Friday, April 12, 2013

5 Big Retailers That’ll Be Gone in 5 Years

We've lost Lechmere, Ames, Caldors  Bradlees, Circuit city and for what? an all powerful Walmart? if this keeps up all of my childhood stores will be gone.

 1. JC Penney
It's become fashionable to pick on Penney's lately. (In fact, this may be the first time the word "Penney's" and "fashionable" have been used in the same sentence since the late 1970s.) Sozzi says JCP's decision to fire ex-Apple retail head Ron Johnson and bring back former CEO Myron Ullman will only speed up their inevitable demise.
As fast as Johnson was running through JCP's cash with his ambitious remodel plan, it's going to be almost as expensive to undo it. Half of Penney's stores are in the various stages of being gutted and about 500 stores haven't seen a paint brush in years. To bring the two versions of JCP together is going to cost a fortune and confuse customers even more.
"It's going to get worse," says Sozzi, adding that the stock will ultimately move "in one direction — down."
2. Staples (SPLS)
Sozzi thinks Staples is a victim not so much of ineptitude but changing times. Tablets, emails and texts have finally reached the long awaited point at which they've obviated the need for an office supply store down the street.
The products people need to help them work at home (printer paper, ball point pens, etc.) are available at every merchant in town, and more exotic products can be ordered online and delivered in record time. Staples has a robust online presence, but nothing so great that a company like Amazon (AMZN) could not destroy it on a whim.
Staples' most obvious way to escape its death spiral would be expanding internationally. Unfortunately history hasn't been kind to even the best retailers trying to tap foreign markets. As dim as Staples' prospects are domestically staying home gives the company a better shot at survival than a cash-draining attempt to go global.
3. Sears (SHLD)
It may be impossible for most to remember, but Sears was once the "go to" merchant for almost anything. The Amazon of its time, Sears was the first retailer to make it easy for customers to shop from home via its once iconic catalog.
That was a long time ago. Sears has been on a steep slide for ages, held together by little more than the will and imagination of billionaire investor Eddie Lampert. As a merchant, Lampert makes an amazing hedge fund manager.
"Here's a fast fact," offers Sozzi, "the domestic same-store sales have been down for seven straight years." The slide is inexorable. Sears stores will disappear, and the company will be chopped into pieces.
4. Radio Shack (RSH)
Despite still having thousands of stores, RadioShack embodies an idea that is behind the times. They've tried almost everything to maintain a place in America's shopping habits, but there just isn't that much need for speaker wire, knock-off remote controlled toys or another cell phone seller.
RadioShack is "a little, small store of product deflation," Sozzi notes. Everything in the stores, except perhaps the batteries, once cost more than it does today. It's somehow encouraging that a handheld robot with almost no functionality can be had for less than it cost 20 years ago, but there's no margin in such toys and gadgets.
5. Barnes & Noble (BKS)
Say it isn't so! The last of the major physical book retailers had one shot at relevance, Sozzi says. That was in the form of the Nook, a would-be competitor to the iPad and Amazon's Kindle.
Barnes & Noble's "big idea" was that people who had a Nook could be driven into stores, where customers would congregate to enjoy each others' company and perhaps buy a cup of high-margin coffee and a few magazines.
Instead, Nook sales have dwindled to the point that the company can no longer afford to pursue what little opportunity there may be for a third-place offering in the tablet arena. Sozzi says Barnes & Noble giving up on the Nook eliminates its long-term chance of survival.
If any of these stores are still here in five years, they'll either be a museum or a privately-held vanity property for founder Leonard Riggio.
Which stores do you think will go bust? Let us know your thoughts in the comment section below or visit us on Facebook!