They rose around 1% despite a strong economy, alarming investors and sending stocks of retailers‘ into a tailspin.
NEW YORK — Many investors had expected department stores to enjoy robust sales over the holidays in light of an economy buoyed by low unemployment, higher wages, strong consumer confidence and cheap gas.
So when Macy’s and Kohl’s reported lackluster numbers Thursday, they were taken aback, sending retail stocks into a tailspin and calling into question whether such mall-based chains can compete in a changing landscape where shoppers are shifting more of their spending online.
Macy’s saw only a slight increase of 1.1 percent in sales during November-December at stores opened at least a year. And while sales were strong during Black Friday and Cyber Monday, the company said sales fell off noticeably until the week of Christmas.
Meanwhile, Kohl’s reported a small sales growth that showed a dramatic slowdown from a year ago. Comparable sales rose 1.2 percent, versus 6.9 percent in the previous year.
Shares of Macy’s plummeted more than 19 percent, on track for the worst day ever.
