It's been a rough year for the retail sector. Storied names such as Macy's (NYSE:M), Nordstrom (NYSE:JWN), and J.C. Penney (NYSE:JCP) have all seen their shares pull back in recent months amid disappointing sales growth and questions about their viability in the Internet age. For Foolish investors willing to sift through the bargain bin and determine which retailers are poised to thrive in the years ahead despite the challenges they face, the rewards stand to be great. 

Macy's, in particular, has been swept up in the downturn. This company has carved out a niche for itself as a strong, fashionable department store with increasingly strong e-commerce capabilities to match. Even though Macy's continues to generate strong profits and cash flow, as it cuts costs and outperforms its peers in terms of adapting to the 21st century, its shares have still sold off by almost 40% year to date. This is one of those rare times when an exceptional player in an industry can be had for a song. The following slideshow explains why.

 

Sean O'Reilly has no position in any stocks mentioned. The Motley Fool recommends Nordstrom. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.