Macy’s posted a sales decline of 3.9% at stores open for at least a year, the company said Thursday.
“The sales deceleration was steeper than we expected,” Macy’s CEO Jeff Gennette said in a prepared statement Thursday.
“The chain is still not doing nearly enough to entice shoppers into buying,” Neil Saunders, analyst at GlobalData Retail wrote in a note to clients.
Department stores are making changes to stores to boost the customer experience. But they are taking incremental steps, rather than sweeping overhauls. At the same time, they are getting squeezed by discount chains, forcing them to put products on sale. That has pressured profits.
Macy’s and JCPenney are also located in older malls, while Target and TJMaxx’s stores are typically standalone, independent of malls.
“The mall is getting more toxic,” Jefferies analyst Randal Konik said in a note to clients.”Mall traffic will likely continue to wane over the years ahead,”
Even Kohl’s, which has most of its stores away from malls, seems to have lost its footing.
“There’s a lot of choices out there for women,” Kohl’s CEO Michelle Gass said on a call with analysts Tuesday. “For Kohl’s, we stand for value, we stand for style relevancy and we really stand for that casual apparel.”
However, consumers keep spending on clothes and home goods at discount companies like Target, Walmart, TJMaxx and Marshalls
Target’s sales at stores open for at least a year and online increased 4.5% last quarter, including a 10% growth in clothing sales.
The company had “really exceptional performance” in clothing and saw an “oversized increase in market share during the quarter in apparel,” Target CEO Brian Cornell told analysts on a call Wednesday.
Target has built out its own lineup of clothing brands, and they are often the first thing customers see when they enter stores. The company also partnered with brands like Levi’s and Vineyard Vines for exclusive collections, which boosted sales last quarter.
“We have a significant opportunity to continue growing our customer base and gaining market share,” TJX CEO Ernie Herrman said Tuesday.