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Ecommerce Gains Leave Retail Stores in the Cold
Jan 8, 2017 9:08 AM
By Rapaport News
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RAPAPORT... Initial holiday sales figures pointed to a tougher season
for retailers with department stores Macy’s, J.C. Penney and Kohl’s reporting declines due to a shift toward online shopping.
Macy’s share price slid 14 percent on Thursday after the company reported comparable sales fell 2.1
percent in November and December compared with the same period last year. The
company revised its full-year outlook downward and outlined plans to close 68
stores and undergo a restructuring, laying off 10,100 staff.
Macy’s online holiday sales outperformed physical sales,
indicating consumers are shopping more online rather than at bricks-and-mortar
stores.
“We are pleased with the performance of our digital
business, with double-digit gains at both macys.com and bloomingdales.com.
However, store sales continued to be impacted by changing customer behavior,”
said Terry Lundgren, Macy’s chairman and chief executive officer.
Macy’s had expected higher sales, even though they were
within the lower end of its guidance, Lundgren added.
“We believe that our performance during the holiday season
reflects the broader challenges facing much of the retail industry,” the
executive said.
Even as overall sales declined, fine jewelry was one of the
retailer’s strong sectors, Lundgren added.
J.C. Penney reported a similar pattern, with
comparable-store sales dipping 0.8 percent in November and December, while fine
jewelry was again one of the stronger areas. The first three weeks of November
were “challenging in stores,” with business picking up from Thanksgiving on
November 24, said Marvin Ellison, the retailer’s chairman and chief executive
officer. Online sales grew, Ellison added. J.C. Penney’s stock fell 3.7 percent
Friday.
Meanwhile, Kohl’s share price plummeted 19 percent on
Thursday after it reported comparable sales fell 2.1 percent during the two
months, while total sales dropped 2.7 percent.
“Sales were volatile throughout the holiday season,” said
Kevin Mansell, Kohl's chairman and CEO. “Strong sales on Black Friday and
during the week before Christmas were offset by softness in early November and
December.”
The southeast and northeast U.S. and the mid-Atlantic were
the strongest-performing regions, Kohl’s added.
The weaker holiday season in stores was backed up by data
from RetailNext that showed bricks-and-mortar sales fell 10 percent during the
period as store traffic dived 12 percent. However, the average transaction
value jumped 4.8 percent, suggesting consumers may be saving their biggest
purchases for physical stores even if they are spending less there overall.
By contrast, online sales leapt 12 percent to $63.1 billion,
according to data from ComScore.
“2016 marked another year where digital – and in particular,
mobile – grew its spending share and influence relative to traditional
brick-and-mortar retail,” said Gian Fulgoni, CEO of ComScore.
Image: Kan Wu |
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