The holiday season was a brutal one for U.S. retailers, especially department stores and companies that sell luxury products, and companies and investors alike didn’t see it coming.
The U.S. economy has been growing at a steady pace, and unemployment is low and consumer confidence is high. That seemed to set the stage for strong sales over the holidays, but companies including Macy’s, Nordstrom and Signet all said they struggled badly over the critical December shopping period.
The stock market itself may have been part of the problem: extreme volatility in December may have shaken up wealthy shoppers more than it hurt average consumers.
Earlier this month, Macy’s suffered the biggest one-day stock drop in its history as a public company. The retailer said sales fell off after Black Friday and Cyber Monday until the week of Christmas, and it cut its sales forecast. The surprise report rattled companies throughout the industry.
The next week, Nordstrom helped confirm the trend when it said sales of full-priced clothes slowed in November and December and that the company offered more discounts.