Sliding sales stoke fears for US department stores
Weaker-than-expected sales at several US department store chains reignited concerns about the US retail sector and prompted investors to offload shares.
Macy's said like-for-like sales fell 4.6% in the first quarter compared with the same period last year.
The decline sent shares in Macy's, which also owns Bloomingdales, down 17% on Thursday.
At Kohl's, like-for-like sales slid 2.7% and were down 0.8% at Nordstrom.
Shares fell close to 8% for both retailers, while Sears sank almost 10%
Hudson's Bay Co, which owns chains including Saks Fifth Avenue, said its same-store sales fell 2.9%.
Jeff Gennette, Macy's chief executive, said the company was well aware of the challenges it faced.
"These are unusual and challenging times for retail, especially for mall-based stores. We certainly know these changes that we're seeing are ... not cyclical," he said.
Some analysts said the decline in department store sales point to broader weakness in consumer spending - a key driver of economic growth.
"It's a gut check about the health of the consumer," said Phil Blancato at Ladenburg Thalmann Asset Management. "It's a canary in the coal mine moment."
The US Commerce Department will release retail sales figures on Friday that are expected to further underline online sales growth outstripping those at brick-and-mortar stores.
Nordstrom, which has more than 340 stores in the US and Canada, said about a quarter of sales in the three months to March were online.
It has tried to counter the rise of rival online retailers by opening more of its discount Rack stores, investing in the popular online menswear brand Bonobos and other tweaks such as speeding up its website.
Macy's is adding discount areas to its stores, striking deals to stock exclusive fashion lines, and making it easier for customers to try on shoes without a sales assistant.
Macy's chief financial officer, Karen Hoguet, said putting collection points for online purchases at the front of the store - rather than forcing customers to find their way to a counter at the back - has actually boosted sales.
Mr Gennette, who took over in March, said Macy's hoped to introduce a new store format next year, but the company is still forecasting a fall in sales for the full year.
"How and when will you grow again is what's been on your mind," he told analysts. "We certainly don't have the answers yet, but we're working on them with great urgency."
Neil Saunders, managing director of GlobalData Retail, said Macy's now has a "better sense of direction" than it once did, but added: "However, the distance it needs to travel over the next few years is enormous.
"We question whether the company is bold, nimble or healthy enough to cover such ground."
Macy's profits fell 39% to $71m in the quarter compared with the same period last year.