Traditional department stores are having a tough go of it. Despite many store and online initiatives, the competition is taking its toll. And better times ahead do not seem in the cards for this sector, even though individual department stores may stay strong.
“Department stores continue to report woeful earnings, the only group of retailers that have lost money in the second quarter, according to research firm Retail Metrics in its report “Retail Headwinds Persist,” which includes an index of 116 chains. Losses have mounted for Sears in particular, according to the report (forwarded to Retail Dive), and operating income is expected to drop substantially for six of the eight publicly traded department stores. Just four of the eight (Macy’s, Kohl’s, Nordstrom, and Dillard’s) are expected to turn a profit in the quarter. Retail Metrics estimates that overall second quarter retail revenues will rise 2.9%, or 3.6% excluding retail giant Wal-Mart. Drugstores, home improvement stores, and personal care retailers like Ulta, along with “entertainment retailers” (a segment led by a smaller-than-expected loss at bookseller Barnes & Noble), are expected to experience at least modest growth.