Please ensure Javascript is enabled for purposes of website accessibility

Why Macy's Inc. Stock Was Sliding Today

By Jeremy Bowman - Oct 2, 2017 at 12:59PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of the department store chain fell on negative news in the sector.

What happened

Shares of Macy's, Inc. (M -3.33%) were heading lower today on a broader sell-off among retail stocks. 

While there was no direct news on Macy's, department store stocks sold off after Nordstrom Inc's (JWN -4.17%) attempt to go private appeared to hit a roadblock. 

As of 11:43 a.m. EDT, Macy's shares were down 5%, while Nordstrom, J.C. Penney (JCPN.Q), and Dillard's (DDS -2.06%) were also down sharply.

The exterior of Macy's flagship store in Manhattan

Image source: Macy's.

So what

The Nordstrom family has been seeking partners to take their namesake company private for several months, but The New York Post reported last night that the talks were "faltering." The Nordstrom family had worked with Leonard Green & Partners and other private equity firms, but the financing has not materialized and the deal appears to be "deep trouble." 

That news cast a pall on Macy's and its peers as it could indicate lackluster interest in the department store sector as a whole.

Separately, another report showed that mall vacancies increased 8.3% in the third quarter and construction activity on shopping centers fell 49%, another sign that declining mall traffic is only going to get worse.

Now what 

Macy's shares approached a 52-week low on the news as the company continues to struggle with the shifting dynamics in the retail industry. The company has modified its strategy by acquiring beauty brand BlueMercury, opening off-price Backstage stores, and selling off valuable downtown real estate, but none of those initiatives have reversed falling sales or inspired confidence among investors.

After today's news, that trend seems likely to continue.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Macy's, Inc. Stock Quote
Macy's, Inc.
$18.73 (-3.33%) $0.65
J. C. Penney Company, Inc. Stock Quote
J. C. Penney Company, Inc.
Dillard's, Inc. Stock Quote
Dillard's, Inc.
$243.00 (-2.06%) $-5.11
Nordstrom, Inc. Stock Quote
Nordstrom, Inc.
$22.30 (-4.17%) $0.97

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.