Hours after President Trump said Sunday he had "second thoughts" about escalating the trade war with China, the White House sought to explain his remark because it was...Politicsread more
Clouding the G-7 gathering, which represents the world's major industrial economies, are the tit-for-tat tariffs between Washington and Beijing.Politicsread more
President Donald Trump said that he would have a major trade deal with U.K. after it leaves the European Union.Politicsread more
President Donald Trump said Sunday he was not happy after North Korea launched short-range ballistic missiles over the weekend.Politicsread more
The Goldman Sachs technology M&A team, led by Sam Britton, has cashed in on its software focus and decades of experience to dominate 2019's biggest deals.Technologyread more
Carl Medlock used to work at Tesla. Now he's one of the few people in the U.S. that can fix the company's original Roadster electric vehicles.Technologyread more
American small and medium-size companies that rely on China are scrambling to adjust their business plans in response to the escalating trade war.Traderead more
Here are the products that stand to be the most affected by China's new tariffs on $75 billion worth of U.S. goods.Marketsread more
The summit comes amid fears over a global economic slowdown, and U.S. tensions over trade allies, Iran and Russia.Politicsread more
The world's second biggest economy is past a point where it cannot ignore its enormous debt anymore, according to an analyst.China Economyread more
Trump does have some powerful tools that would not require approval from U.S. Congress.Politicsread more
It should come as no surprise that U.S. department stores fared, for the most part, much worse than their other retail peers in 2017.
Faced with the rise of internet shopping hubs such as Amazon, the threat of fewer consumers going to malls to make purchases, a glut of unsold and out-of-style inventory, and big debts coming due, companies including Macy's, Sears and Kohl's are still trying to reinvent themselves in a new age of retailing.
Some of their latest strategies have included opening smaller-format stores and closing less-profitable larger locations, partnering with in-demand apparel brands, making enhancements to mobile apps, and trying to amass a more loyal customer base.
To be sure, Macy's, Sears, Kohl's, J.C. Penney, Nordstrom and Hudson's Bay (the parent company of Lord & Taylor and Saks Fifth Avenue) have all set different goals to achieve in the coming months. Though these department stores are dealing with many of the same headaches, it would be wrong to think they can all come up with the same solutions.
"I think the story of department stores is closely twinned with the story of the shopping mall," Vicki Howard, author of the book "From Main Street to Mall: The Rise and Fall of the American Department Store," told CNBC. "Can [mall] developers continue to find ways to make things appealing? That would be something that could benefit department stores as closures continue."
"These trends usually have deep roots," Howard added about what's happened to department stores in 2017. "I think their fate, in a way, has been written for quite a while now. And their future will depend first on the decisions each of these brands are making, while they also feel the effects of long-term trends."
Among other things, 2018 will bring new management for some department stores, the deepening of strategic partnerships with retailers including Walmart and Nike, more restructuring of real estate, and inevitably elevated talk of Amazon and other influential online players.
Macy's heads into 2018 with a new CEO, after Terry Lundgren, who was at the company's helm since 2003 stepped down from that position earlier this year. Now, new leader Jeff Gennette has said he aims to get the department store back to reporting same-store sales growth, after numerous quarters of declines.
Macy's in particular will focus efforts on expanding its off-price nameplate, Macy's Backstage, as the company is beginning to take excess space in its stores to dedicate to the less-expensive apparel. The retailer hopes it might be able to build on the momentum that off-price retailers including T.J. Maxx and Ross Stores have experienced this year.
Meantime, Macy's is also in the midst of , in a push that appeals to the retailer's most frequent and dedicated shoppers. Industry advisors say it's vital for companies to maintain these sorts of offerings, integrated into an easy-to-use mobile app, in order to compete with the likes of Amazon and Walmart today.
Macy's has also said it makes nearly 50 percent of its $25 billion in annual sales from the top 10 percent of its customers, or those who have been considered "platinum." Next year, the company plans to offer "experiential benefits" to its most loyal customers, where shoppers have a chance to win access to Macy's-exclusive experiences.
Looking to its valuable real estate portfolio, in 2018 Macy's will continue to explore options that include selling off flagship stores. The company announced roughly one year ago that it had hired Brookfield Asset Management to help generate money from certain assets, including Macy's historic location in the center of New York's Herald Square.
When Macy's reported its 2016 holiday sales in January of this year, the company said it would be moving forward with closing roughly 100 stores "over the next few years."
The end of 2017 looks to be a mix of both good and bad news for J.C. Penney and its CEO, Marvin Ellison, who's served in that capacity since August 2015.
The company, like Macy's and some of its other peers, has , and many analysts have taken note of Penney's bigger marketing push around the season this year and what appeared to be longer lines of shoppers throughout its stores.
To be sure, J.C. Penney took a hit in late October after slashing its full-year profit and comparable sales forecasts, as Ellison explained the company had been discounting heavily to get rid of excess inventory, mainly in the competitive women's apparel category.
With much of that liquidation behind it, though, J.C. Penney has said it will put future funding toward investing in "new and trending merchandise categories" in 2018. As Sears has lost some of its appliances business, for example, J.C. Penney has picked up some shoppers' dollars in this category, and the company also has benefited from a strategic partnership with Sephora, opening pint-sized beauty boutiques inside its department stores.
In late February of this year, J.C. Penney announced plans to close roughly 140 stores in a bid to cut costs and focus on its most profitable locations (this followed similar news from Sears and Macy's). At the time, J.C. Penney said it expected the closures to save it some $200 million a year, which would help Ellison and his team whittle down its more than $4 billion in long-term debt. Nonetheless, analysts are still speculating there will be more closures to come in 2018.
The parent company of Sears and Kmart stores has had another rough ride this year after revealing in a March filing with the Securities and Exchange Commission, "Our historical operating results indicate substantial doubt exists related to the company's ability to continue as a going concern."
Still, CEO Eddie Lampert has made moves since then in a bid to return to profitability, including closing additional underperforming stores, striking a deal to relieve the retailer from contributions to its pension plans for the next two years, extending debt that's coming due while seeking new financing, and , for example one that only sells mattresses and appliances.
While Sears' same-store sales continue to tumble at a rapid clip, the company has said it plans to return to positive adjusted EBITDA in 2018.
Meantime, investors are watching to see how a recent partnership with Amazon pans out, where Sears now sells its Kenmore appliances and Diehard car battery brand on Amazon.com. Having dealt with numerous vendor disputes this year (one that led to Sears severing century-old ties with Whirlpool), the company has made it clear it plans to focus more on the growth of its own labels.
As Sears tests its smaller concept stores, a handful of real estate investment trusts are also working with the department store chain to either redevelop existing locations, scaling them down and making them more appealing to customers, or buying Sears out of leases altogether and re-tenanting those properties.
When it pays more than $400 million to its pension plan, Sears will unlock roughly 140 properties from a so-called ring fence agreement, which would allow for the sale of those stores. Though the company hasn't said when any transactions might take place, analysts are anticipating more closures to come in 2018.
2018 could be the year for Nordstrom to finally go private.
The department store chain in June of this year appointed an independent special committee to evaluate doing so, but those efforts were eventually called off for the remainder of the year, with the Nordstrom family reportedly having trouble completing financing for such a deal ahead of the holiday season.
The appeal in going private still is that Nordstrom would be able to make investments to adapt amid a changing retail landscape without worrying about shareholders' reactions in the near term. To be sure, it's become increasingly difficult for retailers to achieve such a feat, especially as banks become more wary of difficulties within the industry.
Meantime, Nordstrom is making progress on some of its own initiatives to combat falling foot traffic, one being the pilot of a smaller-format store () that doesn't hold any inventory for sale but instead serves as a place for shoppers to try certain items on, pick up online orders, get their nails done or have clothing tailored to fit.
Nordstrom is also betting that its off-price division, Nordstrom Rack, will be a bright spot for the company next year, as it opens a handful of new locations in the U.S. and Canada. In its latest earnings report, though, same-store sales at Nordstrom's discount concept disappointed, dragged down by unpopular goods. That was partially offset by stronger performance online, which not all department store chains are able to boast about.
Compared with its competition, Nordstrom's store base is smaller and thus less likely to be slimmed down anytime soon. By the end of 2019, Nordstrom is expected to have completely opened its first full-line department store in New York, which includes a separate men's shop that will open earlier in 2018.
Kohl's will see new leadership in 2018, as CEO Kevin Mansell retires to be succeeded by Michelle Gass, currently the retailer's chief merchandising and customer officer.
It's worth noting that Gass has spearheaded some of Kohl's latest initiatives, including that has everyone wondering what the next steps might be.
Already, Amazon is operating a handful of kiosks inside Kohl's stores (to sell tech gadgets), and Kohl's is testing handling Amazon returns at some locations in a bid to bring more customers inside its doors. Instead of trying to fight Amazon, Kohl's jumped at the opportunity in 2017 to work directly with the internet giant, and analysts are already speculating that the department store chain's locations could soon become a testing ground for other Amazon merchandise.
Meantime, Kohl's is one retailer not having to close as many stores, and the company isn't expected to do so (like its peers) on a large scale in 2018. Instead, Kohl's is typically situated off-mall, either standing alone or in a shopping center, thus it hasn't suffered from a decline in mall traffic.
In 2018, Kohl's hopes it will see another boost in sales of athletic apparel, with brands including Nike, Under Armour and Adidas performing well for the company in recent quarters. To be sure, Nike has also said it will begin pulling merchandise next year from third-party retailers, focusing on selling directly to consumers, though it hasn't specified exactly where those cutbacks will be.
Bringing experience from a prior gig at Starbucks, which has one of the most well-known loyalty programs globally, incoming Kohl's CEO Gass will also continue to update Kohl's Yes2You Rewards program, which launched in 2014 and has since amassed some 30 million active users. The company has said there will be additional modifications coming to the Kohl's app and loyalty program in 2018.
The Canadian-based parent company of department store chains Lord & Taylor and Saks Fifth Avenue has increasingly been in the spotlight this year ever since activist group Land & Buildings Investment Management urged the company to either explore monetizing its real estate or go private.
In its latest quarter, Hudson's Bay's profit margins were whittled away due to more promotions and clearance sales, but management tried to calm analysts and investors' fears by saying the company plans to hold less inventory in the future to avoid such problems.
In 2018 and the years after that, the company has also said it plans to make a bigger push online and is expected to spend roughly a third of capital expenditure on its digital platform over the next few years, up from about 25 percent today.
This past October, it was announced that Lord & Taylor's flagship store in Manhattan would be sold to SoftBank-backed shared workspace provider WeWork in a bid to curtail Hudson's Bay's debt as losses mount and same-store sales dip. Around that same time, CEO Jerry Storch abruptly stepped down from the company, leaving Executive Chairman Richard Baker to assume the position while a search for a new leader has been underway.
that Baker was trying to raise equity to fund a take-private of the company. About a month later, about any progress on those goals, "We're positioning ourselves to win, and that's what this is all about."
Against a backdrop of namely negative news, a partnership with Walmart, where it will open somewhat of a "store within a store" on Walmart.com in the spring of 2018. The deal between the two will help Walmart become more of a fashion destination online, while Lord & Taylor also aims attract new shoppers to its brands and build a stronger digital presence.
"As with any business, especially retail, if you aren't going to keep evolving, eventually you will go out of business," Kathy Gersch, a former Nordstrom executive and currently executive vice president of Kotter International, which helps companies implement strategies, told CNBC.
"I think as online retailers continue to get more sophisticated about how to sort and deliver merchandise to people in a more consumable way, they will continue to gain the advantage" over department stores, she added. "The problem department stores have is what was once a big advantage — having a big footprint — now is a disadvantage."