(Bloomberg Gadfly)—Call it a Christmas miracle. Macy’s Inc. and J.C. Penney Co. Inc.—two troubled department-store chains that have been emblems of the so-called retail apocalypse—rang up healthy sales results this holiday season.
Macy’s, No. 6 in the Internet Retailer 2017 Top 500, said Thursday that its comparable sales for November and December were up 1% over a year earlier, a welcome turnabout for a company that has posted 11 consecutive quarters of declines on this measure.
“We saw improved sales trends in our stores and continued to see double-digit growth on our digital platforms. Customers also responded well to our new loyalty program,” CEO Jeff Gennette said.
J.C. Penney (No. 33), meanwhile, reported a 3.4% comparable sales increase over last year for the nine-week period that ended Dec. 30.
The improvement seemed to be broad-based across various departments, a good sign for both retailers. Macy’s said top performers included active apparel, shoes and coats, while J.C. Penney called out strength in its home, beauty and fine jewelry categories.
The department-store sector has been perhaps the gloomiest corner of the retail industry in recent years, so kudos to these chains for showing they’ve still got some fight in them.
That said, I get why investors aren’t sending either stock soaring on these results. And that’s because I suspect the growth doesn’t exactly reflect fresh strategic genius on the part of either company.
Sales figures are still being tallied and published, but we’ve gotten signals the retail industry overall probably had its best Christmas season in a long time, thanks to upbeat consumers. A rising tide likely lifted all boats, including those of Macy’s and J.C. Penney.
These retailers will need to show they can deliver growth consistently if they want to convince investors they’re not just drafting off wider industry strength.
It’s also worth noting that neither chain indicated Thursday it is planning any new store closings. (Macy’s said it would close 11 stores, but those were part of a plan it announced more than a year ago to shut 100 locations.) Including the stores announced Thursday, Macy’s has closed 124 stores since 2015. January is often when retailers announce fleet prunings for the year ahead. For now, it seems, neither chain has such plans for 2018.
As I’ve previously noted, Macy’s has wisely been more proactive than its rivals about trimming its brick-and-mortar footprint.
But it may yet need to cut deeper. J.C. Penney, meanwhile, is reinforcing the notion it still hasn’t come to grips with how out-of-sync its huge store portfolio is with the digital era.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
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