- Bloomberg – America’s Retailers Are Closing Stores Faster Than Ever
Amazon is gobbling up most of the industry’s online growth
The battered American retail industry took a few more lumps this week, with stores at both ends of the price spectrum preparing to close their doors. At the bottom, the seemingly ubiquitous Payless Inc. shoe chain filed for bankruptcy and announced plans to shutter hundreds of locations. Ralph Lauren Corp., meanwhile, said it will close its flagship Fifth Avenue Polo store — a symbol of old-fashioned luxury that no longer resonates with today’s shoppers.
Comment
We commented yesterday on hefty short positioning in derivatives tied to commercial properties (CMBX BBB- indices), which are bets on the demise of brick and mortar retail. The chart above of store closings paints a very depressing picture for department store retailers battling online giants like Amazon.
The chart below shows retail job losses month-by-month along with average CDS (5y) for major department stores (blue line). Retail has shed 61k jobs over the previous two months, its greatest pace since the Great Recession. CDS for department store have room to run.
