Another day, another category killer trims their store count. On the heels of Radio Shack's announcement earlier this week to close a chunk of their stores, the market brutalized Staples' stock on their move. It should applaud as Staples kill off marginal stores. Are you using as many pencils, binders and Post-It(R) notes as you did ten years ago? Are you paying as much for a PC as you did two years ago - if you buy one at all?
The market evolves and stores adapt. Closures play havoc with employees but they are also a sign of healthy responses to market conditions. Smart move, Staples. Over-reaction, stock market.
Thursday, March 6, 2014
Tuesday, March 4, 2014
RADIO SHACK SHRINKS
Retail is a dynamic, ever-changing universe. A&P was once the largest retailer in the world. Walmart was once a tiny five-and-dime compared to Ben Franklin stores. Chains like Home Depot and Staples and CVS barely existed 25 years ago. And don't get me started on fashion retailers like H&M which began in 1947 in Sweden and now operates in 53 countries. Kmart used to be the king of discount; now, they're the discounted king dragging venerated Sears to the bottom of the retail pond.
Online retailing - or e-tailing - is definitely impacting their bricks-and-mortar brethren but mostly at the margin. The overall online numbers remain small - less than 6% of total retail sales in the US. Those marginal places where online is winning a bigger piece of the pie, however, have been books, entertainment (think iPod downloads) and electronics. And it's murder in those neighborhoods.
The latest casualty is RadioShack which just announced the shuttering of 1100 stores, roughly 20% of their locations. Ouch. It's tough to live on the margin. Just ask Circuit City (d. 2008) or any of the thousands of mom-and-pop stationers, drugstores, apparel retailers, restaurants, gift shops, shoe stores and the like that have perished in this dynamic industry we call retail.
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