Dive Brief:

• Citi analyst Paul Lejuez downgraded Nordstrom Tuesday, saying that even though it’s made many of the right moves, it won’t be able to overcome the pressures in the wider department store space, and that even its off-price Rack stores aren’t well positioned because of their focus on apparel.

• Citi was kinder to J.C. Penney, which is still making turnaround efforts but is facing skepticism from many quarters. "We believe [the] market appreciates the challenges J.C. Penney faces in its turnaround," Lejuez said. That retailer earlier this week also enjoyed a positive note from Buckingham Group, which said the retailer will likely hit its marks on the low end and hold its EBITDA guidance. 

• Cowen & Co. also took a dim view of department stores Tuesday, although it’s more sanguine than Citi about Nordstrom in particular, with Oliver Chen saying that Nordstrom will perform well in the longer term.

Dive Insight:

The new year is not seeing much of a page turn for department stores, after a fairly slack holiday season and continued problems in apparel sales in particular.

Aside from Citi's note Tuesday, Nordstrom has widely been seen as doing better than its peers, with a reputation for stellar customer service and tech investments. Retail futurist Doug Stephens late last year singled out the Seattle-based retailer as having the fundamentals that others in the space mostly lack.

“You wonder if any department store can afford to be a department store any more unless they’re high end,” Stephens  told Retail Dive. “Look at J.C. Penney, still dying a slow death. And Macy’s for all their bravado about omnichannel, still their sales are underwhelming.”

“Nordstrom’s service proposition is still excellent,” he continued. “The service is tremendous, the assortment is really good, they have good buying principals, and, at the same time, they’re technology savvy.”