5 Things That Defined 2016’s Year In Retail
For all the factors in their favor in 2016—falling unemployment, a recovering housing market, low gas prices and (slowly) rising wages—many large U.S. retailers had a pretty crummy year.
Companies like Target, Kohl’s and J.C. Penney suddenly found their turnarounds in question after comparable sales unexpectedly started to decline again. Others, like long-time winners Nordstrom and Neiman Marcus were suddenly confronting a so-far unstoppable drop in business at their luxury department stores. This in a year that saw Wall Street bonuses soar and the stock market hit records, factors that typically help upscale stores. And Macy’s continued to lose market share to more nimble rivals like T.J Maxx and Ulta Beauty, and is expected to slip behind Amazon.com as the top seller of apparel in the country next year. The retail pain was particularly acute for smaller, specialty chains. Aéropostale filed for bankruptcy protection, at least emerging as a much smaller chain, while American Apparel filed for Chapter 11 for the second time. Comparable sales continued to skid at Gap Inc and Abercrombie & Fitch as their attempts to push back at Zara, H&M and Forever 21 largely failed. What’s more, most stores failed to find much solace online, with big strides in e-commerce insufficient to make up for sharply declining store sales. Some like Barnes & Noble even managed to see online sales fall. Nordstrom took a nearly $200 million write down on its purchase of Trunk Club. And Neiman’s online sales growth stalled. Amazon, which alone commands about 30% of U.S. online sales, seems to be running away with the prize, despite its brick and mortar rivals’ best efforts. Still, there were some bright spots: Walmart continued its comeback, using its stores as an advantage over Amazon.com for things like grocery pickup and seeing online growth resume after adding millions of items to its marketplaces. Home Depot continued to ride the housing recovery. And off price chains like T.J. Maxx and Ross Stores’ continued to boom. Read more at Fortune.
