By Matthew Carr
The casualties are mounting.
And the deaths now number in the thousands.
There’s nothing that can stop it. It’s a trend that began years ago and is going to only pick up speed.
For investors who heeded my warnings the past couple of years, they’ve protected themselves and found ways to profit. For others, you must figure out why you’re still living in denial.
I’ve spent much of the past several years telling you that the death of malls is on the horizon. Some people chimed in and claimed that was “fake news”… because that’s what we yell out nowadays when we’re confronted with something we don’t want to hear. But the trend is real – and irreversible.
As in any market, once you reach a point of oversupply, the bubble bursts. And the U.S. retail brick-and-mortar space was – and still is – the most bloated in the world. In the U.S., there is 23.5 square feet of retail space per person… That’s more than the next two closest countries combined.
Over the next several months, 3,500 retail stores will close.
Recently, Sears (Nasdaq: SHLD) basically admitted that it’s done. It’s closing 10% of its Sears and Kmart locations and stated it has “substantial doubt” about its ability to continue.
Of course, people argue its land holdings are worth billions. But that’s overly optimistic at best in my opinion.
J.C. Penney (NYSE: JCP) is shutting 14% of its stores. Macy’s (NYSE: M) and Nordstrom (NYSE: JWN) are shutting down locations as well.
So we’re seeing a mix of high-end and discount retailers being hit…
Plus, Wal-Mart (NYSE: WMT) announced it was closing 269 stores worldwide last year, with 154 of those locations being in the U.S. Even Warren Buffett dumped all his Wal-Mart stock.
Over the past 12 months, retail shares have been in the toilet. Shares of J.C. Penney and Sears are down more than 30%. Meanwhile, the damage to retail REITs is just starting to pick up speed…
Simon Property Group (NYSE: SPG) and Macerich Company (NYSE: MAC) are down 20%, as Taubman Centers (NYSE: TCO) is down nearly 10%. As retailers pull out of malls, mall operators are stuck trying to fill empty space.
And the only growth we’ve seen in the mall space are outlets. But that’s likely a short-lived trend from my perspective.
The internet is killing retail. And with vigor.
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Some retailers like Macy’s and Nordstrom have pushed heavily to beef up their e-commerce presence. But it’s not enough. Amazon (Nasdaq: AMZN) and mobile are devouring retail. And most companies are simply in survival mode – let alone figuring out how to catch up.
Just this past week, we saw that GameStop (NYSE: GME) is closing 150 stores as it struggles. Video game sales have moved online, with Electronic Arts (Nasdaq: EA) and other video game makers offering their own online stores. As I’ve stated before, there’s no real reason to have a brick-and-mortar game reseller like GameStop… It’s a dead concept.
By 2030, it’s estimated that 50% of all retail sales not tied to bars and restaurants will move …read more
Source:: Investment You
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