What: Fitch is giving some insights on the decision-making process supporting their recent rating revisions.

Why it is important: While there is nothing new under the sun, it is interesting to see how they consider local players such as Dillard’s as stable.

Fitch Ratings has downgraded Kohl’s and Nordstrom, highlighting the operational challenges and diminished confidence in their strategies against secular headwinds. Despite assets and potential advantages like off-mall positioning for Kohl’s and high-end positioning for Nordstrom, execution issues persist. Macy's shows mixed results, managing declines through inventory and expense management. Strategies are being refined, including omnichannel investments and portfolio adjustments, but effectiveness remains to be seen. Fitch’s ratings consider these retailers' ability to manage leverage amidst ongoing industry challenges.

Fitch: US department store rating actions reflect ongoing challenges