Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

The Death Spiral

The Retail Apocalypse Gets Worse

Retail Apocalypse skeptics are not reading or watching the news or studying earnings reports. Both news and earnings reports show the Retail Apocalypse is getting worse.

The latest evidence for the Retail Apocalypse includes:


Sears Holdings plans to lay off hundreds of employees; and close 96 stores, Business Insider reports.

For instance, Sears’ owner Transform Holdco will lay off up to 300 people at corporate offices in Chicagoland and San Francisco. This is the second set of layoffs at Sears this fall. Sears laid off 250 people at its corporate headquarters in Illinois in September.

There will only be 182 Sears and Kmart stores left in the US after the latest round of Sears closings, Business Insider estimates. Sears plans to close 45 Kmarts and 51 Sears locations beginning by February 2020.

Those closings are besides the 122 stores Sears plans to close by January 2020, Business Insider reports. Therefore, I calculate Sears plans to close 218 stores during the 2019 holiday season.

When Sears merged with Kmart in 2005; just 14 years ago, the combined company operated 3,500 stores. Hence, one of America’s largest retailers has shut down over the course of a year. In addition, Sears collapse will create mass unemployment. Yet nobody in the media seems to notice. 

Notably, Sears is pulling out of entire regions. For instance, all the Kmart stores in Ohio will close, Ideastream notes. Meanwhile, the last Sears store in Western New York State is closing, The Buffalo News laments.

I predict Sears’ collapse will become a political issue. Already, presidential candidates like Andrew Yang (D-New York), President Donald J. Trump (R-New York and U.S. Senator Liz Warren (D-Massachusetts) are attracting votes by bashing Amazon (NASDAQ: AMZN).

Yang and Trump regularly mention Amazon; which they blame for killing jobs, in campaign appearances. Plus, Yang’s TV ads feature news footage of robots working at Amazon fulfillment centers.

Macy’s (NYSE: M)

Shares of Macy’s Inc. (NYSE: M) were trading at $15.04 on 19 November 2019. It is easy to see why investors pay so little for the department store legend.

Macy’s reported a quarterly revenue growth rate of -0.77%, a quarterly operating loss of -$21 million, and a net income of $86 million on 3 August 2019.

Faced with those losses Macy’s plans to stop selling fur by the end of 2020, CBS reports. Moreover, Macy’s is quietly closing a few stores. For instance, the company plans to close its iconic store in downtown Seattle.

I expect Macy’s could announce a major wave of store closings if it has a bad holiday season. In particular, I expect to see Macy’s exit smaller markets like Wyoming.

Barney’s New York

The famed New York department store Barney’s closed on 6 November; and let employees go without paying severance, The International Business Times reports. Barney’s went bankrupt and got sold to ABG Group (Authentic Brands), Fashionista, reports.

Barney’s operated seven stores in New York. Wipkiepdia reports Barney’s operated 22 stores across the country in August 2019. Notably, Barney’s; which was famous for its luxury brands, closed 15 stores in August 2019.

Thus, three iconic brands; Barney’s, Sears, and Kmart, are disappearing from the retail landscape before our eyes.

JC Penney Co. Inc. (NYSE: JCP)

I expect this retail dinosaur to die early next year. Highlights of JCP’s autopsy (excuse me earnings report) include:

  • Nine straight quarters of shrinking revenue growth.
  • A quarterly revenue growth rate of -7.42% on 3 August 2019.
  • A quarterly operating income of $17 million on 3 August 2019.
  • A quarterly net loss of -$48 million on 3 August 2019.
  • Quarterly net losses of -$154 million and -$151 million on 4 May 2019 and 3 November 2018.
  • Cash and short-term investments of $175 million on 3 August 2019.
  • Revenues of $1.034 billion on 3 August 2019.
  • A stock price of $1.08 on 19 November 2019.
  • A market capitalization of $341.675 million on 19 November 2019.
  • A 10.1% drop in sales during 3rd quarter 2019, The Dallas Morning News estimates.  

JC Penney plans to close 18 stores this year, CNBC reports. The company left the appliance business in Summer 2019 to save money.

I think JC Penney is in such sorry shape it could collapse after a bad holiday season. Additionally, I expect a major round of store closings at JC Penney next year. I estimate Penney’s operates around 800 stores.

I expect a dismal holiday season followed by hundreds of store closings at dozens of retailers in 2019-2020. The Retail Apocalypse is getting worse and transforming America. We need to deal with the phenomenon and the misery it is bringing to many communities. 

a homescontents