands of Inditex like Bershka continue to expand, they fall into a new strategy that ensures a seamless alignment of both online and offline spaces.
9. Carter’s Children’s Apparel Retail Stores- 100 Stores
It will reduce a total of 100 stores in 2025 and 2026 as a step in a three-year plan that will lead to a complete shutdown of 150 stores in total. Additionally, they will reduce staff in the office operations department by 15% or a total of 300 workers. The children’s apparel store is implementing a strategy to cope with and shift according to new consumer trends initiated through increased purchases of Zara and big-box stores made by parents. The new plan for the store revolves around concentrating investments and time on cultivating and developing new opportunities through online and wholesale sales and halting and revoking store expansions.
10. Macy’s: 66 Department Stores Closing
Macy’s has recognized 66 store locations in 22 various states that will shut down operations this year; this marks the beginning or initial process of eliminating a total of 150 department store closures expected for 2026. The fall of the department stores is seeing market share diverted to off-price retailing, as well as other online competitors. As indicated by specialists at the Swiss bank UBS, this pattern is set to keep going. “Macy’s is actually focused on smaller format stores and internet connectivity in order to be relevant, yet this news is definitely a reflection of ongoing shifts from traditional department stores-based retail,” reported a source.
“The spate of closures in 2025 is indicating that the retail sector is facing extreme pressure from levels of debt, lack of technology, and priorities.” It would seem that while some retailers are shifting their operations in order to compete effectively in their market space, others will no longer exist. For those who still exist, it is going to put their emphasis purely on delivering improved omnichannel functionality.
