Holiday sales grow for Macy’s, J.C. Penney
NEW YORK — Macy’s and J.C. Penney reported holiday sales growth, offering encouraging signs that if department stores struggling to hold their own against online retailers had a decent period, other retailers did as well.
The results, announced Thursday, came after both retailers focused on improving their online services while highlighting more exclusive offerings. The National Retail Federation believes retail sales could exceed its forecast for growth of 3.6 percent to 4 percent from a year ago and mark the best holiday performance since 2014.
Much of that growth may go to online sellers, though, and Bain & Co. predicted that Amazon will account for half of the holiday 2017 sales growth. Many retailers, particularly department store chains, still have lots of challenges ahead as shoppers are increasingly buying online and shifting their spending more toward experiences. Sears Holdings Corp. has been among the hardest hit as it has failed to keep up with its peers. The company announced late Thursday that it will be closing over 100 additional stores, including its Houston-area West Oaks Mall store. The Sears’ closings comprise 64 Kmart and 39 Sears stores. Liquidation sales will begin as soon as next Friday.
Macy’s said sales at established stores rose 1 percent in the November-December period.
However, it still expects an annual sales drop at established stores of 2.4 percent to 2.7 percent, and total revenue is forecast to fall 3.6 percent to 3.9 percent compared with a year earlier. Macy’s also says it will close another 11 stores, cut jobs and streamline non-store functions to save about $300 million. Macy’s executives said they haven’t finalized which 100 stores they will close. CEO Jeff Gennette says Macy’s focus has been expanding online, stabilizing its stores and laying the foundation for growth.
Macy’s expects the head count will be reduced by 5,000, or about 3.5 percent of its total workforce. Macy’s has 140,000 employees.
J.C. Penney, meanwhile, said revenue at stores open at least a year rose 3.4 percent for the nineweek period that ended Dec. 30. That compares with a 0.8 percent decline a year earlier. It also reaffirmed its full-year guidance for fiscal 2017.
Still, Jefferies analyst Randal Konik said in a note that the November and December trend doesn’t change the firm’s overall thesis, that the mall-based department store sector “is challenged with structural issues.”
Macy’s shares declined more than 3 percent to close at $24.49, while J.C. Penney stock slipped a penny to close at $3.69. Sears Holdings Corp.’s shares fell nearly 5 percent to close at $3.58.