Macy's Herald Square store has been hurt by a decline in tourism. Fewer international travelers are visiting the U.S. because of the strong dollar. Photo: Michael Nagle/Bloomberg News.
By Suzanne Kapner
Nov. 11, 2015
For more than a decade, Macy's Inc. boss Terry Lundgren has defended the traditional department store gobbling up other retailers, testing out new selling formats, and trying to clamp down on discounts, to name a few tactics.
Now, after years of strong growth, Macy's faces a crisis. On Wednesday, the company said sales declined 5.2%, worse than analysts had feared. And the retailer, which is heading into the crucial holiday season with piles of unsold goods, also warned that it expects comparable sales this fiscal year to decline, compared with previous guidance for sales to be unchanged.
By Wednesday afternoon, shares of Macy's fell 14% on the news, to $40.44; the stock has dropped nearly 40% this year.
The retail industry is going through a tough period, said an unflustered Mr. Lundgren on a conference call with analysts. Later, he added, I'm certain we will come up with some creative ideas that will surprise people.
He noted that while consumer spending seems healthy, many shoppers are buying goods and services that department stores don't carry, such as cars, electronic gadgets, and home improvement items.
What is the primary issue that you identify affecting Macy's and how may it be resolved?
Macy's Herald Square store has been hurt by a decline in tourism. Fewer international travelers are visiting the U.S. because of the strong dollar. Photo: Michael Nagle/Bloomberg News.
By Suzanne Kapner
Nov. 11, 2015
For more than a decade, Macy's Inc. boss Terry Lundgren has defended the traditional department store gobbling up other retailers, testing out new selling formats, and trying to clamp down on discounts, to name a few tactics.
Now, after years of strong growth, Macy's faces a crisis. On Wednesday, the company said sales declined 5.2%, worse than analysts had feared. And the retailer, which is heading into the crucial holiday season with piles of unsold goods, also warned that it expects comparable sales this fiscal year to decline, compared with previous guidance for sales to be unchanged.
By Wednesday afternoon, shares of Macy's fell 14% on the news, to $40.44; the stock has dropped nearly 40% this year.
The retail industry is going through a tough period, said an unflustered Mr. Lundgren on a conference call with analysts. Later, he added, I'm certain we will come up with some creative ideas that will surprise people.
He noted that while consumer spending seems healthy, many shoppers are buying goods and services that department stores don't carry, such as cars, electronic gadgets, and home improvement items.
What is the primary issue that you identify affecting Macy's and how may it be resolved?
