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Retail Slump Shows Amazon Effect

Kohl’s Corp. posted an 87% drop in profit and an unexpected decline in sales. ...

Department stores are in a funk and executives at some of the country’s biggest chains are struggling to explain why consumers aren’t spending more time and money in their stores.

Kevin Mansell, chief executive of Kohl’s, said Thursday the 1,100-store chain is still figuring out how much a recent drop in foot traffic was related to issues he can address with changes in inventory and marketing, and how much was related to the economy or broader changes in consumer habits.

“I think we’re still grappling a little bit with that,” he said on a conference call. “We’re definitely not in a position that we’re putting a stake in the ground and saying hey, this one is the big driver.”

Analysts, however, argue that Amazon, which has made an aggressive push into apparel and fashion, is starting to take significant market share from traditional department stores. In a research note Thursday, Morgan Stanley MS -0.49 % analysts estimated that Amazon already accounts for about 7% of the overall U.S. apparel market and will reach 19% by 2020. By their estimates, the online superstore is already selling more apparel than all U.S. retailers but the biggest, Wal-Mart Stores Inc. WMT 0.66 %

Asked on the earnings call whether Kohl’s was...