Monday, July 18, 2016

Severe Weather Advisory: Department Store Headwinds Continue to Intensify

The following chart shows nonstore retail sales divided by department store sales (excluding leased departments).

Click to enlarge.

What's going to stop the long-term trend? If you look closely at the chart, the trend may actually be failing to the upside over the last 6 months. That means the department store headwinds are actually getting even worse than might have been expected.

Saffir-Simpson Hurricane Wind Scale: Category 5

Catastrophic damage will occur: A high percentage of framed homes will be destroyed, with total roof failure and wall collapse. Fallen trees and power poles will isolate residential areas. Power outages will last for weeks to possibly months. Most of the area will be uninhabitable for weeks or months.

This could help explain why, as of today, the Amazon (AMZN) to Sears (SHLD) market cap ratio is a whopping 218 to 1 ($347.3 billion / $1.59 billion).

Way to go Eddie Lampert! Fighting hurricanes, at nearly unspeakable odds, nearly single-handedly? You da man!

October 9, 2007
Mapping Lampert's next Sears move

NEW YORK (Fortune) -- Billionaire hedge fund manager Eddie Lampert, who controls Sears Holdings (Charts, Fortune 500), has earned a reputation as a boy wonder of retailing by wringing profits from an aging department store chain.

Well, you know what they say. Nobody ever rings the bell wrings the profits at the bottom!

This is not investment advice. I have no positions in Amazon, or Sears, or J.C. Penney, or Macy's, or Nordstrom, or...

Source Data:
St. Louis Fed: Custom Chart

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