Bloomberg does holiday hit job on Macy's
Fending off media reports that your company is dying is not a good way to begin the holiday season.
Difficulties at Macy’s and other department store retailers have caused catchy, headline-friendly phrases such as “retail wreck,” and “retail apocalypse” to become part of the larger conversation about retail. The dour sounding phrases are in contrast to pockets of strength with specific companies (Walmart, Home Depot, Dollar Tree) and overall expectations that holiday season sales will set a new record. Virtually every forecast calls for holiday growth of 4% or more compared to last year. There is also the possibility that sales estimates prove conservative since forecasters have a tendency to play it safe in times of uncertainty. Few forecasts have mentioned the benefit higher end retailers are likely to experience due to the wealth effect caused by the surging stock market. Meanwhile, while lower income folks will enjoy a boost to their discretionary income caused by relatively low energy costs. The calendar is also retailers’ friend this year. Thanksgiving falls two days earlier this year and Christmas day is a Monday compared to Friday last year, ensuring the weekend before Christmas will see high levels of promotional activity and huge sales.
Despite some compelling reasons to be optimistic about holiday spending and a rising tide lifting all boats, several recent articles by Bloomberg paint the industry, and Macy’s in particular, with a broad “retail apocalypse” brush. Just prior to Thanksgiving, the news outlet portrayed Macy’s in an unflattering light and several weeks earlier a piece focused on retailers’ debt levels also reinforced the “retail wreck” theme.