Amazon (AMZN) could be looking for new ways to extend its axe on retail.
The tech giant is allegedly mulling the idea of opening furniture and appliances stores, sources told The New York Times.
The stores would serve as showcases, the NYT reported, so people hesitant about purchasing refrigerators and couches online could check them out in person and then have them delivered to their homes. The company is even trying to figure out how to use virtual reality to allow consumers to see exactly how items fit in their own houses.
The e-commerce giant so far has been blamed for upending the tech industry, putting pressure on bookstores like Barnes & Noble (BKS) by opening up its own stores, and also striking fear in the hearts of Kroger (KR) and Whole Foods (WFM) with a new tech-friendly grocery store format.
Here are the five retailers that will be the most negatively impacted if Amazon does in fact open these stores.
As if Sears (SHLD) needs another headache. The struggling retailer is set to close 150 Sears and Kmart stores this year, many in which sell appliances and home furnishings. Just last week the company admitted that it is concerned about its ability to continue as a going concern after seeing its sales, cash flow and profits plunge for several years.
Amazon's arrival onto its turf would be bad news. Sears still holds about a 19% market share of the U.S. appliance industry.
Electronics retailer Best Buy (BBY) has struggled for the past roughly four years to gain significant revenue growth, including in its recent fourth quarter. But, one bright spot has been sales of appliances, in part fueled by the recovery in the U.S. housing market. Best Buy racked up about $3.5 billion in appliance sales last year, representing 9% of its overall business.
If Amazon starts to hawk refrigerators, Best Buy could be hurt.
J.C. Penney (JCP) began selling appliances last year, and now offers them at about 500 -- or half -- of its stores. While the business has gotten off to a strong start for J.C. Penney, the arrival of Amazon to the space could stunt the company's momentum longer term.
Specialty retailer Williams-Sonoma (WSM) sells products for the home at its more than 600 Williams-Sonoma and Pottery Barn stores. Already seeing sales declines across most of its concepts, the last thing Williams-Sonoma needs is Amazon selling couches and window coverings.
Bed Bath & Beyond (BBBY) is one of the largest players in the home furnishings space, operating 1,530 stores. Similar to Williams-Sonoma, Amazon's arrival into the home furnishings space could come at the expense of Bed Bath & Beyond.