Press Release

Highly Concentrated Department Store Market Dominated by Sears Holdings, Macys and TJX


March 9th, 2012

Global Information Inc. would like to present a new market research report, "Leading Global Department Stores - Company Benchmarking Analysis Report" by Canadean.

The global department stores market is highly concentrated. Large US store chains, including Sears Holdings, Macys and TJX, dominate the global market. The global department stores market has been contracting in recent years as it is faced with increased competition from hypermarkets, discounters and online retailers. Market values of department stores are expected to continue declining in the next decade as an increasing number of consumers choose other retail channels as they seek better value for their money.

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TJX performed the best on an overall basis among the leading global department stores. Its strong performance was demonstrated by the high scores it received for the scale and growth, operational efficiency and financial performance pillars. The next best overall performing department stores in the peer group were Marks and Spencer and Kohls. While Marks and Spencers performance was strong in scale and growth and operational efficiency pillars, Kohls had a strong performance in scale and growth and financial performance pillars. Isetan Mitsukoshi recorded the least impressive overall performance, which was very poor compared with the department stores channel as well. Its poor performance was primarily driven by the low scores it received across all the three pillars: scale and growth, operational efficiency and financial performance. On an overall basis, only three out of 10 companies in the peer group performed better than the channel average.

Both TJX and Kohls were the best performers under scale and growth pillar in the peer group. TJXs strong performance can be attributed to the high scores it received in the scale metrics: revenue, retail floor space, store count and employee count. Kohls strong performance was due to the high scores it received in the revenue, retail floor space, store count and employee count metrics. Based on the scores received by the peer group companies, it can be inferred that these companies performed better than the department stores channel on the revenue, retail floor space, store count, and employee count metrics. However, their performance was weaker than, or comparable to, the channel average in growth metrics and market capitalization. Of the 10 peer group companies, six performed better than the channel average under this pillar.

Marks and Spencer performed the best under the operational efficiency pillar in the peer group. The companys strong performance can be attributed to the high scores it received in the EBITDA margin and in area productivity metrics, which was due to the companys increased focus on operational efficiency and improved logistic management. However, the companys performance was the least impressive in sales per employee and fixed asset turnover. In general, the peer group companies performed better than the department store channel average on the sales per square meter and sales per employee metrics. However, the peer group performance was weaker than the channel average on EBITDA margin, net profit margin, inventory turnover and fixed asset turnover under the operational efficiency pillar.


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