JCP - What Investors Need to Know About the Retail Apocalypse
With the holiday shopping season largely behind us, the bad news will start to flow soon from the usual retail suspects. J.C. Penney (NYSE: JCP), Sears (OTC: SHLDQ), and a variety of struggling mall retailers will almost certainly report poor results whenever they release fourth-quarter earnings reports.
Those reports will lead to a lot of stories about how Amazon (NASDAQ: AMZN) has devastated brick-and-mortar retail. The reports will point out that roughly 9,300 retail stores closed in 2019, up from 5,844 in 2018 and 8,069 in 2017. These stories will generally omit the fact that for every retailer closing a store, 5.2 are opening new locations. They will also fail to note that just a few chains are driving the majority of the closures -- 16 retailers were responsible for 73% of closures, according to the National Retail Federation as of summer 2019.
It's a confusing situation for investors. The "retail apocalypse" narrative has some grounding in truth, but it's a very simplistic view of what's actually happening.