What's going on?

American Department store chain Nordstrom reported weak sales in the very important holiday-quarter and lowered its guidance for 2016 � the stock sold off more than 6%.

What does this mean?

The company�s profit was down about 30% versus a year earlier and inventory went up (which suggests that it�s carrying unsold stock). Its problems are familiar: whether it�s because of warm weather, competition from Amazon and other online retailers or just weak demand, department stores are struggling to sell as much clothing and accessories as they used to. Some argue it�s a generational thing: millennials are more likely to buy a new phone than new clothes. Whatever the reason, traditional, high-end department stores are struggling.

Why should I care?

Bigger picture: Shoppers have moved to discount stores like T.J.Maxx. If you go to buy clothing, you�re more likely than ever to do it at a discounter – a sort of no-frills store where the running costs are kept as low as possible and the savings are passed onto the customer. Nordstrom has its own discounter (called Rack), which actually already has more stores than Nordstrom itself � and current plans are for 300 new Rack stores to be opened by 2020. The bad news for Nordstrom is that sales at Rack stores (that have been open for at least a year) are actually declining.

For you personally: Get ready for even more discounts at department stores. If you do have your eye on a swanky new jacket or suit, you might find it for a relatively cheap price at a department store sometime soon. Inventories remain high for virtually all department stores and the biggest way to shift inventory is to cut prices. Of course, that doesn�t bode well for the industry�s profits.