According to CNN Money, another quarterly loss for JCPenney is anticipated, while sales and profits are also expected to fall at Macy’s and Kohl’s.
That’s more bad news in what has already been a tough time for traditional brick and mortar retailers. Shares of Macy’s and Kohl’s are both down nearly 20 percent this year, while JCPenney’s stock has plunged more than 30 percent. Both Macy’s and JCPenney are closing stores, as well as Sears, which also owns Kmart.
In addition, Target said earlier this year it is planning to cut prices to attract more shoppers after its reported dismal sales for the holidays and warned that this year’s results will be much lower than expected. And Wet Seal, Aeropostale, Pacific Sunwear, American Apparel, The Limited, The Sports Authority and Payless have all recently filed for bankruptcy.
The biggest competition for these retailers is Amazon, which sells just about everything a consumer could want online, including food and clothing, and is also planning to open more physical stores. Walmart, which now owns Jet.com and other online stores, has also become an issue for struggling retailers. In fact, both companies have seen their stocks rise this year, with shares of Walmart up more than 10 percent Amazon’s stock up more than 25 percent.
Macy’s chief financial officer Karen Hoguet admitted that they underestimated the power of Amazon, saying during the company’s last earnings call in February that “we were not able to overcome the secular changes in the industry related to shopping habits” during the holidays. She added that “these changes appear to have had a bigger impact on our store business than we had expected. We recognize we need to make dramatic changes in how we operate the business.”
So, in order to survive and thrive, these traditional stores will have to boost their mobile and overall digital commerce operations in order to keep existing customers and attract new ones.