Sears, Forever 21, Payless ShoeSource, and Destination Maternity are just some of the names that have succumbed to store closures in 2019. With the ever-shifting demographic of shoppers moving from brick-and-mortar shopping to online shopping, the trend could persist in 2020 and beyond.
Retailers “have announced plans to shut more than 9,300 locations. That’s up more than 50% from the total announced closures in 2018, which amounted to 5,844, Coresight said. Previously, the record was for the 8,069 store closures announced in 2017,” according to a CNBC report.
“The shift in consumer habits is driving the success of certain retailers,” Meghann Martindale, the global head of Retail Research at commercial real estate services firm CBRE, told CNBC in an interview. “We’ve seen consumer preferences change. … The apparel category is the perfect example of that.”
Is the worst over for brick-and-mortar retailers? Industry experts presume so, but others are wary of whether 2019 was just a one-off deviation from the norm.
“I think there are a lot more headwinds, and this is nowhere close to being over,” said Vince Tibone, a lead retail analyst on commercial real estate services firm Green Street Advisors’ retail team. “Especially over the next five years.”
For ETF investors looking to capitalize on the wave of disruption in various industries, including retail, they should take a look at the GraniteShares XOUT U.S. Large Cap ETF (NYSEArca: XOUT). The ETF essentially takes the S&P 500 and trims the unnecessary fat—what’s left are companies that aren’t averse to disruption and are constantly innovating to stay ahead of the times.
XOUT seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the XOUT U.S. Large Cap Index. The fund seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its assets (exclusive of collateral held from securities lending) in the securities included in the index.
Fund advantages, per the GraniteShares website:
- Aims to Leave Losers Out: Instead of trying to pick the winners, XOUT flips the investing paradigm by seeking to identify companies likely to underperform, and excluding them from the portfolio.
- Forward Facing: Technological disruption is challenging businesses across all industries. XOUT takes the 500 largest U.S. companies, and eliminates 250 names that may be failing to adapt.
- Alternative Indexing: Passive investing buys everything in the market, even companies in long-term decline. XOUT seeks to detect losers with quantitative scoring, and attempts to leave them OUT.
For more market trends, visit ETF Trends.