Why Macy's is suffering an epic holiday hangover
The scheduled Wednesday release of the Commerce Department’s data on December retail sales, which will show the health of the consumer for the important holiday season, has been delayed due to the partial government shutdown.
But we already know Macy’s had one of its toughest holiday seasons in years, forcing it to cut its outlook and leading to the stock’s worst ever one-day performance. The economy is in good shape, and there are plenty of jobs, so the department store chain’s struggle is less about the consumer and more about store relevance, says Marshal Cohen, chief retail analyst with The NPD Group, a market research firm.
“Macy’s went too far down the road that took them to a broken place,” says Cohen. “They did too little, too late to address issues, tweak the model, and resonate with consumers.”
Now suffering from an epic holiday hangover, Macy’s most recent lackluster performance has again raised the question: Are department stores dead for good?
“The model still holds potential, but there’s a lot of work that still needs to be done—and quickly,” says Cohen.
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Cohen says Macy’s, for example, needs the right assortment of products, first and foremost. Additionally, the shopping environment needs to be clutter-free and easy to navigate.
Most importantly, Macy’s online shopping needs to be “fully integrated and in concert with in-store,” says Cohen.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| M | MACY'S INC. | 15.07 | +0.51 | +3.50% |
| TGT | TARGET CORP. | 121.59 | -0.14 | -0.12% |
Look no further than Target, which has made notable investments in store remodeling and delivery services. The retailer saw a surge of shoppers both in-store and online this holiday season, with same-store sales climbing 5.7 percent. That’s up from the 3.4 percent growth seen a year ago, surpassing some analysts expectations.
Vera Gibbons is the founder of nonpoliticalnews.com which produces “NoPo” - a free daily newsletter that covers and curates non-political news only within Consumer/Personal Finance; Health & Wellness; Fashion/Beauty; Fitness/Diet.