Friday's retail spending report from the U.S. Commerce Department's was disappointing news for shareholders of department store chains like Macy's (M 0.33%) and Kohl's (KSS +1.20%).
Although January's total retail consumption improved by a seasonally adjusted 0.3% from December's levels, spending at clothing stores fell by 3.1%. That was the largest drop for the category since 2009.
Image Source: Getty Images.
The data extends a long-standing period of weakness within the department store and apparel store segments of the retail industry. Census Bureau data indicates that spending at department stores has been steadily falling since 2000, largely coinciding with the advent of the internet as a means of shopping. As department stores shut down and malls shut down with them though, the brick and mortar retailing industry adds to its own headwind. A record-breaking 9300 stores shuttered for good in 2019, according to Coresight Research, and Bank of America reckons more than 4000 malls finally succumbed to the pressure those closures caused.
The industry's highest profile names are driving the trend. Macy's announced this week it intended to cull another 125 stores in the near future following a wave of closures that began in 2016. Kohl's announced this week it would be laying off 250 employees following a disappointing holiday season, after highlighting weakness in the all-important women's clothing segments as a reason for last quarter's earnings miss. J.C. Penney (JCP +0.00%) has shuttered more than 200 stores since 2009, though per-store sales and profits for the apparel chain continue to deteriorate.
There were some bright spots in the Commerce Department's report. Building supply stores experienced a 2.1% sales increase last month, and general merchandise stores improved sales by 0.5%.
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