Reinvention Is The Key

Month of October

In the world of traditional retail, people can’t stop talking about the apocalypse that the industry is facing, with massive store closures happening all over the world. However, it is just as true that a number of tools are being made available so that the industry itself doesn’t become a self-fulfilling prophecy. And, of course, if it happens to pass, traditional retailers will be more to blame than e-commerce companies. What we need to understand is that the industry is evolving and that, therefore, we must reinvent ourselves to face the giants of online retail, such as Amazon or Alibaba. Reinvention is the keyword for what’s to come.



Last week, in one fell swoop, Credit Suisse downgraded Macy’s (NYSE:M), Gap (NYSE:GPS), and L Brands (NYSE:LB), the parent company to Victoria’s Secret.  The research arm of the investment bank is concerned that each company’s sales trend could continue to deteriorate, particularly given this year’s shortened holiday-shopping time frame.


More than two decades ago when a mega entertainment and shopping complex was being conceived on a vast swath of swamp land in New Jersey, the iPhone didn’t exist, Amazon was only selling books online and malls were where you went for all your shopping needs.


West Village was built for the new urban lifestyle when it opened in May 2001. Almost 20 years later, the Uptown Dallas district remains relevant, even though there’s more competition for cool retailers that land in the market. It also has density, which is a positive retail real estate buzzword in the sprawling Dallas-Fort Worth market these days.


National Retail Properties (NYSE:NNN) is one of two real estate investment trusts (REITs) in the net lease space that can claim bellwether status.  It has rewarded investors with annual dividend increases for decades, building a large and diversified portfolio of single-tenant retail assets along the way.  But there’s one very big problem that dividend investors need to know about before they buy this stock. 


Despite investor fears that e-commerce giant Inc. (AMZN) would steamroll the retail industry, four big retailers have adapted and are thriving, beating the company in stock performance.  While shares of Amazon have gone nowhere over the past 12 months through Tuesday’s close, Walmart Inc. (WMT) is up 24%, Target Corp. (TGT) is higher by 37%, Costco Wholesale Corp. (COST) is up 32%, and Ross Stores (ROST) has returned 16%.  Barron’s outlined the trend in a recent story.


Vacant storefronts are the scourge that is eating New York City.  At least, that’s been the story for the past couple of years. Bleecker Street in Greenwich Village went from high-end fashion destination to a row of empty shops reminiscent of the Rust Belt.   Manhattan’s Upper East Side has been “facing a retail vacancy epidemic.”


The “ugly middle” never lasts.  Not in retail, and not in restaurants.  What we’re seeing right now is a very similar situation that the retail industry faced in 2008 — too many options and not enough money to go around.  Those that survived this saturation in retail were split on one of two sides of the spectrum: either they focused on speed and efficiency or on delivering an elevated experience.


Amazon on Thursday reported that third-quarter net sales rose 24% to $70 billion, as net product sales rose to $39.7 billion from $33.7 billion a year ago.  In North America, its biggest market, net sales rose to $42.6 billion from $34.3 billion a year ago, according to a company press release.


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