NEW YORK, United States — After a bruising year, US department stores and apparel retailers will seek to bounce back in 2020 by closing more locations, shrinking their shops and adding more experiences to attract customers — like old-fashioned tailoring and trendy in-store cafes.
This year, it was clear that both categories lost ground as consumers continued their steady migration to Amazon.com Inc. and other competitors. While traditional retailers like Macy’s Inc. and Gap Inc. have invested in e-commerce and a better in-store experience, it’s in doubt whether that will be enough to restore their former stature.
Department stores were the worst sector on the S&P 500 this year, and Macy’s and Gap, along with Kohl’s Corp., L Brands Inc. and Nordstrom Inc., were among the poorest-performing individual stocks in the index. Revenue has flattened for many companies, with department stores and apparel chains losing market share to online and discount retailers like Ross Stores Inc. and TJX Cos., which owns Marshalls and T.J. Maxx.
Meanwhile the retail apocalypse has dragged on. More than 7,600 stores closed this year through October, a record for that point in the year, according to Credit Suisse. And the outlook for 2020 doesn’t look any brighter, the firm said. The sector’s woes are particularly troubling given the strength of the American consumer: If these retailers can’t capture growth amid higher spending, the outlook could get darker if an economic slowdown materialises.