Department Stores To Have a Rough 2009

It looks like a rocky year ahead for department stores.

The bulk of them will start reporting their quarterly earnings over the next few days, and most in the sector aren’t expecting good news…at least until some time next year. “I don’t think we are planning for a quick recovery,” J.C. Penney CEO Mike Ullman said in one article.

For his part, Macy’s CEO Terry Lundgren says he doesn’t expect an improvement until the middle of 2010.

A Dallas Morning News report cites a prediction that department-store sales will dive 10.8% in February, on top of January’s 11.1% drop. There is also talk in that story about how the bulk of consumers, who have been veering away from department stores toward discounters for a while, might stay away from mall anchors permanently…even after the recession.

Department stores have tried a lot of strategies in efforts to compete, from launching off-mall concepts to bringing in celebrity brands. Will this work in the long run, if the economy improves, or is more pain ahead regardless?

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7 Responses to “Department Stores To Have a Rough 2009”


  1. 1 Brad Ellman, February 20, 2009 at 8:56 am

    Ian,
    Have you shopped the department stores lately? Many are offering very good value on 1st quality brand merchandise. Yes, you have to look for sales to find best value, but you really don’t have to look that far once you are on the selling floor. The 10% off promotions don’t cut it any more, so the 25%, 40% and 60% off signs abound. Prices are approaching levels of some of the discounters who often sell rather poor quality.
    The department stores now need to convince the consumer that there is value in buying from them on multiple levels… including price.
    BTW, this came up a few weeks ago. You need to chat more about the positive side of retail news. This recesssion like many others is after all, part metric and part mental.

    • 2 iritter February 20, 2009 at 9:08 am

      Brad-
      I HAVE!
      Was recently at a Bon-Ton and got an absurd deal on a nice coat. I mean, really absurd. like more than 50% off.
      But is that a good thing for Bon-Ton and other department stores?
      Can they survive as discounters?
      Just asking the question because I certainly don’t have the answer.
      If this a positive side to the recession from a commercial real estate standpoint, then I guess we should cover it more, but I’m not quite convinced of the connection yet.

  2. 3 Derrich February 20, 2009 at 9:53 am

    Yeah. I threw 3 darts at my dart board last night…my February prediction is 10.1%. Close.

    And with regard to the off-mall concepts, Nordstrom opened one of its ‘Rack’ stores in San Antonio, and it’s jammed everytime we’re over in that center.

    But, then again…San Antonio is recession proof. =O

  3. 4 Smiley1 February 20, 2009 at 11:48 am

    Ian, Good work in stirring debate about current events and the realities and challenges that we’re facing every day…rather than trying to be a spin doctor like so many other so called media outlets have done for so many years. Sometimes the truth hurts, but sometimes you have to face in order to property chart the course ahead IMHO.

  4. 5 James February 23, 2009 at 11:07 am

    They will do well and survive this mess if they will deliver what the discounters don’t, real service, real value, and, get this, a “pleasant shopping experience”. Do you remember when you bought clothes and paid for them at a counter where a salesperson actually folded them and put them in an attractive bag with a carry handle?? Did you get a sense that the retailers took pride in their products??
    Retailers and manufacturors also need to actively and aggressively promote a shift in fashion away from ghetto baggy beat up crap being served up now to real clothes that actually fit, look good, and have a reasonable service life. It would be pleasant to see the effect of such a shift on Americas streets, the only cracks I want to see are in the sidewalk!

  5. 6 Amy February 24, 2009 at 3:44 pm

    Macy’s sends it consumers coupon after coupon after coupon; however, when I went to my local Macy’s on Sunday with the full intention of finally using my Macy’s gift certificate that I received for Christmas, everything I wanted to purchase was on the excluded list of “no coupons”. When I went to the Bedding Department, everything was made in China. I ended up buying nothing and leaving.

  6. 7 Ladislao February 24, 2009 at 4:21 pm

    By the way, sorry for not posting the website link to that long interview. Here it is:youtube.com/watch?v=9nJ7LM3iyNg

    His name is Gerald Celente. His website is:trendsresearch.com

    Again, doing your due diligence will help you truly understand where we REALLY are in this economic downturn. BUT it’s not about DOOM & GLOOM – it’s about preperation… I would welcome any thoughts anybody may have regarding what I said by posting them here on Ian Ritter’s page. Take care…


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