The Only Retail Stocks to Own During the “Apocalypse”
The Only Retail Stocks to Own During the “Apocalypse” by Justin Spittler – Casey Research
Bodies are stacking up in the retail sector.
Regular readers know what I’m talking about. As I explained yesterday, 14 retailers have already gone bankrupt this year. That’s the most retail bankrupcties ever at this time of the year.
This bankruptcy wave is showing no signs of rolling over, either.
Just before midnight on Monday, rue21, a teen apparel company, became the latest retailer to perish in what many people are calling the “retail apocolaypse.”
But let’s be clear. It certainly won’t be the last.
After all, many of America’s most iconic retailers are now fighting for their lives.
Sears, for example, plans to close at least 150 stores this year. J.C. Penney plans to close 138. Macy’s plans to close 100, or 15%, of its stores.
The industry is on pace to close more than 8,000 stores this year. That would be the most store closings in one year ever.
• We haven’t seen devastation like this since the 2008–2009 financial crisis…
But you have to understand something.
Today’s retail crisis is different. It’s not happening because the economy is in shambles. It’s happening because Americans aren’t spending money like they did in the good old days. They’re visiting malls less often and doing more shopping online.
You can see what I mean below. This chart shows how much online shopping accounts for total retail sales:
You can see that online shopping activity has increased nearly tenfold since 2000. And Amazon, the world’s largest retailer, is a big reason why.
Just look at the chart below. It compares the market values of seven traditional retailers with Amazon’s. Notice anything?
All of the traditional retailers are smaller than they were a decade ago. Amazon’s market value, on the other hand, is 27 times what it was a decade ago.