Weak hol­i­day sales at de­part­ment stores catch many off guard

The News-Times - - BUSINESS - [email protected]; 203-842-2545; @ca­soul­man

Un­em­ploy­ment hasn’t been so low in years, wages are ris­ing, con­sumer con­fi­dence is high and gaso­line is cheap, all cre­at­ing high ex­pec­ta­tions for de­part­ment stores this hol­i­day sea­son.

So when Macy’s and Kohl’s re­ported lack­lus­ter hol­i­day sales on Thurs­day, in­vestors were taken aback, send­ing re­tail stocks into a tail­spin and call­ing into ques­tion whether such mall-based chains can com­pete in a chang­ing land­scape where shop­pers are shift­ing more of their spend­ing on­line.

Macy’s saw only a slight in­crease of 1.1 per­cent in sales dur­ing Novem­ber-De­cem­ber at stores opened at least year. And while sales were strong dur­ing Black Fri­day and Cy­ber Mon­day, the com­pany said sales fell off no­tice­ably un­til the week of Christ­mas.

Mean­while, Kohl’s re­ported a small sales growth that showed a dra­matic slow­down from a year ago. Com­pa­ra­ble sales rose 1.2 per­cent, ver­sus 6.9 per­cent in the pre­vi­ous year.

Shares of Macy’s plum­meted more than 19 per­cent, on track for the worst day ever. Kohl’s stock was down nearly 7 per­cent. Even Tar­get’s stock took a hit, fall­ing nearly 4 per­cent de­spite ro­bust sales over the hol­i­days.

Ear­lier this week, J.C. Pen­ney, one of the strag­glers in the de­part­ment store sec­tor, re­ported a drop in com­pa­ra­ble store sales of 3.5 per­cent for Novem­ber and De­cem­ber. But be­cause Macy’s is con­sid­ered a barom­e­ter of spend­ing, par­tic­u­larly for the mid­dle class and for mall spend­ing, in­vestors may be look­ing for deeper mean­ing in its per­for­mance.

“Macy’s re­port spooked in­vestors be­cause in­vestors ex­pected it to be a great hol­i­day sea­son across the board,” said Neil Saun­ders, man­ag­ing di­rec­tor at Glob­alData Re­tail, a re­tail re­search firm. “Now, they’re ques­tion­ing how good the hol­i­day sea­son was. There is a lot of uncer­tainty out there.”

Tri­an­gle Street in Dan­bury that Bot­tone in­di­cated should be run­ning shortly.

Last month, FuelCell se­cured a $100 mil­lion loan from Gen­er­ate Lend­ing to fi­nance the man­u­fac­ture

of fuel cells, with the pos­si­bil­ity of an­other $200 mil­lion in credit if ap­proved by the Gen­er­ate Cap­i­tal af­fil­i­ate. The deal’s pro­vi­sions in­clude a three-month pe­riod at the end of any in­stal­la­tion un­der which FuelCell can ei­ther sell the power plant or re­fi­nance the loan; and if it does not do ei­ther, giv­ing Gen­er­ate Lend­ing

the op­tion to take own­er­ship of the plant in ex­change for eras­ing any re­pay­ment obli­ga­tion by FuelCell.

FuelCell has al­ready drawn $10 mil­lion from the loan to fi­nance con­struc­tion of a 5 megawatt fuel cell for Bolt­house Farms, a Cal­i­for­nia-based sub­sidiary of Camp­bell Soup along­side Pep­peridge

Farm in Nor­walk. FuelCell agreed to put up as col­lat­eral projects in Hart­ford and Derby awarded by the Con­necti­cut De­part­ment of En­ergy and En­vi­ron­men­tal Pro­tec­tion, as well as three more with the Long Is­land Power Au­thor­ity.

As­so­ci­ated Press

Shop­pers in Novem­ber browse aisles at a Tar­get store in Edi­son, N.J.

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