In any competition, there are winners and losers. And among retailers competing for customers, the winners of 2018 beat their rivals by providing faster delivery, better online and mobile shopping options, and the trendiest products.
Those who failed or were slow to adapt — Bon-Ton, Sears, Mattress Firm and David’s Bridal were among the slew of retailers that filed for bankruptcy in 2018. Toys R Us also closed all of its stores after filing for bankruptcy near the end of 2017.
U.S. department store chains are struggling more than ever headed into the new year. The products they sell from the likes of Nike or Coach can just as easily be bought directly from those brands’ own stores or online. Department stores accounted for 14.5 percent of all retail purchases in 1985 in North America. Last year, that fell to 4.3 percent and is still dropping, according to Neil Saunders, managing director of GlobalData Retail.
J.C. Penney, for instance, heads into 2019 with a bleak outlook; its stock fell below $1 per share for the first time last week. Meanwhile, Hudson’s Bay, the parent company of Lord & Taylor and Saks Fifth Avenue, has been shutting some of its flagship stores in the U.S. Separately, Neiman Marcus has significant debt coming due in 2020 and 2021.
“It’s a continual challenge for department stores … to define who they want to be in this new era,” Ryan Fisher, a partner in consultancy firm A.T. Kearney, told CNBC. “To me the pressure is on them in 2019 to push their online and in-store experiences.” And many department store operators still have too much bricks-and-mortar space that needs to be “rationalized,” he added, meaning more store closures by some of these businesses are inevitable.
An early look at sales data by Mastercard during the weeks leading up to Christmas Eve found overall transactions at department stores were down 1.3 percent from a year ago. Foot traffic at some malls — where department stores are anchor tenants — was also noticeably lighter during parts of the holiday season, including Black Friday weekend.
But that doesn’t mean consumers weren’t whipping out their wallets and filling their shopping carts ahead of the new year. Many headed in throngs to off-price retailers like T.J. Maxx and big-box chains like Walmart. Here’s a better look at some of the winners in retail to round out 2018.
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