Retailer Myer will close two stores as it gradually scales back its footprint, while its smaller rival David Jones expands.
Myer announced on Friday that its Wollongong, NSW store will close in October and its store in Orange, in NSW's central west, will close in January, putting at risk more than 100 jobs.
The latest exits follow the planned closure of Myer's Brookside shopping centre store in Brisbane and will reduce the Myer footprint from 66 to 63 stores by the end of 2017.
Friday's announcements are a continuation of a five-year transformation plan announced by Myer chief executive Richard Umbers in September, which includes reducing the company's store footprint by up to 20 per cent.
Meanwhile, David Jones will add another 10 stores to its footprint of 40 over the next five years, including moving into Myer's Wollongong Central site in late 2017 with a "new look" store.
David Jones' sales and profit has turned around since South Africa's Woolworths retail group took ownership of the iconic Australian department store chain in 2014, while Myer continues to struggle with weak sales growth.
DJs already has a store in Wollongong, which will continue to operate for now.
It will open its first New Zealand store in Wellington and its first small format store in Barangaroo, Sydney, later this year.
The department stores, which are costly operations, have both come under pressure in recent years from the increase in online shopping and as more big international players, including Uniqlo, Zara and H&M, spread to Australia.
Mr Umbers said the closures of the Wollongong and Orange stores were difficult but important decisions in returning Myer to profit growth.
He also said the company was committed to supporting all affected staff.
"This includes discussing possible redeployment opportunities as well as other career opportunities in the area," he said.
David Jones chief executive John Dixon said Wollongong was a city that's undergoing an exciting transformation.
"The new store will see us elevate our offering to deliver a premium retail experience at a prime location in the heart of the city's fashion and entertainment precinct," he said.
Myer has a store about 20km south of Wollongong at Shellharbour.
Wollongong mayor Gordon Bradbery said Myer's decision to consolidate made sense and while he was concerned about any job losses, he was confident workers would be able to find other jobs.
He said the city of 200,000 plus residents was shifting away from manufacturing and steelworks to a more diversified economy driven by a current housing boom.
"It is a more lifestyle city now and we are going through a housing boom with a lot of new apartments being built in the CBD," he said.
"The population of our CBD is intensifying with another 300 units coming on stream over the next six months." He said fuelling the population growth were retirees wanting a coastal lifestyle, and this in turn was sparking an increase in Wollongong's restaurants and bars.
