Target Corp. isn’t the only retailer preoccupied with damage control. Retailers, in the final countdown to Christmas, are up against disappointing sales in their biggest season of the year.ITEM #2:
One more sign sales missed the mark: retailers’ in-store sales for the week ended Sunday, Dec. 22, fell 3.1% from a year earlier while traffic plunged 21%, according to traffic tracker ShopperTrak. The decline is worth noting because Friday, Saturday and Sunday, along with Black Friday, were expected to be among the top four shopping days of the season.
With just two days to go before Christmas, it's becoming clear that shoppers won the annual game of chicken.ITEM#4:
While retailers aren't exactly tumbling off a cliff, they've rolled out aggressive last-minute efforts to entice shoppers to their stores or websites. Consumers are responding to these promotions, which include staying open for days straight, discounts of 40 percent or 50 percent and free delivery by Christmas as late as Monday.
Even with these inducements, though, shoppers are buying far more selectively than retailers had hoped, and some even say they'll wait until after Christmas to make purchases so they can score even bigger discounts.
“People just held back,” said Jeff Feinberg, managing director with professional services firm Alvarez & Marsal. “They just didn't spend as much, so retailers really had to drop prices in order to spur it,” he said.
After a strong start to the holiday shopping season, sales at stores are down for the third straight week. Overall, holiday sales are expected to be the weakest in four years, those numbers don't include online sales.
Those disappointing sales have left stores with a pile of unsold inventory. That means even bigger than usual sales. Amazon.com is going to have a "2013 after Christmas sale" that will offer 70 percent off on select items. Old Navy launched its "after holiday sale" on Sunday with markdowns of up to 75 percent.
It’ll come as no surprise to retail watchers that Barnes & Noble is in trouble, with Amazon continuing its decimation of the brick and mortar book world. But it’s not the only main street stalwart limping into 2014 by any means.IF THESE FIVE GO UNDER, THEY WILL CERTAINLY NOT BE THE ONLY ONES.
Independent agency Rapid Ratings measures the financial health of companies using public filings, assessing their efficiency based on 62 weighted data points from profitability to cash flow.
Rapid’s year-end figures for 2013 show stores in every category, from apparel to electronics, facing a struggle going into the next quarter.
“What this measures, essentially, is how prepared these companies are to withstand a difficult season,” said James Gellert, Rapid’s CEO.
“The companies we’ve determined as weak or deteriorating should be on a closer watch list.”
Based on Rapid’s 0-100 point scale, these brick and mortar retailers are operating with the least efficiency and are considered “high risk” by the ratings firm.
In reverse order:
Burlington Coat Factory = 50
RadioShack = 30
Sears = 30
Barnes & Noble = 24
Aeropostale = 23
AND COMPANIES IN TROUBLE WILL NOT BE LIMITED TO RETAILERS, EITHER.
CHRISTMAS ACCOUNTS FOR A HUGE PERCENTAGE OF TOTAL SALES...
... AND A WEAK CHRISTMAS WILL LEAD TO CUTBACKS IN JANUARY...
... AND THAT MEANS AN INCREASE IN UNEMPLOYMENT...
... AND A FURTHER CUTBACK IN CONSUMPTION AS THE PUBLIC BECOMES FRIGHTENED WE ARE HEADED FOR ANOTHER RECESSION...
... AND FRIGHTENED THAT THEIR MANDATORY HEALTHCARE COSTS ARE ABOUT TO GO UP EVEN MORE BECAUSE OF OBAMACARE.
I THINK THIS LEADS TO THE STOCK MARKET BUBBLE BURSTING BY THE END OF MARCH.