What is happening at Macy's is absolutely terrifying

[Eugene]

Source: Yahoo Finance

What is happening at Macy's is absolutely terrifying

Brian Sozzi
Editor-at-Large
Yahoo FinanceAugust 14, 2019

The main Macy’s (M) investment thesis is no longer valid.

For the past two years or so, Macy’s management has pitched the retailer as above the generally disastrous scene unfolding at malls across the country. That scene is characterized as an insane number of store closures at once-formidable apparel chains, terrible customer traffic amid the shift to online shopping, and higher than normal in-season markdown levels.

Macy’s has consistently tried to spin a different tale.

One of a legacy department store created through various mergers that was early to shutter unprofitable stores to cut costs and hopefully meet quarterly earnings. One that now has traffic-driving off-price outlets inside a good number of Macy’s locations. One that has about 50 stores where new growth initiatives are being tested, and then soon applied to the rest of its fleet of 680-plus department stores. One that is racking up big sales online, especially on mobile devices. One that has ample opportunities to monetize unproductive real estate, which could then be plowed into needed capital investment and god knows what else.

Unfortunately for Macy’s, its disastrous second quarter earnings release and material cut to its full-year earnings guidance on Wednesday officially kills its entire thesis. It’s dead, done, gone. Actually, Macy’s stock being down 60% this past year suggested well before Wednesday’s awful results that it was struggling — the numbers Wednesday just confirmed Mr. Market’s helpful early insights.

The problem here: Macy’s has proven to be just another retailer caught in the seismic shift in consumer shopping. That’s not a great place to be — just ask Sears, J.C. Penney (JCP) and, Payless ShoeSource.

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Read more: https://finance.yahoo.com/news/what-is-happening-at-macys-is-absolutely-terrifying-163959098.html

[Glorfindel]

1. Such a shame, really. Going to the big downtown department stores used to be an adventure

My idea of heaven was the bookstore on the mezzanine of the enormous Davison's department store in downtown Atlanta. Two or three times a year, we'd get dressed up and make the 80-mile trip to Atlanta to shop for back-to-school, Christmas, or just for the heck of it. I think Macy's bought out Davison's many years ago (or maybe it was Rich's). I haven't been to downtown Atlanta since the mid-90's. We're losing too many good things, I think, even though I happily do 90% of my shopping online and entertain myself by watching Netflix and Amazon Prime.

[CurtEastPoint]

3. Macy's bought out Davison's, then Rich's (Federated owned) and then Federated

A damn shame but the times change. Odd however, that some huge stores remain apparently solid.
I am thinking Europe (le Printemps, Galeries LaFayette, Selfridge's, etc.) but there, people live, work and walk in the center city

[Glorfindel]

7. Thanks, CurtEastPoint. As in East Point, GA?

My mother's best friend (and my godmother) lived in College Park. Her married last name was Camp (as in Camp Creek Parkway). We used to visit them on Sundays. You could walk over to the airport from their house and watch the infrequent planes take off and land. I think it's all under concrete and asphalt now.

And as for the department stores, I always liked Davison's better than Rich's, though I can't say why, really. My aunt worked at the Rich's in Cobb Center Mall for several years. I have been to Harrod's in London. It was very busy at the time. I hope it still is.

[CurtEastPoint]

13. Yep! EP, GA 30344

There are so many wonderful people here and in College Park and Hapeville. We get shit on in the news because of a minority of young knuckleheads going all gang shit on each other. But it's the best place to be in ATL

My favorite stores are Selfridge's in London and the Galeries Lafayette in Paris.
http://london-paris.curtisrush.com/p/paris-opera-garnier-galeries-lafayette.html

[Thomas Hurt]

4. Retail is on its way down...

Wouldn't surprise me if almost everything is delivered to your door or you pick it up.

I buy clothes online because the stores won't carry my sizes, haven't for years now.

Won't need cashiers at grocery stores, you just need people to pull the items from inventory for delivery or pick up.

Eventually, goodbye big box store fronts, say hello to automated warehouses, robot delivery vans.

[redstatebluegirl]

12. I swear we are just looking for ways to justify our lack of people skills.

Our young people do not have the ability to communicate with each other in person and in many cases in writing. It is not their fault, it is ours. Technology is wonderful, but it has killed any chance we have to get to know each other in person. In person is much harder than online.

I hate buying everything online. I want to touch it, to see if it fits me, to not have to worry about sending it back. One of my former students told me she bought her car totally online, had it delivered, they picked up her old car she signed some papers and it was done. Crazy times we live in.

[virgogal]

5. I have the same memories.The suburban malls

killed off the downtown and now the internet is killing off the suburban malls.

[Farmer-Rick]

2. Sometimes people just can't see what is directly in front of their faces.

"Macy’s has proven to be just another retailer caught in the seismic shift in consumer shopping."

No, it is s seismic shift in consumers NOT shopping; consumers without extra cash to spend on an overpriced department store.

Consumer don't have the money to shop at Macy's anymore. Otherwise, Macy's on-line shopping would be raking in the cash like Amazon is. But they are NOT, because consumer's can't afford to pay their higher prices anymore because consumers are tapped out.

It's time for a crash to redistribute the capital. The federal government will help out and bailout the filthy rich. The Traitor Trump administration is guaranteed to ignore all the suffering middle class and poor like in the last crash.

[Wellstone ruled]

9. Your post is just one part of Macy's

problem. Happen to be in the offices of one of Federated acquired Companies the day it happened. The CEO of that Company said,we were taken over via a hostile stock deal just for Tax Write offs to save Federated from a Bankruptcy as well as a Liquidation. Well that was some 15 years ago and yes,Federated did BK those take over Retailers to save themselves once again.

And yes,just by inspection,one sees the consumer pull back in real time. For those of us who have been in or around Retail,one picks up on the little nuances of shoppers. One picks up on what is called "buyers remorse",go backs or put backs.

Macy's will be gone within a year. When you have Lawyers and Bean Counters running your Business rather than home grown Managers,you are in trouble.

[Auggie]

6. Went to a Kohl's sales a few months ago and got some decent pants for $5 ...

guess where I do my shopping now?

[spinbaby]

8. I was in Macy's looking for clothes recently

I came out empty handed. Too much trendy, flimsy, cheap-looking clothing. I don’t want shoulder cutouts, sleeve ruffles, garish prints, or chintzy hardware. I don’t want tissue-thin polyester and I become despondent when even the clothing on the mannequins looks limp and wrinkled. The cheaply-made clothing of fast fashion seems to have infected all fashion at all price points.

[Peregrine Took]

10. I hate that "cold shoulder" look, too.

Its just my opinion, but it is so unattractive I can't imagine why anyone would choose to wear them.

[Runningdawg]

11. Ageing communities

When I was 35 I could spend all day shopping, walking a mile from parking to the door and another mile inside to buy my favorite brand of socks was FUN. Now that I am old - screw that shit. I hunt down SMALL stores, with easy parking.