Analyst Concerned About Future of Department Stores

Aug 06, 2002

Salomon Smith Barney analyst Deborah Weinswig is taking a cautious approach to department store stocks as mass merchants and discounters continue to grab greater share of the retail market.

Weinswig’s firm began its coverage of the Federated and May Department Store chains with a neutral rating.

In her evaluation of Federated, Weinswig writes that the retailer has a “strong cash flow and compelling valuation but she remains cautious until sales trends improve.”

On May Department Stores, the Salomon analyst is encouraged by the chain’s decision to showcase new brands as well as make physical changes to improve the in-store shopping experience.

Moderator’s Comment: What do you think is the future
of department stores?

Discounters and specialty outlets will continue to grab
share of U.S. retail sales until department stores find a way to reinvent themselves.
Of course, failing that, the future of department stores is… Well, there
is no future or at least a very limited one anyway. [George
Anderson – Moderator

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