Thursday, January 10, 2019

Department Stores See Slow December

The later weeks of the holiday shopping season were not so cheerful for U.S. department stores. We already knew that Sears and Kmart, in bankruptcy, had fared so poorly in December that the company is preparing to liquidate, though the details still depend on an auction next week. But this is not just a Sears problem. This week, more gloomy reports have come in. There is reason for concern for Macy’s, which has had big plans and high hopes, then fallen short two Decembers in a row. JCPenney last year had its first good holiday shopping season in years, only to return to its downward drift this time around. It has announced three store closings. Kohl’s also reported a disappointing December. Target, by contrast, showed strong holiday-season growth after years of struggle.

JCPenney is likely to gain the most from the expecting closing of Sears, and it is probably Target that gains the largest number of Kmart shoppers. If 500 department stores close it provides breathing room for the department stores that remain, but does little to solve the problems of identity and merchandising that plague the whole department store sector. It is harder than ever for a store that sells so many things to have the kind of meaningful identity that will bring shoppers in, and this is a problem that has no obvious solution. There is little consolation in the thought that the department store that has the strongest brand identity, Sears, is the next one to close its doors.