The spate of bankruptcies from brick-and-mortar retails stores could be spooking investors as Sears Holdings filed for bankruptcy protection on early Monday after 125 years in business. The retail store is expected to shutter 142 stores by the end of the year with liquidation sales expected to begin shortly.
Despite capital injections from billions of CEO Eddie Lampert’s own funds the last five years, Sears was mired in debt with a $134 million debt payment due, which was the proverbial nail in the coffin.
Furthermore, the retail market, like the rest of the sectors, are recovering from last week’s equities sell-off. The Dow Jones Industrial Average posted a 1,300-point loss in two consecutive sessions before rallying by almost 300 points to end last week’s trading session.
However, this week’s trading session thus far has been highlighted by volatility rearing its ugly head for risk-averse investors, but for those who don’t mind seeing the red in stock prices, it’s a welcome sign as a discount to buy into retail ETFs. Even with the latest closures occurring in the age-old brick-and-mortar retail businesses, these same companies are expanding their internet presence to enhance their online retail experience.
“The traditional division between online and in-store retailing continues to shift and blur,” Marshal Cohen, NPD Group’s chief industry advisor, said in a statement. “Traditional store retailers are upping their online games these days, while they are also finding ways to drive traffic to stores with improved efficiency, more entertaining shopping experiences and better value. Online retailers are also finding ways to blur the retail divide in their own ways, offering lower prices and shipping options that get products to consumers faster than ever.”
For more information on the consumer sector, visit our consumer discretionary category.
