For retailers, a tepid holiday season prompts a cautious approach to messaging

As shoppers move online—and away from brick-and-mortar stores—large chains’ optimism gives way to concerns about the sector. How, now, do they retain customers and investors?

Some retailers are struggling to put a sunny cast on gloomy reports about holiday shopping.

Others, including Nordstrom, are laying it on the line as the sector grapples with an uncertain future.

Nordstrom missed targets and has announced it will adjust dividends to compensate. The news comes after other retailers, including Macy’s and Kohl’s, shared disappointing figures for the holidays.

Nordstrom wrote in a viscous press release:

While year-to-date comparable sales of 2.1 percent were in-line with the Company’s prior outlook of approximately 2 percent for fiscal 2018, Full-Price sales were below the Company’s expectations. As a result, the Company has incorporated in its annual expectations higher markdowns taken during holiday and to reposition inventory to a more appropriate level by the end of the year. Earnings per diluted share is expected to be around the low end of the Company’s prior outlook range of $3.27 to $3.37, including the third quarter estimated non-recurring credit-related charge of $0.28, or for comparability, $3.55 to $3.65, excluding the impact of the charge.

The Company remains committed to achieving its long-term financial targets, which supports three strategic objectives in driving higher shareholder returns: continuing market share gains, improving profitability and returns and maintaining disciplined capital allocation.

The spate of disappointing reports has many questioning the future of some legacy retailers.

CNBC reported:

The dismal results have some analysts wondering just how bad department store operators have it today, as more spending moves online and foot traffic shifts away from stale shopping malls. The bankruptcies of chains like Bon-Ton, Toys R Us and Sears don’t appear to benefiting others in the industry.

“We see Bon-Ton’s filing [for bankruptcy] as a cautionary tale of what happens when department stores become too highly leveraged while falling too far behind the competitive pack,” Moody’s analyst Christina Boni said in a note to clients. “The market’s growing impatience will be putting a brighter spotlight on struggling companies like J.C. Penney during 2019. ”

Macy’s has also shared bad news in 2019. The retailer turned to its CEO to deliver holiday sales figures and provide guidance for the future.

CNBC reported:

While the holiday season started strong during Black Friday weekend, it “weakened in the mid-December period and did not return to expected patterns until the week of Christmas,” CEO Jeff Gennette said in a statement released before the markets opened. Online sales in November and December as well as at stores operating for at least 12 months were up a combined 1.1 percent, Macy’s said.

[…]Faced with these challenges, Gennette said Thursday that Macy’s “will continue to take the necessary steps in January to ensure a clean inventory position” this year.

Kohl’s has made cuts, closing four stores and a customer service office.

Dallas News reported:

Kohl’s plans to close its Dallas customer service center that employs 300 people, consolidating those jobs into similar operations in San Antonio and Milwaukee.

The Wisconsin-based retailer also will offer a voluntary retirement program companywide to workers 55 and older with at least 15 years of experience. The post-holiday moves were disclosed after the company reported November-December sales increases of 1.2 percent, which disappointed investors hoping for more robust growth.

The Dallas customer service center at 17655 Waterview Parkway will close in March, said Jen Johnson, Kohl’s senior vice president. The Milwaukee center will gain 100 jobs from the consolidation, while San Antonio will expand by 300 workers.

However, Kohl’s was upbeat in its earnings report.

It shared in its newsroom:

“We are delighted with our 1.2% shifted comparable sales increase for the Holiday period, which builds on the positive momentum we have achieved throughout the year,” said Michelle Gass, Kohl’s chief executive officer. “The organization once again delivered a very strong holiday that topped last year’s exceptional holiday season. The strong performance we achieved this holiday reflects the compelling product offering, great marketing strategy, and consistent execution in stores and online. We are particularly pleased with the positive transaction growth and the double-digit digital growth we experienced this holiday, as our customers continue to embrace the omnichannel investments we are making.”

Gass continued, “I want to thank all of our teams across the Company who created and executed a great holiday plan and a wonderful experience for our customers.”

On social media, Nordstrom hopes to demonstrate it is adapting to the times, including updating its newsroom:

Macy’s is trying to showcase savvy leadership:

However, investors remain skeptical of the potential growth left for these retailers, which might not be able to afford many more disappointing holiday seasons.

What do you think of these messages, PR Daily readers?

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