By contrast, conversions from for-profit ownership occur quickly following declines in margins.
At Macy's, a decline in margin was not because of lower prices throughout the store, but because of a free-shipping promotion and markdowns on cold-weather gear, said Mr. Lundgren in an interview.
The net result was an increase in inventory and a decline in margin with a negligible impact on growth.
"The decline in margin was a result of lower gross margins in its BioDiscovery division, which experienced unfavorable revenue mix and manufacturing variances".
Its customer mix saw an increase in the number of larger but low margin business, while it saw declines in higher margin business.
"We are not pleased with the considerable decline in margins in this group," Novakovic said.
"It's a staggering sequential decline in margins," said A. M. Sacconaghi, an analyst with Sanford C. Bernstein & Company.
The strategy helped Saks avoid being burdened with excess stock in January, but rival shops were made to look very expensive and felt they had to follow suit.Nordstrom, a department-store group, reported a 68% fall in fourth-quarter net profit, thanks to a decline in margins prompted by price cuts.
Despite the slight decline in margins in 2017, LEG still maintains a margin advantage over peers.
