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Department Stores: A Hopeless Retail Cause?

On this week’s episode of Shopping for Stocks, host and Zacks Editor Maddy Johnson dives into one of the scariest aspects of the retail industry: department stores.

Yesterday, Citi Research downgraded Macy’s M and JCPenney JCP to “Sell” from “Neutral,” alluding to a less-than-positive holiday season for retailers in the struggling department store space.

Analyst Paul Lejuez said that Macy’s in particular “no longer makes much money as a retailer,” and “has [not] found the right tools” to evade a steady decline. JCPenney’s rating was cut on the heels of weak updated guidance, while the company blamed heavy discounting ahead of the holiday shopping period.

As a result, a domino effect occurred, sending shares of Nordstrom JWN, Kohl’s KSS, and Dillard’s DSS downwards. Even retail sector ETFs like the SPDR S&P Retail ETF XRT and the VanEck Vectors Retail ETF RTH were down.

But this impact is nothing new, and it’s time these department stores break this vicious cycle.

How can companies like Macy’s stand out from its peers? What can it do differently? And most importantly, how can it make shopping an event again?

With Nordstrom and even Sears implementing innovative strategies, stores like Macy’s and JCPenney must try something to stay in the game.

As a reminder, if you feel that something was missed, or if you want a different topic covered, send an email to podcast@zacks.com. Make sure to check out all of our other audio content at zacks.com/podcast, and remember to subscribe and leave a rating on iTunes.

Thanks for listening to this week’s episode of Shopping for Stocks!

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VANECK-RETAIL (RTH): ETF Research Reports
 
SPDR-SP RET ETF (XRT): ETF Research Reports
 
Nordstrom, Inc. (JWN): Free Stock Analysis Report
 
Macy's Inc (M): Free Stock Analysis Report
 
J.C. Penney Company, Inc. Holding Company (JCP): Free Stock Analysis Report
 
Kohl's Corporation (KSS): Free Stock Analysis Report
 
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