Patience should reward these retailers’ investors

Article Excerpt

Traditional department stores face strong competition in two areas. The popularity of online shopping continues to hurt customer traffic, while cost-conscious shoppers prefer discount chains. In response, Macy’s and Nordstrom are aggressively cutting costs and selling some of their sizable real estate holdings. These moves should lead you to higher returns, although you’ll need to be patient: their shares will likely remain down until their strategy begins to pay off. MACY’S INC., $16, remains a hold. The retailer (New York symbol M, Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 308.9 million; Market cap: $4.9 billion; Price-to-sales ratio: 0.2; Dividend yield: 9.4%; TSINetwork Rating: Average; www.macysinc.com) operates 680 Macy’s and Bloomingdale’s department stores. It also has over 190 speciality outlets in addition to selling goods online. Macy’s continues to close unprofitable stores. That now includes plans to shutter its landmark store in downtown Seattle in 2020. Investors should expect that to spur the company’s profitability. It is also adjusting its supply chains and marketing programs. Macy’s…