Macy’s, Sears, J.C. Penney react to holiday sales blitz
Against an overall bright economy and a continually gloomy outlook for department stores, three of the nation’s top three chains took different approaches Thursday when it came to how they cast their futures. Macy’s. The famed Cincinnatibased chain said its sales improved slightly over the holidays but that it is nevertheless going forward with 5,000 job cuts, the closure of seven more stores and cuts at other remaining locations. Sears. It resumed the drumbeat of store closures that went on through much of 2017. In the latest batch, it said it will close 64 Kmart stores and 39 Sears stores.
J.C. Penney. Penney announced a 3.4% sales increase in stores open at least a year during the critical holiday period. Though it has been closing stores as well, it stuck to the positive and didn’t announce a new round.
Macy’s took the most unusual approach, calling its holiday sales “solid” with a 1.1% increase overall in stores open at least a year while using the same occasion to announce it is closing more stores. Macy’s reported strong performances for active apparel, beauty products, shoes, dresses, coats, fine jewelry and some other items. The company also said its digital sales jumped by double digits.
Analysts credited Macy’s with incremental improvements, though the sales increase may have been largely attributable to the strong economy, GlobalData Retail analyst Neil Saunders said.
“We recognize that changes have been made and are starting to have a slight positive impact on performance,” Saunders said in a note. “However, these results are simply not strong enough to suggest that Macy’s has transformed the business nor that future success is guaranteed.”
The cuts, Saunders said, “underscore the need for more surgery to restore the business to health. While we believe these actions are necessary, we maintain that the focus should be on growing the top-line through improvements to stores, ranges and the general proposition.”
Sears, meanwhile, piled on more bad news. A total of 103 Kmart and Sears stores will close, in addition to hundreds last year, and it spread the pain from Alaska to Florida.
Liquidation sales will begin as soon as next week, the department store chain based in Hoffman Estates, Ill., said. Store employees will receive severance pay and may apply for jobs at other Kmart and Sears stores.
For something more upbeat, investors turned to J.C. Penney.
“We are very encouraged” by the sales improvement, led by home, beauty and fine jewelry, CEO Marvin Ellison said in a statement. “Our apparel categories continue to demonstrate improved … performance, particularly in women’s and kids.”