Retail Happenings of the Week

Millennials don't like brands. No news there. But this piece about the rise of no-name attire has some projections that furthers the "Amazon Effect" narrative ((and helps explain the seemingly ludicrous Kroger Inc. ($K) clothing line)). "This year Amazon will leapfrog T.J. Maxx owner TJX Cos. and Macy’s Inc. to become the second-biggest seller of apparel and footwear in the U.S., Wells Fargo estimates." And "In some categories—like the active wear that Americans increasingly wear all day, whether or not they hit the gym—private labels combined account for 20 percent of the market, according to researcher NPD." Short Lululemon ($LULU)? Addition reason (see above) to short TJ Maxx ($TJX)?

If this stresses you out, at least you can double down on discounted protein and work off the anxiety, given the look of GNC Holdings Inc. ($GNC). What does this all mean for the malls? Not a whole lot of good. Hence, mud. Though some beg to differ to the tune of $25b.

Some predictions for 2018. The most obvious of which is that there'll be more retail bankruptcies to come in 2018. Just (maybe?) not Charlotte Russe, which has seemingly pulled off a miracle and kept itself out of bankruptcy court with a consensual deal with its lenders in hand. Last note: while "treasure hunt" retailers may not be impervious to Amazon, Costco Wholesale Corporation ($COST) very well may be: it reported a 17% increase in earnings, a 42.1% increase in e-commerce sales and steady membership rates. The stock popped nicely going into week's end.

Retail.Captain-Obvious

This is interesting. Upshot: retailers ought to move away from the traditional seasonal approach if they want to compete with millennials insatiable year-round appetite for experiences. (PETITION NOTE: of course, it's too late for a number of retailers: we suspect this year's holiday season is make-or-break for a number of retailers, e.g., Nine WestCharlotte Russe99 Cents Only Stores). And marketers are focused on the 26 year-old millennial who apparently barely know how to put on pants in the morning (firewall). Good luck, though: JP Morgan ChaseCitigroup, and Bank of America just reported numbers and noted higher credit card-related losses in the last quarter. Each is increasing reserves against losses. Spending was up last month in auto, retail and restaurants, by the way. Query whether that spending will translate into future credit card losses and reserves.