Some of the nation’s largest retailers have been battered for years by the rise of e-commerce. Several companies, like Sears, have gone bankrupt. Others, like J.C. Penney, are nowhere near the size they were a decade ago. Several of the healthiest brands based on revenue and strong balance sheets seemed likely to make the transition to the online world.

Macy’s Inc. (NYSE: M), 161 years old, appeared to have implemented merchandising and management moves to put it on the right path toward being a successful survivor. Wall Street has changed its opinion of the retailer, pushing its shares down 50% so far this year.

The drop makes Macy’s the worst-performing member of the S&P 500 so far in 2019. To make matters worse for shareholders, the stock is down 61% from its 52-week high.

Until earlier this year, Macy’s had been on a path to renewed growth. Jeff Gennette, chief executive officer since March 2017 and board chair since February 2018, began to close stores and change the focus of what the surviving stores did. The industry thought well enough of Gennette to make him chair of the NRF Foundation, an industry honor. At the end of last year, the press began to seek out Gennette to talk about his formula. In fact, he told Women’s Wear Daily last November that he had a “recipe for success.” That didn’t last long.

Gennette’s formula was a series of programs that, in sum, were focused on an improved balance sheet, a more powerful online presence and much higher sales per square foot in its stores. Some of its lower-performing stores would need to be closed in the name of cost-efficiency. Stores were remodeled, some real estate sold and Macy’s e-commerce lines were broadened and more aggressively promoted. David Swartz of Morningstar describes what went wrong as he examined Macy’s plans, “While the initiatives may be sound, we don’t expect them to bring in vast numbers of new shoppers. We note that Macy’s same-store sales have been weak even as e-commerce has grown. We think Macy’s has been slow to respond to competitive threats.” Swartz believes Macy’s did not close enough stores.

Macy’s also made the kind of mistake that Wall Street punishes most brutally. It lowered its earnings guidance the last time it reported numbers. Investors rely on company guidance to make investment decisions. For the second quarter of this year, revenue was flat at $5.55 billion. However, net income dropped from $166 million to $86 million. The mediocre results were not enough to stand up under the pessimism about the future. Shares plunged and have not recovered.

For those who keep track of store closings by retailer, 24/7 Wall St. follows store count by company and updates the list regularly.

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