Retail brick-and-mortar stores continue their slide
I read but did not keep track of a WSJ article describing e-commerce companies moving into otherwise dead shopping malls and converting them into fulfillment centers. Sounds like a good way to recycle vacated malls.
Some other articles on the deteriorating retail market. Also, an explanation why sales of vinyl records have slowed.
7/7/17 – USA Today – Sears to close 43 more stores as retail crisis continues – This is in addition to the 66 closings I mentioned on June 16, which is in addition to 180 announced since January 1st. Article says this brings the year-to-date total to over 300. I obviously missed 20 recently that were mentioned in the article.
Article says J.C. Penny is closing 138 stores, Macy’s is closing 68, and Radio Shack has shuttered over 1,000 stores since Memorial Day.
Article says target for cost cutting by Sears this year is $1.25B. Downside of shutting stores to save costs is that also shaves dollars off the top line revenue.
7/8/17 – Business Insider – 33 depressing photos show that Sears is a disaster – Photo tour of a Sears store in Glen Allen, Virginia shows large number of shelves with minimal stock, physical damage (water damaged roof tiles, an active leak, torn carpet, broken shelves), and multiple walls without any signage.
7/10/17 – Wall Street Journal – The Cosmetics Counter Was Long Immune to Discounting. Not Anymore. – Premium priced cosmetics which were previously only available at the counter of major department stores at a premium price are becoming available in chain beauty supply stores and even on-line. As you would then expect, the department stores have started discounting their prices.
If I’m reading the article right, chains like Sephora and Ulta are undercutting the prestige aura of the prestige brands. That, along with availability of premium brands on line will further undercut the top-line revenue and bottom-line margin of the department chains.
That will further undercut the survivability of the malls.
7/22/17 – Wall Street Journal- Why Vinyl’s Boom Is Over – Sales of vinyl records have plateaued after strong growth for a few years. I don’t have the ear to appreciate it, but vinyl records have a far higher quality of sound, according to audio aficionados.
A major reason for vinyl sales to flounder, according to the article, is that new record production is cut from digital files instead of analogue tape, which means at the starting point, vinyl will have no better quality than a digital song. So why spend $25 on vinyl for a couple of your favorite songs if it sounds exactly the same as a couple of $0.99 digital files?