Are retailers going the way of the airlines?
We may have to declare this group uninvestable, as it's just too hard to figure out who's going to hit and who's going to miss.
Remember the late and unlamented Hit Or Miss chain of women's apparel stores?
These days I think that namesake business represents the industry itself, where retailers seem to fall by the wayside only to be resurrected and then get crushed again.
It wasn't that long ago when Gap (GPS) was heralded as one of the great turnaround stories in retail history. But now all of that's being called into question as its comparable-store sales for both Banana Republic and the flagship Gap that we got last night are simply baffling. What gives? I wonder if they know or are just another victim of the retail funk that The Container Store (TCS) used to explain its anemic sales.
Or how about last night's disappointing Rent-A-Center (RCII) numbers? They took my breath away, especially when they cited "macroeconomic weakness." I used to buy this stock on macro weakness, as people would rather rent than buy in tough times. Another unfathomable reason to go with an unfathomable report.
These all come on top of that shockingly disheartening set of comp numbers and gross margins out of Lumber Liquidators (LL), numbers that called the whole concept into question.
I think we are coming to a moment when we may have to declare this group uninvestable, not unlike the airlines of yore. It's just too hard to figure out who is going to hit and who is going to miss. Of course, a premium should be accorded the winners, like Costco (COST), but that's not happening either -- at least for the moment.
I think you cut exposure both ways. You aren't getting paid to take the risk.
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is having to listen to this guy's purported 'advice'.
Sure, it would be a step in the right direction if we could indeed
omit the middlemen. Unfortunately our buyers / sellers market is
so large, it is no longer feasible to trade with our neighbors as
was done in Ye Olde Village days.
We may be able to dismiss the traditional 'hard copy' storefronts,
but E-bay and others will surely supplant those venues. Thus, there
will always be some sort of retailers. Its not realistic to just 'avoid them'.
Then again, when did Cramer ever make sense?
Yeah, it's really bad when my local beer distributor is having 50% off Sam Adams.
Wanna judge the strength of the economy???
Look at sales of men's underwear.
That's right, men's underwear. Last I knew Hanes had blowout numbers. So get out of retail???
ABSOLUTELY!!! The bad ones I mean. The good ones will go gangbusters. Fickle, fickle.
i'll likely die with this idea, but retailers don't have a "product". they are another service house or distributor OF products that someone else makes. any cash or profit they have comes from charging more than enough to cover basic expenses.
unlike airlines that ARE a product of sorts even though they provide a "service". airline manufacturers would not exist if airline companies didn't offer flight as a service (or product you buy and consume).
airlines have a hard time "making profit" because they likely strive to reach that line of not too much, not too little cash at the end of any tax year. and as long as they can run on some credit line, they are fine. when they go belly up, no one goes to jail. just like the bankers or people who run the government.
Guess I've heard that about Men's underwear...Doesn't make a lot of sense..??
Same thing about Women's hemlines.... The Better the Economy, the shorter the skirt.
I think that applies to short-shorts and bikinis also..?
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