Week Ahead: As Equities Tank, What Do Corporations Think…?

In fact, the general lack of in-store enthusiasm is likely having an adverse impact on the Macy’s brand in general, as the store recently said it will close around 125 stores in lower-tier malls and cut roughly 9% of its workforce, or about 2,000 positions, as part of a three-year strategy – aptly titled ‘Polaris,’ likely as a nod to its iconic star-emblem branding.  

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traditional retailers stocks plunge as advanced tech and covid-19 take a toll

Macy’s, as well as Lowe’s (NYSE: LOW) and Levi Strauss & Co (NYSE: LEVI), are each listed as among the participants in BofA Securities’ 2020 Consumer & Retail Technology Conference.

Meanwhile, on-line retailers appear to be suffering from the general malaise spurred by COVID-19.

The recent downbeat performance of certain retail-related exchange-traded funds (ETFs), for example, including industry disruptor ProShares Long Online/Short Stores ETF (NYSEARCA: CLIX) and the Amplify Online Retail ETF (NASDAQ: IBUY), suggest consumers may generally be waxing cautious about discretionary spending in general.

Instead, the uptick in the Proshares Decline of the Retail Store ETF (NYSEARCA: EMTY) appears to be grabbing the spotlight.

According to McKinsey & Company, U.S. retailers in 2017 and 2018, alone, had vacated a quarter of a billion square feet, while continuing to announce thousands of additional store closures through 2019.

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the inverse relationship between Simon property group REIT and EMTY ETF

These empty retail spaces have bled into the value of certain real estate investment trusts (REITs) such as Simon Property Group (NYSE: SPG) – which owns malls where store closures such as Sears (OTCMKTS: SHLDQ), Kmart, Toys “R” Us and – more recently – Forever 21 have been growing more frequent.

Investors tuned-into corporate industry conferences in the week ahead may glean further updates on how trends in the communications, industrials, healthcare, and consumer sectors are developing, as well as management responses to the novel coronavirus and associated consumer spending appetites.

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Disclosure: The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the ...

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