Can Macy’s escape the Department Store Death Spiral?

Macy’s revenues actually grew for the first time in quite a while in 1st Quarter 2018, Stockrow data indicates.
The revenue growth rate was 1.77% which does little make up for losses, but it is far better than the -6.13% negative growth rate reported in 4th Quarter 2017. That means Macy’s delivered an effective revenue growth rate of 7.9%, which is very good.

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The Retail Apocalypse is Alive and Well

Giving Walmart workers an extra $8 or $9 a day might have little or no impact on the economy. Walmart clerks can now afford to buy lunch at In-N-Out Burger; rather than at McDonald’s, how does that benefit the wider economy? Much higher wages will be needed for a real economic stimulus.

It remains to be seen if the $1,000 bonus and wage hike will have any effect on Main Street. Giving average families an extra $1,000 to pay off $1,000 of their credit card debt, might not do much for the economy. The average U.S. household now owes $15,654 in credit-card debt, Nerdwallet estimated.

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Macy’s is Doomed

The truly frightening statistic is that Macy’s has lost $1.09 billion in revenues during the first three quarters of 2017. Macy’s reported $25.78 billion in revenues at the end of January 2017 and $24.69 billion at the end of October. The revenues shrank by $1.09 billion in just nine months.

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Retail Apocalypse Heats up 6,700 stores have closed in 2017

2017 has become the worst year for store closings in the United States possibly since the Great Depression. There is a strong possibility that the actual number of store closings might exceed 10,000. Such a number is possible because analysts like Credit Suisse may not be counting franchisees and mom and pop stores that will also be going under.

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TJX: Department Stores that make money what’s up with that?

By shrewdly taking advantage of the opportunities created by the retail apocalypse, TJX has grown into America’s dominant department store brand. It is liable to remain in that position for a long time to come because of the sheer ineptitude of the competition.

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Amazon is Growing but is it Making Money?

Amazon has some value-investment characteristics including a lot of cash and the ability to generate vast amounts of cash on a regular basis. The problem is that unlike companies such as Microsoft, Oracle, Alphabet, and Apple, it cannot keep that cash around.

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The Incredibly Shrinking Macy’s

Anybody who doubts the reality of the Great Retail Apocalypse has not taken a look at Macy’s (NYSE: M) financial

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Would Amazon buy Sears or Nordstrom?

This does not mean Amazon would not buy a department store. I can certainly picture it acquiring Nordstrom (NYSE: JWN); which has a “best in the industry” reputation, and a loyal customer following much like Whole Foods. It also likes to implement next generation retail practices like setting up “storefronts” for online merchants and Tesla dealerships in its stores.

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What is killing the Department Stores?

The real culprit in the death of the Great American Department Stores is changing times. Since there is no way to change that investors should stay away from this sector, perhaps far away.

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