Michael Kors is driving Macy's business into the ground
AP
The retailer's same-store sales growth has been weakening over the last several years, and Deutsche Bank analysts expect things to only get worse for the department store chain.
Deutsche Bank analyst Paul Trussell on Monday downgraded Macy's from "buy" to "sell," saying he has "low confidence that the company can bust out of its same-stores sales rut."
Sales declines at Michael Kors, one of Macy's key vendors, were cited as a primary reason for the downgrade.
"We are especially concerned as we see no obvious juggernaut to replace the lost dollars, and we note ongoing challenges at other key vendors as well," Trussell wrote, specifically naming Coach, Guess, and Ralph Lauren, as additional vendors that could cause problems.
Michael Kors' same-store sales declined 6.7% in North America during its most recent quarter. The company's shares are down 43% since the beginning of the year and nearly 52% in the last 12 months.
Getty
But Michael Kors isn't Macy's only problem.
Trussell also cited concerns about declining revenue from tourists, as well as a major shift in discretionary spending from products (like clothing) to experiences and technology.
Deutsche Bank
Macy's is also suffering from a shift toward direct-to-consumer business models, in which brands use their own websites to sell directly to customers without going through a department store like Macy's.
At a recent conference, Bloomingdale's Chairman and CEO Tony Spring said this changing landscape keeps him up at night.
"Our vendors are our partners and suppliers. But many have also become our competitors," Spring said at the Retail Marketing Society's "Reinventing the Store" conference in June, according to Trussell.
- I'm an interior designer. Here are 10 things in your living room you should get rid of.
- Higher-paid employees looking for work are having a tough time, and it could be a sign of a shift in the workplace
- A software engineer shares the résumé he's used since college that got him a $500,000 job at Meta — plus offers at TikTok and LinkedIn
- 7 scenic Indian villages perfect for May escapes
- Paneer snacks you can prepare in 30 minutes
- Markets crash: Investors' wealth erodes by ₹2.25 lakh crore
- Stay healthy and hydrated: 10 immunity-boosting fruit-based lemonades
- Here’s what you can do to recover after eating oily food
- Nothing Phone (2a) blue edition launched
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market