Amazon (AMZN) - Get Report is taking market share from high-end stores. This is creating a massive secular tailwind for discount retail houses, one analyst says, as high-end brands turn to the discounters to sell inventory.
Meanwhile, Kohl's (KSS) - Get Report , one of the better-known discount retail stores, saw its stock plummet 10.9% to $56.05 after it reported an earnings miss and significantly lowered earnings guidance for the year. TJX (TJX) - Get Report did beat earnings expectations, and raised guidance.
But for those who are concerned about the damage Amazon can do to brick-and-mortar on a longer-term basis, John Morris, senior brand apparel analyst at D.A. Davidson & Co., says learn to differentiate between retailers. It's the off-priced group that actually could see a tailwind from Amazon, while the full-priced retailers will get hurt, he told TheStreet.
That's because full-priced department stores like Nordstrom (JWN) - Get Report and Macy's (M) - Get Report have gotten hit at least somewhat by Amazon, so the up-scale brands like Ralph (RL) - Get Report that couldn't get everything off the shelves in those stores may start selling in the off-priced stores, as those brands don't advertise discounts online.
See the full interview here.
Taking a look back shows an interesting trend.
In the past five years, Amazon shares are up 495%. Yes, Amazon has scaled into several different sectors, but e-commerce has been a huge part of that stock run.
In the same span, the full-priced Nordstrom shares are down 43%. Macy's is down 62%.
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