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Gordmans

Patti Anderson checks out the Home Accents section at the Gordmans store in Lincoln in September 2015. The Omaha-based chain celebrated its 100th anniversary that year.

You don't have to go back too far, just a few years, to find a time when life was good for Nebraska-based retailers.

In 2013, Gordman's opened 10 new stores and The Buckle broke ground on an 80,000-square-foot expansion at its Kearney headquarters.

That same year, Bloomberg reported that Daniel Hirschfeld, The Buckle's chairman, became the state's newest millionaire thanks to the company's stock price growth.

Another Nebraska-based retailer, Cabela's, was watching its stock hit several new 52-week highs as gun sales, spurred largely by the re-election of President Barack Obama, sent the company's earnings into overdrive.

Fast forward a few years and things couldn't be much different.

Omaha-based Gordmans, with a stock price of barely more than a dime a share as of Friday, has declared bankruptcy.

The Buckle has seen its stock price nearly halved in the past year and reported earnings Friday that were one-third lower than a year ago.

Cabela's, which saw its stock price soar last fall after announcing a $4.5 billion merger with Bass Pro Shops, has watched it fall more than 20 percent in 2017 as sales declined more than 20 percent in the fourth quarter and the merger deal has run into hurdles.

And it's not just the big boys that are struggling. Schweser's, a Fremont-based department store chain that operated for 135 years, went out of business last year after a sustained drop in sales.

The Nebraska-based retailers are running up against what is a nationwide trend of more people shopping online, said Jim Otto, president of the Nebraska Retail Federation.

"The absolute No. 1 challenge that every brick-and-mortar store, whether they are big or small, is facing is the Amazons of the world," he said.

The National Retail Federation earlier this year predicted overall sales will be up about 4 percent in 2017 compared with 2016. But online sales are expected to grow at two or three times that rate.

"Brick-and-mortar (sales volume) nationally is probably down as much as online is up," Otto said.

He also noted that many online retailers don't pay local sales taxes. For example, a study  done for the American Booksellers Association estimated that Nebraskans spent more than $333 million with Amazon in 2015, depriving the state of nearly $23 million in potential sales taxes and producing a net loss of more than 2,000 retail jobs.

That competition tends to hurt most the stores that sell commodities that many other stores sell, a category that includes Gordmans and The Buckle as well as Sears, J.C. Penney, Wet Seal, Vanity and a number of other retailers that have either gone out of business or closed a large number of stores.

"All of those stores have very strong competition online," Otto said.

For stores to be able to compete at the brick and mortar level, he said, they need to have a strong niche and a unique product. Even then, they still need to have an online presence.

"We are living in the age that consumers are taking advantage of the different ways they can now shop – whether it’s through an app on their smartphone , online through their tablet/laptop or in-store," Ana Serafin Smith, a spokeswoman for the National Retail Federation said in an email.

"For retailers, a sale is a sale no matter where it comes from," she said.

Otto singled out HobbyTown, the Lincoln-based franchisor of hobby stores, as a company that does it right on both fronts. The stores sell things that are hard to get elsewhere and have employees who have specialized expertise. In addition, the company has a robust website, thanks in large part to a partnership it formed last year with AMain, one of the top e-commerce companies in the hobby retailing industry.

A few retailers continue to have success with brick and mortar. For example, Scheels does very little in online sales and continues to spend heavily on huge "destination" stores, including a new one in Lincoln at SouthPointe Pavilions that will be triple the size of the current one.

Costco, which plans to start construction soon on its first Lincoln store, gets less than 5 percent of its sales from its website. However, the company's chief financial officer admitted in a conference call with analysts earlier this month that trends are changing and that it is making online improvements to boost sales.

"We still are a brick-and-mortar entity and we want to get you into the store because you're going to buy more in the warehouse," Richard Galanti said. "We also recognize we don't want to lose the sale to somebody else because they only buy online."

Otto said his organization stresses to its members that they need to get online, but if they don't already have a web presence, it may be too late, he said.

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Reach the writer at 402-473-2647 or molberding@journalstar.com.

On Twitter @LincolnBizBuzz.

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Business editor/reporter

Matt Olberding is a Lincoln native and University of Nebraska-Lincoln graduate who has been covering business for the Journal Star since 2005.

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