What: An opinion about Macy’s and Kohl’s recent results announcements.

Why it is important: It is high time that US stops considering itself as the centre of trade innovation, as many department store companies are doing extremely well in the world.

In this article, the author argues against the idea that department stores are making a comeback, instead stating that without significant changes, they will continue to struggle. The author uses Macy's and Kohl's as examples. Both companies recently reported quarterly results that, while exceeding Wall Street expectations, were "objectively terrible."

Macy's and Bloomingdale's comps were down 8.7% and 3.9% respectively, and year over year net income was nearly halved. Kohl's comparable store sales fell 4.3%, and its profit was primarily due to cost cuts. Both companies expect continued negative sales growth for the rest of the year.

The author criticizes Macy's for making bold claims about innovative strategies while delivering little change. Its initiatives such as the "Backstage," the "Market by Macy’s," the introduction of Toys R Us shops, the acquisition of Story, and an updated rewards program have not led to significant improvements. Despite competitors closing hundreds of locations, Macy's first quarter sales only went from $4.98 billion in 2019 to $5.5 billion recently.

Kohl's, despite initiatives like the roll-out of Sephora shops, a new small store format, in-store Amazon returns, and various merchandising initiatives, has seen its sales decrease from $4.1 billion in the first quarter of 2019 to $3.4 billion recently.

The author concludes by suggesting that these retailers are not doing enough to adapt to the changing market. They are failing to win, retain, and grow a sufficient customer base, and their market share continues to decline. In contrast, retailers like Ulta Beauty, which now has a market value more than three times Macy’s and Kohl’s combined, continue to outperform them. The author argues that unless these retailers make more significant changes, they will continue to struggle.

Macy’s and Kohl’s keep running to stand still