Department Stores, Once Anchors at Malls, Become Millstones

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http://www.nytimes.com/2017/01/05/business/department-stores-macys-sears.html

>For decades, a corner spot at the mall was a sure path to success for big American department stores like Macy’s. Not anymore.

>Those stores have been outmaneuvered by online retailers like Amazon and discount retailers like T. J. Maxx. And now the pace of change is accelerating, transforming the retail industry faster than expected.

>The results? A rude awakening for some of the country’s biggest retailers. And for malls, a reshaping that, in many ways, mirrors a growing economic divide.

>Macy’s said this week that it would cut more than 10,000 jobs as part of a previously announced plan to close 100 stores and cut other costs. And the long-struggling Sears Holdings said Thursday that it would close 150 more stores and that it had sold its nearly century-old Craftsman brand to Stanley Black & Decker. They are the latest in a slow bleed of similar announcements in the past two years from rivals including J. C. Penney.

>These changes are “happening at a tremendous speed,” said Bernard Sosnick, a retail analyst at Madison Global Partners.

>“It’s putting pressure on all stores, best and worst, but the worst just don’t have a place in retailing anymore as sales decrease,” Mr. Sosnick said. “It’s necessary to sacrifice them, shutter them, to help the others survive and stabilize sales.

>The exits highlight the growing dichotomy between America’s highest-end shopping centers, the type with Tesla dealerships and Apple stores, and those on the lower end of the spectrum, which are struggling to fill space and attract national brands. The stores being closed by Sears are not profitable. And Macy’s chief executive, Terry J. Lundgren, said many of the stores it was closing were “no longer robust shopping destinations.”
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