Well the first reports on retail are coming in for the holiday season and they are ugly.
Both Macy’s and Kohl’s reported Wednesday that same-store sales for November and December declined 2.7 percent.
Macy’s also said it will eliminate 10,000 jobs as part of a restructuring plan by closing 68 stores (out of a total of 730) by this spring. The plan will save the retailer $550 million this year.
“While we are pleased with the strong performance of our highly developed online business,” Chairman and Chief Executive Terry Lundgren said in a statement, “we continue to experience declining traffic in our stores where the majority of our business is still transacted.”
Nearly 4,000 employees will lose their jobs directly as a result of the store closings while another 6,200 positions will be lost due to the restructuring.
Also on Wednesday Sears/Kmart will close an additional 150 stores out of its 1,503 stores by the end of March. This announcement comes as hedge fund owner Eddie Lampert had to lend the troubled retailer $700M in the last 2 weeks.
This is no surprise to my readers. I wrote that the holiday shopping season would be troubled by the calendar.
“This holiday shopping season differed from most since the Jewish holiday of Chanukah did not provide a lead-in to Christmas sales since the holidays align this year.
This lack of early buying caused margins to be squeezed as retailers cut prices leading into the last week or so before the holidays.”
The anticipated holiday sales growth could not be true, since a majority of Americans do not have the means to buy any “wants,” they are forced to purchase “needs”.
As an aside, On July 1, 2015 when Macy’s chief Lundgren said he was pulling all Donald Trump products out of the stores, the stock was trading at $68/share. This morning it looks like it will open at $32.50/share. Could the Trump supporters’ boycott have had an effect or was this stock slide inevitable?