NEW YORK — The holiday
season was a brutal one for U.S. retailers, especially department
stores and companies that sell luxury products, and companies and
investors alike didn’t see it coming.
The U.S. economy has been growing at a steady pace, and unemployment
is low and consumer confidence is high. That seemed to set the stage
for strong sales over the holidays, but companies including Macy’s,
Nordstrom and Signet all said they struggled badly over the critical
December shopping period.
The stock market itself may have been part of the problem: extreme
volatility in December may have shaken up wealthy shoppers more than
it hurt average consumers.
Earlier this month, Macy’s suffered the biggest one-day stock drop
in its history as a public company. The retailer said sales fell off
after Black Friday and Cyber Monday until the week of Christmas, and
it cut its sales forecast. The surprise report rattled companies
throughout the industry.
The next week, Nordstrom helped confirm the trend when it said sales
of full-priced clothes slowed in November and December and that the
company offered more discounts.
Signet Jewelers, the owner of brands including Kay and Jared,
dropped almost 25 percent after saying its holiday season had been
difficult and slashing its annual forecasts. Signet said competition
grew tougher in December and sales of some key products were weak.
The company also said fewer customers came to its stores last month.
Iconic jeweler Tiffany said uncertainty surrounding the stock market
and Britain’s departure from the European Union also hurt its sales,
along with protests in France that forced it to close a store during
Tiffany became the latest luxury brand to run into trouble. Several
companies have said in recent months that shoppers from China have
also cut back on spending as the Chinese economy weakened, and the
strong dollar has made it more expensive to buy Tiffany jewelry
outside of its stores in China.
Hard times for department stores and luxury companies don’t mean the
entire holiday shopping season was a total disaster. Experts believe
shoppers spent more money online than any other year. That’s bad for
mall-based retailers, and the trend toward shelling out for
“experiences” like spas and restaurant meals might be making things
Investors are also being deprived of data they might appreciate at a
time like this. The Commerce Department isn’t issuing its monthly
report on retail sales or a great deal of other economic data as a
result of the partial shutdown of the federal government.
As of Wednesday, the shutdown has lasted more than a month, and
federal employees have either been furloughed or are working without
paychecks, and some government contracts or services have been
disrupted. While federal employees will eventually be paid back,
experts say consumer spending and economic growth might still be
hindered in a significant way.