The official 2019 tally is in — and it’s as bad as feared for the traditional fashion retail set.
Department stores sales dropped 5.5 percent last year to $135.1 billion, according to the Census Bureau’s latest revenue reading on Thursday. That came on top of a 1.2 percent decline in 2018.
Apparel and accessories specialty stores held together better, but are still slipping. Sales for the sector fell 0.6 percent to $268.7 billion for the year, marking a retreat after 2018’s gain of 4.6 percent.
Some of the ground lost has been made up online. Nonstore retailers — a category that covers all sales online and not just apparel — drove revenues up 13.1 percent last year to $778.4 billion.
Some individual companies are beating expectations — and being rewarded handsomely by Wall Street.
Signet Jewelers, which has 3,300 stores under a host of names, including Kay Jewelers, Zales and Jared, said its same-store sales in North America were up 2 percent over the holiday season and that fourth-quarter adjusted profits per share would total $3.44 to $3.52.
That was much stronger than the EPS of $3.11 analysts projected and drove the stock 39 percent to $29.83 in a dramatic morning of trading.
But fashion’s traditional brick-and-mortar crowd, including Macy’s Inc., Kohl’s Corp., J.C. Penney Co. Inc. and the like, still have stores as a central part of their business and are trying to figure out how to make it all work together.
The general strength of other categories of retail only underscores just how much department stores need to update their business models to meet current consumer needs.
Total retail and food service sales rose 3.6 percent last year, with a 4.4 percent rise at food services and drinking places, a 4 percent gain in motor vehicle sales and a 3.1 percent increase for health and personal care stores.
Moody’s Investors Service called it “a dismal year” for department store this week and said the sector “must radically accelerate changes to their format and product offering in 2020.”
Mickey Chadha, vice president at the debt watchdog, said on Thursday that the consumer will keep churning away and the winners will keep winning.
“We continue to expect that increased consumer confidence, wage growth, low unemployment and the continued GDP growth in the U.S. will result in 2020 retail sales growth of over 3.5 percent led by e-commerce players like Amazon, off-price retailers like TJX and Ross, value and convenience oriented retailers like Dollar General and Dollar Tree, and discounters and warehouse clubs like Walmart and Costco,” Chadha said.