One of my 2017 forecast predictions didn’t take long to be right. Shitty Christmas sales, retail implosion, store closings, and in a couple weeks a Sears bankruptcy announcement. Reality bites. Time to short mall developers as ghost malls are the wave of the future. Can Trump tweet that Macy’s can’t close the 68 stores and must continue to employ those 10,000 workers?
Remember when market cheerleaders said that holiday sales were expected to be far stronger than usual, if only as a result of the newly-discovered optimism from the Trump election? Well, at least when it comes to conventional retailers like Kohl’s and Macy’s… not so much.
First, it was Kohl’s, which announced it was slashing its full year forecast, and now sees FY2017 adjusted EPS of $3.60-$3.65, down from $3.80-$4.00 less than two months ago, in the day after the election (ronically). It wasn’t just the future: the company revealed that comp sales were also down 2.1% y/y in fiscal months November and December combined.
As Kohl’s CEO Kevin Mansell said, “sales were volatile throughout the holiday season. Strong sales on Black Friday and during the week before Christmas were offset by softness in early November and December.”
But an even greater surprise was revealed moments later by retail belwether Macy’s, which not only reported a drop in same store sales, not only slashed guidance, but also announced it would close 68 stores and lay off over 10,000 workers.
Specifically, in its press release, the company announced that not only is it cutting its full year EPS to $2.95-$31.0 from $3.15-$3.40, but also another massive layoff and store closure as part of its latest set of operational restructurings which include “actions to streamline its store portfolio, intensify cost efficiency efforts and execute its real estate strategy. These actions bolster the company’s strategy to further invest in omnichannel capabilities, improve customer experience and create shareholder value.:”
In a nutshell: Macy’s said it would eliminate about 3,900 jobs with the store closings, which are part of a plan announced last summer that will close about 100 of Macy’s 730 locations. It also will eliminate about 6,200 other positions as part of an effort to streamline operations and reduce expenses so it can invest more in its digital operations. “We are closing locations that are unproductive or are no longer robust shopping destinations due to changes in the local retail shopping landscape, as well as monetizing locations with highly valued real estate,” CEO Terry Lundgren said.
Macy’s also announced an additional 68 Macy’s store closings (out of a current total of 730 Macy’s stores). Of the 68, three closed mid-year, 63 will be closed in early spring 2017 and two will be closed in mid-2017. Three other locations were sold, or are to be sold, and are being leased back. (A list of planned store closings, as well as store openings, is included at the end of this news release.) The company intends to opportunistically close approximately 30 additional stores over the next few years as leases or operating covenants expire or sale transactions are completed.
As a result of closing 63 Macy’s stores in early 2017, along with the three closed mid-year 2016, the company’s 2017 sales are expected to be negatively impacted by approximately $575 million. This reflects the company’s ability to retain sales at nearby stores and on macys.com through targeted marketing and merchandising efforts.
CEO Terry Lundgren’s commentary on recent trends was about as dire as any heard recently:
“Over the past year, we have been focused and disciplined about making strategic decisions to position us to gain market share and return to growth over time. While we are pleased with the strong performance of our highly developed online business, as well as the progress we have made on selling and visual presentation programs and expense reduction initiatives in 2016, we continue to experience declining traffic in our stores where the majority of our business is still transacted. Given the overall trends challenging us and the broader retail industry, and the time needed to execute new strategies, we expect our 2017 change in comparable sales to be relatively consistent with our November/December sales trend.”
So pretty bad then. Needless to say, the stocks of both companies are crashing in the after hours.
Kohl’s
and Macy’s
I’ve never seen anything in a Kohl’s I actually wanted to purchase.
all made in china !!!
How on earth are those stores still in business?
It reminds me of the scene in Cool Hand Luke where he’s boxing George Kennedy. They just keep on as if it were 1978.
Sad how the mighty have fallen.
I should be getting my 30% off coupon in the mail from Kohl’s in the next week. I’ll then go to one of their fifty 80% off racks and spend $4 for a pair of dress pants for work and $2 for a dress shirt for work.
I got three light-weight suits from Kohls for $30 a piece. I don’t know how they are in business. The power of debt I suppose.
All I shop anymore is the clearance racks. If I have to pay more than $10 for a shirt, it doesn’t get bought.
Kohl’s carries extra-husky?
I will have to drop in, too, if they still exist next time I am passing through.
I think Trump is banning all Australian Injuns from entering the country.
cheaply made Chinese trash !
I would buy some slacks and shirts from Macy’s but they dropped the Donald Trump line from their stores.
What moran selected the Communist Red Star for their logo?
Not surprised at all. These stores have only been held up these past few years by the same trick used by Lucent back in 98 when they were circling the drain – vendor financing. I have been to Kohl’s with the wife and wondered how they made any money – 1 or 2 customers in the store, little to no bags of stuff going out the door etc. Then I went to the register and after paying 80 cents (thanks to the 10.00 off any purchase of 10.00 or more coupon) they would push the Kohl’s credit card, stating that if approved, we will get 20% off our next purchase. Then it occurred to me that Kohl’s was just a high end Fingerhut. A credit card company masquerading as a retail store. These rubes that “shop” there can’t actually afford what they buy, they finance it at 22% interest, and can get a Kohl’s card by simply fogging a mirror. Now, apparently even that has maxed out. Watch out below…..
I always thought it was just our local JCP/Sears/Kohls that were empty at all hours. I guess its not just us though.
IMO, If these crooks weren’t raping American families with this “shake down” criminal fukkin Obamacare, people would have A LOT MORE spendable income. Macy’s and Kohl’s may not be gasping their last breaths but for this crazy mass stick up by the government.
Pet peeve: Macy’s might have better sales if they stopped putting toxic perfume packets in their damn ads. Those things go right into the outside trash can, and they stink up the rest of the paper – which does not endear me to Macy’s.
Just an idea for them.
NEWS FLASH*******
Goldman Sachs headquarters was attacked today by approx. 40 protesters today chanting” drain that swamp”.
The protest came hours after Trump appointed Jay Clayton yet another Goldman alumni and (SURPRISE) Clayton’s wife is in management also at Goldman.
Don’t worry all is well Obama said so LMAO !
Don’t worry Trump has inspired everyone to pitch in and MAKE AMERICA GREAT AGAIN , LMAO !
With what and at what salary , hourly wage ,shit he is already appointing people that want to keep wages down for working people ! Not that Hillary would appoint any better bunch , they are all cut from the same cloth and have the same high end life so they are fucking clueless ! You cannot keep taxing people that are avoiding healthcare expenses so a school teacher or any other government paid worker can retire at 50 and expect those same people to now cover the shortage that is the 800 pound gorilla in the room ! All pension plans nationwide are in the hole and with no real high union wage jobs to cover the bill thru taxes WTF !
Sears sells Craftsman brand, unveils plans to close 150 stores to boost liquidity
By Anne Steele
Published: Jan 5, 2017 10:29 a.m. ET
Sears is making a series of moves to improve its financial flexibility as it works through a challenging period for department stores
Sears Holdings Corp. said it would close another 150 stores and sell its Craftsman tool brand for $900 million, as the cash-strapped retailer continues to shrink and battle slumping sales.
Sears SHLD, +2.12% is flipping the Craftsman brand to Stanley Black & Decker Inc. SWK, +1.79% , and it will license back the ability to sell Craftsman-branded products royalty-free for 15 years after the deal’s closing. The acquisition gives Stanley the rights to develop, manufacture and sell Craftsman-branded products outside of Sears.
Today just 10% of Craftsman-branded products are sold outside of Sears. Stanley Black & Decker said the deal will help boost Craftsman sales in untapped channels.
“We intend to invest in the brand and rapidly increase sales through these new channels, including retail, industrial, mobile and online,” said Stanley Black & Decker Chief Executive James Loree. Stanley also recently signed a $1.95 billion deal to buy Newell Brands Inc.’s tools business.
A Sears spokesman confirmed the unlimited lifetime warranty on Craftsman hand tools made in the U.S. — “a hallmark of the brand for generations” — will be kept in place.
Is Your Sears Or KMart Store About To Close?
by Tyler Durden
Jan 5, 2017 3:52 PM
One day after Macy’s announced it would fire more thousands of workers after another holiday spending debacle, and will shut down dozens of stores as the overhyped consumer recovery fails to materialize for the 7th consecutive year, today struggling Sears Holdings, owner of K-Mart announced that the near-insolvent, anachronistic retail chain has obtained some more last-second liquidity after selling its Craftsman brand to Stanley Black and Decker for $900 million. That was not enough however, as Sears needed another billion dollar which it got courtesy of its controlling shareholder Eddie Lampert who gave the company a $1 billion loan.
The company, which has been near death for years and years, issued the latest dire warning about its holiday business on Thursday, when it announced same-store sales fell as much as 13% in November and December, compared with a 2.1% drop at Macy’s Inc.
As a result, “vendors had gotten really spooked,” said Gary Herwitz, a managing director of CoMetrics Partners, which advises companies that supply goods to Sears. “But now it seems that Sears bought themselves another year.”
Meanwhile, it now appears that instead of a long-overdue “big bang” bankruptcy, Sears will continue instead melting away with periodic closures of its thousands of badly run, inefficient stores. And indeed, this morning Sears said it would continue to shrink by closing 108 Kmart and 42 Sears stores, including the original Kmart location that opened in Garden City, Mich., in 1962. Over the past decade, the company has closed or sold more than 2,000 stores, or two thirds of its locations.
So is your neighborhood Sears or KMart store one of the 150 that are about to shut down as the heat around the melting Sears ice cobe is raised by one more degree? Find out on the chart below.
[img
[/img]
https://www.cbsnews.com/news/victorias-secret-closing-53-stores-after-poor-holiday-sales/