Source: The Week – Business
An already bad year for department stores is getting worse, said Lindsey Rupp at Bloomberg. After a lackluster holiday season, “every major chain in the industry” has reported disappointing quarterly sales. Macy’s reported that its quarterly profits fell 38 percent, to $71 million, from the same period a year ago. Kohl’s, Nordstrom, J.C. Penney, Dillard’s, and Hudson’s Bay Co., which owns Saks Fifth Avenue and Lord & Taylor, all reported steep declines in same-store sales. The crushing results added a new layer of urgency to department stores’ efforts to slash expenses. Macy’s, for example, already has plans to close 100 underperforming stores, eliminating some 4,000 jobs, and executives say more closures might be necessary. Department stores, it seems, have a new mantra: “How quickly can we cut?”
Macy’s has become the new poster child for the retail apocalypse, said Abha Bhattarai at The Washington Post. The shopping malls that the store once anchored have been hollowed out by the rise of e-commerce, leaving the chain stuck with piles of unsold inventory and acres of pricey real estate. This year, Amazon is expected “to usurp Macy’s as the country’s largest clothing retailer.” Meanwhile, consumers who still shop offline are increasingly headed to off-price chains like T.J. Maxx. By Macy’s own estimates, two-thirds of its most loyal customers and 70 percent of millennials shop at discount retailers every month. “Another issue: The company tends to sell run-of-the-mill products that shoppers can find more easily — and often more cheaply — elsewhere.”
“America’s long-standing love affair with shopping at malls and department stores may be nearing an end,” said Chris Isidore at CNN. So far, 3,300 retail store closings have been announced this year, with analysts predicting that 2017 will see the most closures since the recession. Employment at department stores fell 46 percent between 2001 and 2016 — even more than in beleaguered industries like coal mining (32 percent) and factories (25 percent). The mall as we know it is doomed, said Hayley Peterson at Business Insider. Macy’s is already “morphing into a discount store” by rolling out self-service shoe departments and new clearance sections.
Read More Here: Why America’s department stores are in free fall
Categories: Financial/Societal Collapse and Dependence