Death of Brick & Mortar Retail

Think of retail as a highly leveraged bank/hedge fund with a 30 times leverage ratio.

Most retailers have less than a 5% margin. Sales have to decline about 10-15% and the whole thing collapses.

Think of Walmart for e.g. Imagine, the shoe rack disappearing (Zappos, ShoeDazzle etc…), then DVDs (Netflix…), then clothes & so on…

All it needs is small changes at the edges & that leads to a product death spiral.

The broader impact is even more fascinating:

  • What happens to malls that rely on retailers as anchor tenants?
  • What happens to the suburban lifestyle?

More here:

This entry was posted in Uncategorized and tagged . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s