Retailers That Survive Can Expect A $20 Billion-Plus Boost In Sales
29 Janvier 2009 - 8:07PM
Dow Jones News
The retail industry's sweeping retrenchment is creating upward
of $20 billion in sales opportunities for retailers that will
survive the recession, a report released Thursday said.
Wal-Mart Stores Inc. (WMT), Target Corp. (TGT), Kohl's Corp.
(KSS), Macy's Inc. (M) and J.C. Penney Co. (JCP) will be among the
major beneficiaries, said the report by Deutsche Bank.
Best Buy Inc. (BBY), Bed, Bath & Beyond Inc. (BBBY) and
Staples Inc. (SPLS) will also see gains because of softness in
their respective categories, Deutsche Bank said.
"The retail shake-out will provide big opportunities for
survivors," said Bill Dreher, senior retail analyst at Deutsche
Bank.
The revenue opportunity, along with retail stocks tending to be
"early-cycle" in nature, meaning they tend to start rising in
anticipation of an economic recovery, makes a number of retail
stocks especially appealing, Dreher said.
Deutsche Bank especially like Macy's, Kohl's, J.C. Penney,
Target and Best Buy.
Companies that have many free-standing stores, like Kohl's, as
opposed to being largely mall-based, will likely pick up greater
share because of shifting trends in consumers' shopping habits,
Dreher said.
Deutsche Bank sees $19.2 billion up for grabs from large
retailers that have already closed or said they will be going out
of business. Circuit City Stores Inc., Linens 'N Things Inc.,
Sharper Image Inc. and Mervyn's LLC are in this group.
Deutsche Bank also includes in the group companies that are
still operating, but closing large numbers of stores. AnnTaylor
Stores Corp. (ANN) and Charming Shoppes Inc. (CHRS) are in this
group.
An additional $8.1 billion in sales stands to be lost by
retailers whose debt is rated below investment grade and/or have
negative earnings before interest, taxes, depreciation and
amortization, Deutsche Bank said.
The companies include Sears Holdings (SHLD), Saks Inc. (SKS)
Neiman Marcus , Bon-Ton Stores (BONT) Dillard's Inc. (DDS), Gap
Inc. (GPS), J. Crew Group (JCG) and Limited Brands Inc. (LTD),
Deutsche Bank said. The $8.1 billion assumes these retailers lose
5%, or more, of their sales.
The sales figures that Deutsche Bank lists are for the last
reported 12 months.
Even after the recession ends, analysts don't see consumer
spending returning to its former peaks soon, if at all.
As a result, sales aren't likely to be as high as they were
coming into the recession.
But the amount of sales freed up as currently troubled retailers
go under and greater problems emerge for weaker ones could well
offset the spending pullback.
-By Karen Talley, Dow Jones Newswires; 201-938-5106;
karen.talley@dowjones.com
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