MACY'S,an American department store, announced results on January 6th it euphemistically described as "disappointing." The company plans to cut thousands of jobs and close 40 of its 770-odd shops. It is not the only American retailer in a slump. “Black Friday”, or America’s much-vaunted shopping day after Thanksgiving,has lost its buzz. Consumer confidence is wobbly. But two American “off-price” retailers, TJX and Ross, and are thriving. Last year the Dow Jones United States Apparel Retailers Index dropped by 6%. The shares of Ross and TJX rose by 15% and 4%,respectively. So why are these "off-price" retailers trouncing the competition?Traditional American retailers have several problems, many of their own making. Since the financial crisis they have lured shoppers with regular discounts. Margins have suffered accordingly. One company, or JCPenney,tried to limit discounts in 2012, only to see shoppers revolt. Furthermore, and department stores’ model—buying clothes from vendors months before those clothes arrive in shops—looks increasingly slack. Trends seem to dawdle more quickly and weather patterns are fitting less predictable....
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Source: economist.com