Shoppers are increasingly flocking online and buying experiences, hurting traditional retailers like Macy's and Kohl's. Fred Katayama reports.
A surprisingly dismal holiday season at department stores. A number of analysts slashed their price targets Thursday on the stocks of Macy's and Kohl's. Both chains cut their profit forecasts for the full year Wednesday after reporting falling sales at existing stores in November and December. Their shares dropped sharply at the start of trading, pulling down other traditional retailers like J.C. Penney and Nordstrom as well. The National Retail Federation forecasts holiday sales will rise 3.6 percent, but apparently, much of that growth is coming from online. Amazon said it had its "best ever" holiday season. Also hurting department stores: consumers are spending less on clothing and shelling out more on experiences like travel and dining out. Cowen analyst Oliver Chen said, "Holiday sales misses from Kohl's and Macy's demonstrate rough road for mid-tier retailers as we think off-price retail, Amazon, specific luxury brands, or better curated stores are gaining share." As for the road ahead, Macy's says it expects same store sales to fall this year as it closes dozens of stores.