Shares of Macy's (M) are sliding after Citi analyst Paul Lejuez downgraded the stock to Neutral as he lacks confidence in a business turnaround following a "weak" fourth quarter and "tough start" in the first quarter. Meanwhile, the struggling department store chain announced yesterday that Jeff Gennette has effectively succeeded Terry Lundgren as the company CEO.

MOVING TO THE SIDELINES: In a research note this morning, Citi's Lejuez downgraded Macy's to Neutral from Buy, saying that even though the company may be doing the right thing by closing stores, it is hard to have any confidence in a business turnaround following a "weak" fourth quarter and seemingly "tough start" in the first quarter. Macy's inability to post better quarterly results against "very easy comparisons" highlights the structural issues facing department stores, the analyst contended, adding that he does not see these issues abating anytime soon. Additionally, Lejuez told investors that based on some of its recent real estate transactions and significant store closings throughout the industry, he is less comfortable that real estate can provide the same level of downside protection that he once believed, especially with deteriorating fundamentals. The analyst also lowered his price target on the shares to $30 from $39.

NEW CEO: Last night, Macy's announced the the previously announced CEO transition was completed, with President Jeff Gennette assuming the CEO role and Terry Lundgren continuing as executive vice chairman of the company. "Jeff has a proven track record as a successful retail operator, seasoned merchant and business leader and has contributed significantly to the company's long history of success," said Lundgren. In an interview with The Wall Street Journal ahead of his official start as the new CEO of Macy's, Gennette laid out his plans for a turnaround of the retailer in the current difficult environment, stating that he is "trying to create the best of both worlds with an off-price/full-price environment" by making room for higher-priced, trendier clothing while also adding more options for bargain shoppers that have turned to T.J. Maxx (TJX) and other discounters. Gennette, who seeks to shift the focus away from promotions and toward branding Macy's as a place to shop for fashion and special events, said the department-store model is far from dead, but conceded his company's sales are too concentrated among a small group of core shoppers, the publication said.

PRICE ACTION: In morning trading, shares of Macy have dropped about 0.6% to $28.10.