Yah…this is huge. Not in size – about 10% sales accretion to AMZN – but clearly in strategic importance with the biggest read-through for retail since Sears/Kmart.
100% in line with Amazon’s strategy – not necessarily the one it has told the Street, but the one we outlined in our #retail5.0 deck of the 5 megacycles in retail, and the implications of us entering #5.
- Amazon needs stores.
- Whether want or need, Bezos wants. I’d argue very strongly that without stores Amazon’s growth will roll, and will never turn a meaningful profit.
- You know that old Pratt & Whitney North Haven facility? It’s Amazon’s. If you think it won’t end up as an experiential shopping experience that drives traffic (like COST did 25 years ago – and arguably still does today).
- Why not buy the Payless and Shack leases out of bankruptcy? Far-fetched, I know. But Amazon likely to go with a barbell store strategy.
- Stores in Boonies
- Small format
- High-end WFM-sized stores in top MSAs
- Local supermarkets
- WFM needs to not be public. In-line w Penney’s Bullish call on that one.
- WMT needs Bonobos. Acquired today.
- TGT needed WFM. Now I expect a bad dilutive deal for TGT at a time when Cornell is losing shareholder support. Will he go as far as to buy Wayfair? W unlikely to earn money – ever. TGT unlikely to grow ever again as a stand-alone company. #gofigure
This is the transition into #retail5.0 to a ‘T’. Massive paradigm shift, underinvested companies look outside of their traditional wheelhouse to survive.
Cross sector deals are probably next. Remember when Coke bought Columbia Pictures? When Anschutz merged his railroads and laid trackage rights for Quest Communications.
I’m not saying we go that far today – I hope not. But anyone who says a given deal “can’t get done” is not being intellectually honest as it relates to financial/strategic creativity.
This ends amazingly well for 20% of retail, and horribly for everyone else.
But I am absolutely refuse to accept the “Retail is Uninvestable” egregiously consensus call.
Retail 5.0 ǀ The box you don’t think outside of = #CareerCoffin ǀ LINK: Click Here
