The department store in America is an iconic institution. In a way, it’s a temple to consumerism, but it seems that these days we’re worshipping there less and less.

Over the years niche, retail has decimated the department group. What had been a thriving industry with dozens of players has now been reduced to a handful competing for an ever shrinking piece of the pie.

Adding insult to injury, the recent recession poured salt on the wound. Now, with the consumer retrenching in a big way the very survival of the department store is in question.

In looking at the stock prices for the publicly traded department store, one will find investors not very interested in the long-term prospects of the group.

Shares of Macy’s (M), Nordstrom (JWN), Saks (SKS) and Dillard’s (DDS) have lost more than 70% of market value during the current downturn. It is absolutely bloody in the sector.

In late November, I suggested that it may be time to start nibbling on shares. Though there may be more downside to the stock, much of the bad news was already priced into shares.

Ultimately the case for investment is a question of survival. If Macy’s survives the morass, investors may be poised for big gains.

Shares of Macy’s traded for around $6 per share at the time. In the two plus months since that article, shares moved to close to $12 a share. That’s about a double if you bought in late November.

Obviously there was more than enough justification to nibble, but the euphoria for the stock may have been a bit premature.

On Monday, the company announced that it was taking immediate steps to preserve cash during the current crisis. The company slashed its dividend to $0.05 per share from $0.1325 and announced 7,000 job cuts.

Shares of M fell by more than $1 in the immediate aftermath of the news. M had drifted to the $9 level for much of January, and this news pushed shares below $8 per share. Though they recovered some at the end of the day, M closed just above $8.50.

As I said in November, much of the bad news is already priced into M. There simply is not much downside to owning shares in the $6 range. At $8.50, there may be short-term losses as traders test previous lows.

In the long run, I stand by my comments made in November. It might be a good time to nibble on these depressed shares.

This article was written by Jamie Dlugosch, contributor to InvestorPlace.com. For more actionable insight like this, go to: www.InvestorPlace.com.