America’s department stores are under fire ahead of the holidays

The holidays are right around the corner, in addition to also some of retail’s biggest names are being called out by Wall Street.

Macy’s in addition to also J.C. Penney were both downgraded by Citi Research on Monday, to sell through neutral ratings.

Citi analyst Paul Lejuez can be calling for “another promotional holiday season” ahead for an already challenged department store industry. Too many deals in addition to also discounts throughout the November in addition to also December months could eat into company profits if retailers aren’t able to rack up dollars elsewhere.

Macy’s shares were falling more than 5 percent by Monday afternoon on the news, while Penney’s shares were trading 10 percent lower. Retail rivals Sears, Kohl’s, Nordstrom in addition to also Dillard’s were also each dipping lower, dragging the S&P 500 Retail ETF (XRT) down with them.

“In an environment where consumers are increasingly turning to Ecom, in addition to also where department stores are selling ‘various other people’s stuff’ of which can often be bought elsewhere, we believe the company needs to have far fewer locations,” Lejuez wrote in a note to clients about Penney’s.

Penney’s has already announced 140 store closures in 2017, hoping to improve liquidity, nevertheless some analysts are saying of which won’t be enough.

“from the current retail environment, we believe department stores are structurally disadvantaged to win,” Lejuez said. “Risks continue to mount.”

Just last week, Penney’s shares tumbled more than 20 percent when the company trimmed back its 2017 profit in addition to also comparable sales forecasts, blaming heavy discounting — particularly on women’s apparel — ahead of the holidays.

“While we acknowledge the positive work JCP can be doing to become less apparel reliant (with initiatives like the expansion of home, appliances, beauty, in addition to also salon) the sector faces intense secular headwinds as mall traffic wanes in addition to also the shift to e-comm should also continue to weigh on profitability,” Jefferies analyst Randal Konik said about the announcement.

The disappointing full-year outlook through one department store chain didn’t bode well for the rest of the industry, either.

Evercore ISI analyst Omar Saad called Friday’s news a “negative” for J.C. Penney’s peers, in addition to also he’s also concerned of which a warmer winter across the U.S. could spell doom for department store’s coat sales.

Meantime, America’s department stores are trying to lure shoppers in This kind of holiday season. Each company features a strategy of its own.

Kohl’s, for example, has inked a deal with e-commerce giant Amazon to both sell some of Amazon’s tech products in addition to also accept Amazon returns in a handful of Kohl’s stores.

Sears, in a nostalgic move, can be bringing back its iconic holiday catalogs.

Nordstrom, which has fared better on the stock market than all of its peers excepts for Kohl’s This kind of year, can be betting bigger on its off-cost Rack division in addition to also testing a smaller store format without inventory.

“They’re in trouble,” Vicki Howard, author of “through Main Street to Mall: The Rise in addition to also Fall of the American Department Store,” said in an interview about U.S. department store chains. “Their demographic can be aging … they haven’t made themselves relevant to younger markets.”

“I’m not saying retail can be dying,” Howard added. “I think of which’s definitely changing.”

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