Year to date, there have already been 40% more store closings announced than in all of 2018, according to a report from global marketing research firm Coresight Research. And yet, we still have four more months before the year is over. By the end of the year, over 8000 stores are expected to close. We are talking about household names like Sears, Kmart, Walgreens, Paylessand Barneys, are among the retailers that have recently announced store closings. Thanks to ecommerce and specifically Amazon.
According to reports in The Information, eMarketer has lowered its 2019 estimate for Amazon’s share of U.S. online sales to 37.7 percent from its previous estimate of 47 percent. That new figure, according to eMarketer, was derived from “new guidance” from data in Amazon CEO Jeff Bezos’ annual shareholder letter.
Amazon’s share of US online sales of 37.7% is still a huge number when you consider that in 2018, Amazon US online revenue was almost $260. And because US online sales growth continues to be in the low double digits vs. brick and mortar sales growth in the low single digits, ecommerce will continue to eat brick and mortar sales for lunch.
Tailored Brands, Inc. operates as a specialty apparel retailer the United States and Canada. The Retail segment offers suits, suit separates, sport coats, slacks, formalwear, business casual, denim, sportswear, outerwear, dress shirts, shoes, and accessories for men. It also provides women’s career and casual apparel, sportswear, and accessories; children’s apparel. When you think of Tailored Brands, Men’s Wearhouse, Men’s Wearhouse and Tux, Jos. A. Bank, Moores, Joseph Abboud, and K&G brands might come to mind. Tailored Brands also has a Corporate Apparel segment provides corporate apparel uniforms and work clothes to small and medium size business.
Let me say in this environment, going the specialty route is difficult because now with technology and ecommerce has allowed boutiques to thrive, making the landscape a lot more competitive.
Tailored Brands announced their earnings on Wednesday and despite being expectations for the second quarter, the company said it will halt their dividend payment plan Tailored Brands and to expect a drop in same-store sales of 3% to 5%. Now part of their turnaround plan includes a multiyear licensing agreement with the National Football League, but I think its lights out in the near future for this retailer as the chart suggests the stock is headed below $1.00 and subsequently being delisted.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.
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