Department Stores Post Holiday Gains, Still Under Pressure
Macy’s is closing 11 stores in Q1 as it moves closer to its goal of shutting 100 locations as part of a 2016 restructuring plan, the company said. Macy’s has shuttered 81 of the 100-store target and the remaining 19 will be closed as leases expire, the company said.
The store update came as Macy’s posted a one percent gain in same-store sales during November and December.
During the recent holiday season there were revenue gains across the company’s roster of store nameplates – Macy’s, Macy’s Backstage, Bloomingdale’s and Bloomingdale’s The Outlet and Bluemercury – led by strong sales of exclusive gifts, activewear, shoes, dresses and jewelry.
Meanwhile, J.C. Penney, bolstered by strong sales of home and beauty products and fine jewelry, posted a 3.4% percent gain in same-store sales during November and December. Despite the improvement, J.C. Penney kept its forecast for flat same-store sales for the fiscal year ending this month. It closed 127 stores last year.
The two companies’ results and contraction is in line with many analysts’ expectations for department stores in general. “The November-December trend doesn’t change our overall thesis as we believe the mall-based department store sector is challenged with structural issues,” Jefferies LLC analyst Randal Konik said in a research note.
J.C. Penney, Jeffrey Davis, Chief Financial Officer, 972-431-1000
Macy’s, Karen Hoguet, Chief Financial Officer, Karen.email@example.com.