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Who Won and Lost the Holiday Season for the Retail Industry?

As retail experts take a look at Amazon’s record-breaking 2015 holiday season, the question needs to be asked: can the 20th century retail model of big stores packed with boatloads of merchandise coexist with today’s growing digital world of e-commerce retail?

Michael Lasser, a retail analyst with UBS said that “Although the holiday season was a good one for the retail industry overall, e-commerce was the clear winner. The overall strength was driven largely from online sales… Much of this likely came at the expense of B&M (brick-and-mortar retailers),” he said.

When the dust settles, it likely will turn out to be a mixed bag of winners and losers, while steep discounts and early-in-the-season promotions are expected to place pressure on margins, leading to forecasts for slim fourth-quarter earnings growth for retailers overall.

Amazon and other Internet sellers challenge was underscored by Macy’s announcement last week that it will close about three dozen stores and lay off thousands after same store sales fell nearly 5 percent. Macy’s move came just two months after Target announced it would close 13 stores by the end of this month. They have yet to publish their numbers.

- Digital Partner -
  • Costco Wholesale turned in a 1 percent rise in December same-store sales, ahead of an expected 0.8 percent gain. But its US same-store sales rose 5 percent, just shy of their forecast of 5.4 percent.
  • Victoria’s Secret parent L Brands led the pack with a stellar 8 percent rise decisively beating their forecast of a 3.8 percent increase.
  • Stein Mart saw a 1.8 percent rise in December same-store sales, the complete opposite of their forecast of a 1.7 percent decline.
  • Signet Jewelers reported a 4.9 percent rise in same-store sales and shares climbed 4.7 percent.
  • JCPenney realized some success in its long-running turnaround efforts, with same store sales rising nearly 4 percent for the holiday.

On the flip side, Finish Line posted a 5.8 percent decline in third-quarter same-store sales and watched their shares drop almost 10 percent to $16.70. Meanwhile Gap reported a 5 percent decline in December same-store sales. Gap had predicted a 3.9 percent deficit.

Ken Perkins, president of Retail Metrics says “The holiday season saw a shift in consumer purchasing in terms of how and what they purchased. A lot more spending was done online and big ticket items took a bigger share of the spending pie during the holiday season,” he said.

As for online activity, sales were brisk during the holidays. E-commerce platform provider MarketLive says there was an 8 percent year-over-year increase in online sales for the 2015-holiday season. Traffic increased 21 percent from a year ago, MarketLive said.

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