Expert: Macy's An Amazing Brand, But Only Solution Is To Close Stores

Macy's, Inc (NYSE: M) shares are rebounding this week, but according to Kristin Bentz, investors shouldn't be fooled: Macy's is in deep trouble.

Bentz loves CEO Terry Lundgren, but admitted there are certain things that even he can't fix.

"They're trying to do everything. They acquired a cosmetics company...which I thought was strange," the retail expert told PreMarket Prep. "They went into off-price. They brought in Sunglass Hut. They're trying to do everything to fix it, and now they're closing stores, which is what they should have done a long time ago."

Failing Digi-Col Initiative

Bentz talked about what she called the "Digi-col" initiative, the combination of owning the digital and local spaces. Despite Macy's having one of the largest websites in the world, it's having a hard time marrying the two.

"I'd be really cautious here. I think that there's much more room for weakness," she said.

Related Link: The Year Of The Department Store Overhaul

The only solution is to close stores: "I think they need to close a gazillion stores. It's sad because they're such an amazing brand. They're doing all the right things and it's still not working."

Kohl's Should Go Private

Kohl's Corporation (NYSE: KSS) shares were trading higher this week on news of the company potentially going private, but some are concerned with what this says about retail industry.

Bentz thinks it would be a good move for what she called the former gold standard of the retail industry.  

"I actually like it for Kohl's... Even though Kohl's was best-in-class, they're struggling. I think going private would be a great solution for them."

Bentz said Kohl's has been an example of how the retail industry giants have failed to understand how the consumer wants to spend money, singling out its new same-day delivery policy that doesn't necessarily work for their product lines.

Bentz pointed to experiential luxury brands as the companies that could be the next big draw for the consumer retail sector. Travel companies, such as Airbnb and Uber, and service companies, such as DryBar, could be positioned to grow in the coming years.

Catch the rest of Kristin's interview below. Listen to today's PreMarket Prep in it's entirety here, and join us every morning from 8-9:30 a.m. ET for live trading ideas and analysis here.