Companies in all industries eventually see their revenue growth slow. Retailers are no exception. Fickle consumers, intense competition, changing markets, and the rapid encroachment of online retailing all combine to exert pressure on the top line. The retail graveyard is filled with chains such as Circuit City, Austin Reed, Linens ’n Things, Loehmann’s, British Home Stores, RadioShack, and the Sports Authority—that expanded rapidly and then, faced with declining growth, couldn’t find ways to change course. What should a retailer do when growth slows? Is it doomed, or is there a way to prosper when its business matures? To answer these questions, we examined the financial data of 37 U.S. retailers with recent sales of at least $1 billion whose top-line annual growth rate had slowed to single digits. Some of these retailers had seen their bottom lines fall even faster than their top lines; others had achieved double-digit earnings growth and above-average stock market returns. Our...