Luxury Industry Will Fall Into Recession

With Macy 's Inc. (NYSE:M)

Kohl, s Corp. (NYSE:KSS), and Vitoria's Secret parent company L Brands Inc. (NYSE:LB) today released a performance update. Investors are disillusioned by the strong economic growth and low unemployment rate of the US in creating a holiday season for retailers.

Macy 's Inc., Messi, said that comparable sales grew by 0.7% in 11 and 12, an increase of far less than 3.1% in the three quarter.

The group pointed out that sales turnover in mid December directly weakened the performance of the whole holiday season.

What is more, the largest US Department store retailer will reduce its 2.3%-2.5% growth rate until November at the end of January, which has been lowered to 2% from November until the end of January. It is not as good as 2.1% of the overall forecast of EPS. The target of adjusted EPS is also revised to US $3.95-4.00, which is far less than US $4.23.

A substantial adjustment of performance expectations in a short period of time shows that the group has not yet fundamentally increased its competitiveness in order to maintain a positive momentum, and also reflects the enormous difficulties of improving physical retail in the current environment.

The chairman and chief executive, Jeff Gennette Gennette, pointed out in the press release that the holiday season was strong. Black Friday and Internet Monday were especially prominent, but it did not recover until the week of Christmas. Women's sportswear, household wear, shoes, fashion jewelry, etc.

Sales of watches and cosmetics are still below expectations.

On Thursday night of Beijing time, No Agency, a fashion industry research and consulting agency, issued a report that lowered the market luxury and high-end retail stock rating to "neutral" and below ratings.

The biggest recession in the industry has begun.

The agency quoted Messi season and Sasa International (0178.HK) holiday season as saying that the bad news of the high-end retail industry followed by a tight wind, and the bad news was much worse than expected and deteriorated more rapidly.

In the 60 years after World War II, the Western Europe, the United States, Japan and China have been unable to keep track of the luxury goods industry. The India market, which is highly regarded by the agency, is unable to undertake the enthusiasm and economic foundation of Chinese consumers for luxury goods. "Although Apple Corp, including almost every industry in the world, will increase the biggest stake in India, it will not see any improvement in the short term," Tang Xiaotang said.

According to the world clothing and shoe net, Sasa's sales figures released on Thursday night showed that the sales of group stores in Hong Kong and Macao fell 2.7% in the three quarter, far below the expected level of No Agency.

The Hongkong company blamed the decline on the macro environment and trade frictions, and the electricity supplier rule, which was introduced in the Chinese new year, was a blow to purchasing agents.

Thursday's intraday Macy 's Inc. (NYSE:M) fell to a maximum of 19.61% to 25.50 dollars, the largest decline in more than ten years, and the market value evaporated 34 billion dollars.

Kohl 's Corp. (NYSE:KSS) also narrowed sharply to 1.2% in the 11 quarter of December and a 6.9% decline in sales in the previous year, compared with a 10.49% decline in the previous year.

Victoria 's Secret Vitoria's secret sales in December fell by 6% a year, dragging L Brands Inc. overall performance can only be flat in the same period of the previous year, the group's stock price plunged 12.65%.

The dark clouds formed by the three retail giants also led to the emergence of Target Corp. (NYSE:TGT) in the holiday season due to the selling of toys, baby products and seasonal gifts. Nodes Tron and Nordstrom Inc. (NYSE:JWN), which did not disclose the data, recorded the biggest decline of 5.35% and 9.52% respectively in Taghit.

No Agency Agency reported on Thursday that the four department stores, which have reported the performance of the holiday season, said that despite the strong performance of the holiday season in the United States, high-end and high-end consumer goods represented by Messi and Kroes were at a disadvantage in the competition, while Taghit was strong. The same month sales growth accelerated in 11-12 months. It shows that as the past 1-2 quarters supporting the luxury industry in the US market, the high-end consumer sentiment is being accompanied by the slowdown of economic growth. The growth of Chinese consumers' luxury purchasing capacity will undoubtedly fall into a long recession. Therefore, it is not recommended that investors hold any luxury stocks, but believe that the mass consumption and parity fast fashion industry such as NYSE:PG, NYSE:WMT and Gap Inc. can become the market winners.

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Sanford C. Bernstein & Co. analyst Brandon Fletcher said that the 25 day price reduction after Christmas and the possible sales promotion in January caused the market to worry about the fourth quarter profit rate of the retail industry.

Jeff Gennette also mentioned that it would continue to take the necessary measures in January to ensure that the new fiscal year started with a reasonable inventory.

According to the preliminary data released by Mastercard Inc. (NYSE:MA), MasterCard at the end of December, the US recorded the strongest sales growth in the past six years in the past holiday season. Some optimistic analysts therefore believe that the retail industry will usher in the most vigorous holiday season in the past ten years.

Today's data, however, exacerbate investors' concerns about the US's continued interest rate increase and the Sino US trade war's impact on domestic consumer spending.

Since its two quarter earnings in mid August, it has hit a new high of $41.99 a year, and its Macy 's Inc. (NYSE:M) fell 24.5% after closing at $31.72 on Wednesday.

Since the start of the 2017 holiday season has been comparable sales growth for four consecutive seasons, in the 2019 fiscal year, the group will face more difficult comparative base, further weakening the growth prospects.

Neil Saunders, general manager of GlobalData Retail, a market research firm, points out: "the weak holiday season is a big question for the recovery strategy of Macy s Inc. Inc. Messi department store."

Bank of America Corp. also said in today's research report that unless the group can substantially boost sales, earnings will continue to retrogress, but the bank expects that even if management continues to invest a lot of resources in stores, it can only maintain the current sales level, because consumers are not only pferring to the electricity supplier (ShopperTrak said that the passenger volume of US retail stores decreased by 3% in the period from November 18th to December 29th), and it is increasingly inclined to patronize the Nike Inc. (NYSE:NKE) Nike group and Coach Inc. NYSE:COH (NYSE:COH) separately.

Dana Telsey, the chief executive of Telsey Advisory Group, a consultancy, pointed out that in 2018, the US retail industry was moving ahead with optimism from investors. However, the turmoil in the stock market at the end of the year made the prospect of 2019 less clear and the tariff of goods might increase. This year, the theme of the retail industry will be profit margins.

Neil Saunders believes that the polarization between winners and losers will become more and more serious.

To protect profit margins, Kohl's s Corp. Corp., which has more than 1150 department stores, today announced that it will close four loss stores and a customer service center and propose a voluntary retirement plan for long-term service employees aged 55 or above.

The opposite side of the Atlantic, Britain's retail counterparts, is also tragic.

The largest clothing retailer in the country, Marks and Spencer Group PLC (MKS.L), Marsha, today revealed that comparable sales of clothing and food products fell by 2.1% and 2.4% respectively, while the parent company of John Lewis department store, which only recorded 1% growth, warned the first time that the employee bonuses could be suspended for the first time since 1953, and three successive earnings warning Debenhams PLC (DEB.L) Spencer is urgently discussing with the creditors about capital injection.

In December, retail sales in Britain were the worst since 2008, according to a joint study by the British Retail Association and KPMG KPMG.

Macy 's Inc. (NYSE:M) fell 17.69% on Thursday, the biggest closing decline in history, and reported $26.11 a day.

Bank of America today lowered its rating from "neutral" to "running big market".

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