With Macy's plans to close 125 locations over the next three years, experts warned that other major retailers such as Nordstrom and Kohl's could be following in their footsteps.
In a Business Insider report, UBS investing experts expressed concerns over the future of mid-tier retailers. Their message was clear: another wave of the 'Retail apocalypse' is on the horizon.
Beginning in 2017, various department stores began shifting from their brick-and-mortar business structure to a fully-online model.
Then hit with the pandemic and now facing climbing inflation, even more retailers are under pressure to close up shop at their unprofitable locations.
UBS noted that the retail industry lost 1,800 stores between January 2020 and March 2021.
"These trends are likely not good for department stores as both luxury companies, as well as off-price retailers, compete directly with department stores," wrote analysts Jay Sole, Mauricio Serna, Shoshana Pollack, and Tiffany Agard.
Pandemic aftershocks did not impact all stories equally. Those who survived, such as Macy's, Nordstrom's, and Kohl's turned to brand partnerships, beauty sales, and off-price stores to increase sales.
The beginning of 2022 was looking up for these retailers, finding that more shoppers were returning to travel, work, and socialize.
Unfortunately, sales have stalled yet again, with department stores like Nordstrom and Kohl's reporting lower third-quarter sales compared to last year.
Fears of a recession could be at fault for the less-than-impressive holiday sales trends.
Comment: It's not about imagined 'fears' of a recession, it's the consequence of 2 years of lockdowns and soaring inflation; it means people have less money to spend, and they don't feel confident in spending what they do have because they can also see that something is critically wrong with their country's economy, despite their government telling them otherwise.
Shoppers have turned to chains like Walmart, Costco, and TJ Maxx to save a few bucks, leaving mid-tier retailers especially vulnerable to financial strains.
Pointing to Commerce Department data, UBS analysts predicted department store sales will "remain under pressure" in the first half of 2023.
Representatives from Nordstrom and Kohl's did not immediately respond to the U.S. Sun's request for comment.
They evidently don't read ZeroHedge. Americans have maxed out their credit cards and driven up their debt simply to live. Who gives a damn about "fear of recession" when you're faced with the dilemma of paying your energy bill or buying food?
Inflation is eating people alive. More people than ever before are involved in the gig economy for a secondary income stream.
I can't complain, tho, about WalMart. Hadn't been in the store for nearly a year. Pre-Christmas arrived. I found grass-fed milk and grass-fed meats. They also had fresh bay leaves and organic shallots and onions along with a growing organic produce section. I had read an article about WalMart catering to upper-middle class tastes with more organic options as the economy tanked. Made a fantastic beef stew using Chef Marco Pierre White's method for Beef Bourgnine.