The great hope of the holiday season has devolved into a grim reality for department stores, which Moody’s Investors Service said have a lot to prove this year.
“A dismal year will force department stores to accelerate change,” said debt watchdog Moody’s Investors Service in a dour new analysis that picks up a thread that’s existed in the equity markets for some time.
“Following a weak 2019, department stores must radically accelerate changes to their format and product offering in 2020,” the rating agency said. “The sector heavily underperformed the broader retail industry in 2019, despite continued investments and offering updates. Early holiday 2019 sales reports suggest that demand was weak for department stores despite holiday strength for most others. This is notable given the still-solid growth of the U.S. economy and the strength of consumer spending.”
Moody said some players — particularly Macy’s Inc. and Kohl’s Corp. — have been reducing their debt loads, but warned that the companies’ credit ratings won’t improve “unless they can quickly stabilize their business model.”
“Major investments in delivering value need to result in maintaining market share,” the analysis said.
Department store operators have been struggling to reinvent, but are still not trying to find enough traction to
“A dismal year will force department stores to accelerate change,” said debt watchdog Moody’s Investors Service in a dour new analysis that picks up a thread that’s existed in the equity markets for some time.
“Following a weak 2019, department stores must radically accelerate changes to their format and product offering in 2020,” the rating agency said. “The sector heavily underperformed the broader retail industry in 2019, despite continued investments and offering updates. Early holiday 2019 sales reports suggest that demand was weak for department stores despite holiday strength for most others. This is notable given the still-solid growth of the U.S. economy and the strength of consumer spending.”
Moody said some players — particularly Macy’s Inc. and Kohl’s Corp. — have been reducing their debt loads, but warned that the companies’ credit ratings won’t improve “unless they can quickly stabilize their business model.”
“Major investments in delivering value need to result in maintaining market share,” the analysis said.
Department store operators have been struggling to reinvent, but are still not trying to find enough traction to
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