The International Association of Department Stores (IADS) 2025 review reveals a stunning reversal for the ‘traditional’ format, with members reporting record-breaking profits by prioritizing luxury and digital agility. Bloomingdale’s led the pack with a 9 per cent surge in comparable sales - its strongest performance in 13 years - while Mexico’s El Palacio de Hierro saw revenues jump 12 per cent to $1.47 billion in H1. This growth significantly outpaces the broader retail sector, which averaged just 3.2 per cent growth in same-store sales globally. ‘Discipline meets creativity when stores operate with a purpose beyond the shelf,’ notes IADS leadership, highlighting a shift where digital sales now contribute up to 60 per cent of GMV for leaders like Germany's Breuninger.
The flagship as a living brand universe
The physical store is being reborn as an ‘experiential destination,’ exemplified by Galeries Lafayette’s 90,000 sq ft Mumbai debut in November 2025. Developed with Aditya Birla Group, the site hosts 250+ luxury brands, blending French heritage with Mumbai’s cultural vitality. Meanwhile, Breuninger’s 13,000 sq m Hamburg flagship serves as a case study in ‘phygital’ fusion, integrating AI-driven personal shopping suites. Despite these successes, the sector faces the hurdle of skyrocketing operational costs for high-density mall footprints. However, the resilience of TSUM Kyiv - which added 52,000 new clients and exceeded 2021 pre-war performance - underscores that when retail serves communities through crisis, brand loyalty becomes unshakeable.
Digital sovereignty and AI-driven retail media
Beyond the sales floor, retailers are monetizing data through premium retail media propositions, a move championed by John Lewis & Partners. The Chalhoub Group has further disrupted the landscape with ‘Alia,’ its proprietary GenAI platform, automating customer engagement across 39 new store openings. This transition from ‘merchant to landlord and media hub’ represents a fundamental sector shift. As El Corte Inglés deploys its €3 billion investment plan, the 2025 data confirms that the department store’s future lies in its ability to act as a cultural anchor, blending high-fashion exclusivity with hyper-personalized digital convenience.
Founded in 1928, the International Association of Department Stores (IADS) is the oldest international retail body, representing giants from Bangkok to Paris. It facilitates strategic exchange on digital transformation and sustainability, guiding members toward record profitability. The association drives growth by future-proofing the department store model through experiential innovation.
