In a year that saw many department stores struggle to set themselves apart and keep up with online competition, Macy’s stock took a serious hit. Shares of the New York-based retailer lost 46% of their value, making it the year’s worst-performing retail stock in the S&P 500, according to Forbes. The company is now worth just $5 billion, a staggering decline from the $24 billion it was worth at its 2015 peak.
Last month, Macy’s reported its first comp sales slump in nearly two years and slashed its full-year outlook. “While we anticipated a negative comp as we were lapping a very strong third quarter last year, the sales deceleration was steeper than we expected,” CEO Jeff Gennette said in November.
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Macy’s cited the “late arrival of cold weather, continued soft international tourism and weaker than anticipated performance in lower-tier malls” as reasons for declining sales.
Gap Inc. also had a tough 2019, with its stock ending the year with a 31% decline, making it the second-worst performing retail stock in the S&P 500. Top among the many developments making investors jumpy, Art Peck, the company’s CEO, stepped down abruptly last month, forcing one of the founders’ sons, Robert J. Fisher, to step into his role until a successor is named.
While Old Navy has been a bright spot for the ailing fashion firm, the brand’s sales have stumbled in recent quarters, just as Gap has begun the process of splitting itself into two publicly traded companies in 2020. Plans call for one company to house the faster-growing Old Navy banner, while the second would encompass Gap, Banana Republic and other brands including Athleta.
At L Brands, even Victoria’s Secret’s angels couldn’t work a miracle for the struggling firm. Shares plunged 28% in 2019. The company’s flagship lingerie brand lost considerable market share amid growing competition from direct-to-consumer startups such as Adore Me, Lively and Third Love. In an effort to revamp its much-criticized image, Victoria’s Secret also discontinued its long-running annual fashion show.
What’s more, a shadow remains over the company due to founder Leslie Wexner’s close ties to Jeffrey Epstein. Questions surrounding Wexner’s connection to the late financier and sex offender have added pressure during a year when his leadership has already been under heavy scrutiny due to falling sales at Victoria’s Secret.
Gap Downgraded by S&P as Investors Sound Caution on Old Navy Separation
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