Sunday Spectacle CCXXI


American Retail Bankruptcies
(to Q1 2017)

So far, retail industry is on pace to set a post-financial-crisis peak. Retail is definitely overbuilt in America and consumer debt is also too high, so the shrinking of the industry is not a huge surprise to me (the industry is growing overall but most of it is in Internet sales and the number of retailers are shrinking). Internet cannibalization is also hurting retail but I think that is a slow long-term threat; the real issue is overbuilt retail with way too many retail chains, not to mention malls/shopping centers/etc.

Retail is a tough industry for investors--generally no barrier to industry of any kind, and driven a lot by unpredictable hits, fads and trends (sort of like the consumer technology industry)--but I wonder if the current situation presents an opportunity.




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