Seeking holiday cheer
It could be a chilly holiday season for department stores.
A mixed bag of third-quarter earnings reports from Macy’s, J.C. Penney, Kohl’s and Nordstrom underscored the challenges they face in attracting shoppers in the era of Amazon.
Macy’s said sales fell at established stores in the third quarter, marking the 11th straight quarter of declines. Kohl’s reported a drop in quarterly profit, though it saw rising sales. And J.C. Penney delivered a smaller-than-expected loss, but it marked the 19th quarterly loss in the past 23 quarters. And while J.C. Penney’s increase in sales at established stores marked the first time in a year that happened, business was helped by liquidating inventory. Even Nordstrom saw a key sales measure fall and trimmed its outlook. And business at Nordstrom Rack, long an engine of growth, has stalled.
The good news for retailers: They’re keeping inventory lean, which means they may have less to mark down after the holiday. But driving sales still remains elusive.
“I don’t know how they’re going to grow anymore,” said analyst Ken Perkins at Retail Metrics. “Foot traffic is down. And their online business is not growing fast enough to recoup what they’re losing from Amazon.”