Department Stores continue to struggle with consumer spend shifts. Each Department Store is using one of or all of the following strategies: 1) lower the number of stores; 2) shrink the size of go-forward stores; 3) invest in internet fulfillment; 4) brands vs. exclusive private labels as a differentiator. Here are some of the tidbits from last week's calls along with the results from the last 7 quarters comp sale results:
- Comp was down 3.5%, the worst drop in several years.
- Big ticket items that were driving previous quarter comp sales are making incremental growth difficult.
- 75% of online orders touch a store.
- Management still believes the total year comps will be down 1% to up 1%.
- Comp was down 2.7%, the fifth consecutive quarter with a negative comp and second highest negative comp (Q1 2016 of -3.9%).
- 90% of stores are freestanding or in strip malls providing Kohl's more flexibility for fulfillment of online orders than mall based retailers
- Strong investments in logistics with a 5th internet distribution center opening
- Strong national brands are the merchandise focus.
- Management still believes the total year comps will be flat to down 2%.
- Overall comp of owned and licensed was down 4.6% and on an owned basis down 5.2%. This is the second worst comp in last 7 quarters (Q1 2016 of -5.6%).
- Bluemercury continues to be a strong point for Macy's posting double-digit comp growth.
- Believe that the 100 store closures is enough but open to offload real estate where value outweighs the business.
- Exclusive private label brands are the merchandise focus.
- Management still believes the total year comps will be down only 2-3%.
Nordstrom Rack & Nordstrom
- Nordstrom Rack is still positive but came in light posting a 2.3% comp. Last time the business posted a comp below 3% was Q3 2015. Online business was only up 19% vs previous year quarterly growth of 42%.
- Full line store comp was down 6.4% with the total comp (includes online) down 2.8%.
- 100% of stores are still cash flow positive despite the continued weakness in same store sales.