The news: Nordstrom is closing two full-line stores in Texas and Delaware as it shifts focus to its off-price Rack banner.

The retailer believes it will “be best able to serve customers in both regions by leveraging our surrounding stores and through our digital channels,” a Nordstrom spokesperson told Retail Dive.

Why it matters: The store closures make clear that Nordstrom is staking its growth mainly on off-price. In addition to being an important channel for both customer acquisition and retention, it is also one of the few retail sectors experiencing healthy growth as shoppers seek value. Nordstrom plans to open 23 Rack stores this year, up from 22 in 2025, further tilting its store footprint toward its discount brand.

That bet appears to be paying off. The privately held retailer said sales rose 7% YoY to $15.9 billion in 2025, an all-time high, although its performance was likely helped by Saks’ inventory problems and subsequent bankruptcy.

The implications: Nordstrom’s recent performance reflects its ability to evolve and stay relevant with consumers. The retailer’s diversified model allows it to meet the needs of both luxury shoppers and value-seekers, while its status as a private company allows it to focus attention and resources on customer needs without becoming overly preoccupied by financial market expectations.

While Nordstrom believes that department stores remain an important force in the retail landscape, foot traffic data suggests the channel is under pressure. The majority of shoppers are quick to abandon or reduce spending with operators following a poor experience, raising the pressure on department stores to deliver—or else fade further into the background.