Goldman Sachs began covering Macy's with a sell rating on Monday, saying the retailer's core business will continue to falter while turnaround plans deter more people from walking into its stores.

Shares of Macy's slipped 0.4 percent in trading, closing at $36.39 per share.

Goldman analysts said a decline in the retailer's foot traffic at its core department stores will outweigh any benefits coming from its strategic initiatives, such as a push to add off-price options within existing Macy's stores.

This "shop-in-shop concept is an interesting initiative" to attempt to reverse the declining foot traffic, Goldman said, but the firm views the move "as insufficient to offset challenges in the core business" — instead expecting it to actually further depress foot traffic while adding incrementally to "payroll and other costs."

Macy's is also the most exposed retailer to declining mall traffic, according to Goldman.

"As store closures and bankruptcies continue among key mall retailers, we expect further deterioration in the mall ecosystem," Goldman said.

Macy's has the "most store overlap with closing Sears stores," Goldman said, citing its analysis of the chain's geographic footprint, with a "material overlap with the struggling JCPenney chain."

Goldman has a $33 per share price target on Macy's, which is 10 percent below its price of $36.55 as of Friday's close.