The S&P 500 is up 27% this year.

Macy’s CEO Tony Spring is trying to turn the company around with a plan unveiled in February called “Bold New Chapter.” The playbook includes investments in online and the company’s top-performing stores. It also implies the closure of 150 underperforming stores by 2026 and more layoffs.

“If I told everyone that I had a business, that we could be in the cosmetics business, that we could be in the women’s clothing business, that we could be in the men’s business, that we could be in the home business, that we could be in the home sector. electronics company, you could say that a marketplace and a marketplace are very attractive to people,” Spring explained at Yahoo Finance’s Invest conference earlier this month.

The results were mixed at best.

Across 50 stores where Macy’s has invested in better staffing, product selection and visual displays, the company said in its preliminary earnings release this week that same-store sales grew for the third quarter in a row, up 1.9% on an annual basis.

The company did not disclose online sales in the third quarter.

Online sales in the second quarter fell 7% from the previous year to $1.43 billion.

As for Kohl’s, its shares are down 46% this year.

A decline in foot traffic, a drop in investment in private clothing brands and the removal of fine jewelry to make room for Sephora cosmetics stores in stores have hurt sales growth, Dana Telsey of Telsey Advisory Group wrote in a letter to clients .

It plans to reintroduce fine jewelry in 200 stores this holiday season.

Kohl’s also needs a more structured online business that was once “way too promotional,” says Morningstar’s Swartz.

The retailer said this month that Ashley Buchanan will be its next CEO, the third since 2018. He will take over in January.

Nordstrom is outperforming its department store peers because it focuses on e-commerce.

Jefferies analyst Ashley Helgans says Nordstrom has benefited from “leadership with brands first and price second.” The company has also focused on “enhancing the selection and depth of customers’ favorite brands” of Decker’s Outdoor (DECK) running sneaker Hoka and performance shoes from On Holding (ONON), as well as smart and contemporary menswear.

But it still remains cautious this holiday season.

The company noted an “uncertain” external environment when it reported earnings earlier this month, opting to only reaffirm its full-year earnings guidance.

“Across all of our businesses, we saw a slowdown in trends” starting in the last week of October, CEO Erik Nordstrom said during the earnings call.

Shares of Nordstrom rose 22% to $22.62 following a buyout proposal.

According to Swartz, all three companies will eventually go public to avoid the punitive gaze of Wall Street.

In September, Nordstrom’s founding family teamed up with retail investor El Puerto de Liverpool to take the company private. The two parties own 33% and 10% of the company respectively and are offering $23 per share or $3.8 billion for the remainder. Nordstrom’s board has acknowledged the offer, but has not yet announced a decision.

“Given the way the deal is structured… there is a very good chance it will be completed,” Swartz said.

Both Macy’s and Kohl’s have rejected buyout offers in the past two years, reasoning that more value could be captured by executing turnarounds.

But time is ticking and the dynamics in the sector are only increasing. It is likely that Macy’s and Kohl’s will make offers in the future to gain certainty for shareholders.

“Some other hedge fund or private equity… is going to say… ‘Wow, this is dirt cheap.’ I can buy this company and get all kinds of value out of it,” Swartz said of the others.

“That’s still the case for both Kohl’s and Macy’s. They still have real estate. They’re still generating cash flow, their valuations are still extremely low, so they’re still attractive,” he said.

How the holidays go can force their hands.

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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at [email protected].

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