NEW YORK (TheStreet) -- Outside of TheStreet's Brian Sozzi, very few retail analysts have anything insightful or otherwise interesting to say about the space. Most are mired in the same culture of obviousness that renders large-scale physical retail hopelessly pathetic.
However, I've always enjoyed reading Robin Lewis, who publishes The Robin Report. That's why I held back on my initial urge to call him out for inanity when I read what he wrote for Forbes -- a piece arguing Amazon.com (AMZN - Get Report) should buy Sears Holdings (SHLD - Get Report):
It's a win-win for both Jeff "Get Big Fast" Bezos and Eddie "Take the Money and Run" Lampert. Amazon gets roughly 2,400 U.S. stores (or "buildings"), overnight (1,300 Sears, 1,100 Kmart). The acquisition becomes Bezos' answer to omnichannel and the proven revenue synergy of consumers' ability to shop online and off; the convenience of proximity for pick up and returns; and facilitation of even greater delivery speed. So just as Walmart's 4,500 stores double as distribution centers, so would Amazon's acquired Sears/Kmart stores.
Sounds logical, but, like so many of the this company should buy that company articles, it lacks the restraint necessary to edit a creative imagination. If Lewis reeled himself in a bit, he might -- he might -- have something.
First, Amazon's not a physical retailer. And there's no reason for it to become one.At most, it would be kind of cool for Amazon to open flagship stores in a few relevant/key markets (e.g., Seattle, New York, LA). Like those rumored Google (GOOG) retail outlets that (as far as I know) never materialized or Intel's (INTC) excellent holiday pop-up stores. Pure tourist attraction, brand builder and spectacular destination for people to see your hardware and a truckload or two of your best-selling merchandise. If Sears has a location that works and it's willing to sell, there might be a fit along these lines. Second, Amazon appears to have fulfillment covered. From the company's recent letter to shareholders, here's Bezos:
Nineteen years ago, I drove the Amazon packages to the post office every evening in the back of my Chevy Blazer. My vision extended so far that I dreamed we might one day get a forklift. Fast-forward to today and we have 96 fulfillment centers and are on our 7th generation of fulfillment center design.Amazon will erect more infrastructure, but would wind up with way more real estate than it requires -- in quite a few undesirable locations -- after a Sears buyout. Outside of dealing with Sears for a perfectly-located store or three, I don't see why Jeff Bezos would break the stride of such a well-oiled machine. There's no need to take the drastic and ultimately unwieldy step of buying the mess that is Sears. Jeff Bezos has no reason to save the brick and mortar sector he obliterated. Other than doing a good civic deed, helping restore physical retail to its former glory would only take Amazon's collective eye off of the ball. With all due respect to Robin Lewis, I don't think he quite understands Amazon. He refers to the CEO as Jeff "Get Big Fast" Bezos. That's an easy and intuitive statement to pass, but it doesn't hold up. In fact, it has taken Amazon quite some time to get big. It's been a decades-long (and beautifully executed, ongoing) evolution. Consider that Jeff Bezos said this to Bloomberg Businessweek way back in 1999:
Our strategy is very, very clear: We're focused on long-term returns for investors. And to throttle back on investment now would be shortsighted. When we have less opportunity, that will probably happen. But as long as we have lots of opportunity, we're going to continue to invest commensurate with that opportunity in a very disciplined and methodical way, but in a long-term context. To do anything else, we believe, is irrational ...
Make no mistake about anything I've said here: Long-term profitability and building an important and lasting and sustained company is incredibly important to us. We just believe that, by investing now, we increase our chances of achieving those things.The above-linked shareholder letter from 2014 -- which includes a flashback to the classic one he wrote in 1997 -- echoes that sentiment and underscores the notion that Amazon has been getting "big" kind of, sort of, but not really all that "fast," for nearly 20 years. The last thing Bezos needs and, I presume, wants is to take on somebody else's problem, even if he's the one largely responsible for creating it. Follow @rocco_thestreet --Written by Rocco Pendola in Santa Monica, Calif.
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