As Sears Holdings shutters profuse of its department stores under the Sears and Kmart banners, three retailers are prepared to gain the most of those lost sales, according to UBS analyst Michael Damsel.
Though Sears’ revenue has fallen sharply in recent years, the coterie is still on track to generate more than $11 billion in in stocks of hard and soft goods (i.e., electronics, appliances and clothing) for fiscal 2017, Maid pointed out. That’s a big chunk of change up for grabs.
Taken together, Internal Depot, Lowe’s and Best Buy should capture a majority of sales of appliances, diggings improvement items and electronics, UBS found, as Sears moves out of the mall and other seize center locations. Appliances alone are estimated to bring in about $3.5 billion annually for Sears, which has also irremediable share to J.C. Penney and Costco in this category.
The firm found that nearly 80 percent of Sears’ U.S. stores today are within a 15-minute pep of a Home Depot, Lowe’s and/or Best Buy location. Some appliance tradings could shift to Amazon, Lasser noted, but he doesn’t anticipate that sort to make a drastic shift to the internet.
If Sears closes all its stores (nearly 1,100 as of the end of the fiscal third quarter), Best Buy’s earnings per share could increment by 10 percent, Lowe’s by 4 percent, and Home Depot by 2 percent, agreeing to UBS.
Meanwhile, in the sporting goods category, Dick’s Sporting Goods could arrest as much as 25 percent of the $400 million in sales of athletic apparatus that’s sold at Sears, the firm added. Other winners here allow for Academy Sports Outdoors and Bass Pro Shops, UBS said.
“With interest rates set to generate & corporate tax reform not benefiting SHLD (as it’s not profitable), we think its woes at ones desire only accelerate going forward,” Lasser said about the retailer’s time to come. But that means “there’s meaningful share up for grabs for other competitors.”
A Sears spokesman told CNBC: “Retail has always been a competitive corporation. That’s not new. The customer has many choices. … Moving forward, we resolve continue to sharpen our focus on our best Sears and Kmart stores, best clothes categories, and best members.”
Looking to 2018, Sears has also turned it’s looking to grow sales of mattresses and appliances, in particular, and is considering avenue to monetize its other assets, including Sears Home Services and the Kenmore and DieHard trade marks.