U.S. Department Stores have experienced a rapid and steep decline in both overall sales and sales as a % of overall retail spend in recent years. As consumer tastes continue to shift, the burden for Department Store leadership teams becomes how to develop and execute a strategic shift in this rapidly changing environment, and how to do so before there is no value left in these one-time dominant retail players.

1. 1
Abraxas Group
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U.S. Department
Stores inTurmoil
February 2017
Macy’s New York City, 1984
Source: Wikimedia

2. “There is only one boss. The customer. And he can fire
everybody in the company from the chairman on down,
simply by spending his money somewhere else.”
‒ James Cash Penney
Abraxas Group
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3. U.S. Department Stores were a
dominant feature of the U.S.
Retail landscape through the end
of the 20th century.
Although they did experience a
decline as a relative share of
Total Retail Sales from 1992 –
2000, the group saw revenue
increase by $55 billion for the
period.
Closing Out the 20th Century
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0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
100
125
150
175
200
225
250
%ofTotalRetailSales
Revenue($billions)
U.S. Department Store Sales
U.S. Department Store Sales % of Total Retail Sales
Source: U.S. Census Bureau

4. From 2001 – 2016, Department
Store sales have declined by
approximately $73 billion.
Over that span of time
department store sales as a
share of total retail sales have
declined by more than half,
falling to 3.2% in 2016, from
7.5% in 2001.
Sliding to Irrelevance in the 21st Century
Abraxas Group
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4
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
100
125
150
175
200
225
250
%ofTotalRetailSales
Revenue($billions)
U.S. Department Store Sales
U.S. Department Store Sales % of Total Retail Sales
Source: U.S. Census Bureau

5. The Only Solution is Change
• Department Store leadership must embrace the reality that they are
seeking to execute an outdated strategy is failing to deliver value to
customers.
• Despite hundreds of store closures in recent years, more are needed to
right-size the U.S. Department Store retail footprint.
• An over-reliance on discounting has led to a vicious cycle in which
department stores are losing the support of key retail partners while
simultaneously training their customers to expect consistent, heavy
discounting.
Abraxas Group
www.abraxasgp.com
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6. • David Johnson is a career change agent who has served
as interim manager or financial advisor to dozens of
middle market companies.
• In his nearly 20 years as a change agent, David has served
as an advisor, board member, interim manager, investor
and operator at organizations ranging in size from pre-
revenue startups to Fortune 500 organizations.
David Johnson
Abraxas Group
www.abraxasgp.com
6
Email: david@abraxasgp.com
Ph: 312-505-7238
Twitter: @TurnaroundDavid