JUST IN: Two Retail Giants Announce Store Closures? Will Stock Prices Be Affected?

 

On January 9, it was reported that Zara would close four stores in China in the next 10 days.

 

This news is likely to cause short-term anxiety in the fast-fashion retail sector of the stock market because the market is concerned that Zara  decline its market expansion in China. To ease the panic selling, Zara's parent company, Inditex Group, responded that Zara has been adjusting store quantities to make strategic adjustments.

 

Coincidentally, Macy's announced that it would shut down 66 stores in the US for cost controls. The decision is the latest development in the company's plan to close 150 inefficient stores over three years and its latest move to deal with its financial difficulty.

 

Simultaneously, the company has tried to improve its finances by opening small stores in suburban shopping malls and expanding its better-performing Bloomingdales and Bluemercury brands. Because of its financial woes, Macy's has received several acquisition offers. Nevertheless, Macy's has declined all of them.

 

In 2024, Macy's stock $M has a cumulative decline of 12%. Its stock received an average rating of Hold from 11 Wall Street analysts. Specifically, Macy's gained two buy ratings, eight hold ratings, and one sell rating. The average price target for the stock is $16.11 per share.

 

However, the analysis pointed out that in the long run, the retail industry is accelerating consolidation. High-quality brands still have growing potential.