And For Your Last Meal? WSJ Puts Four Big Retailers on Death Watch

A crummy holiday selling season isn’t quite over, and the Wall Street Journal, in a smart roundup on troubled retailers, is already discussing the companies’ ability to make it through 2013 and beyond.

Sears (SHLD), Best Buy (BBY), JC Penney (JCP) and RadioShack (RSH) are the four basket cases and there is indeed cause for concern. Shrinking sales, with the high fixed costs of a retail operation, are ominous.

SHLD Revenue TTM Chart

SHLD Revenue TTM data by YCharts

Leverage doesn’t help either, as sooner or later suppliers will start to wonder whether a retailer can pay its bills.

SHLD Debt to Equity Ratio Chart

SHLD Debt to Equity Ratio data by YCharts

The market has found these four companies loathsome for some time, as seen in a stock chart.

SHLD Chart

SHLD data by YCharts

If you’re attracted to turnaround stories, probably best to find them elsewhere. Sears, under investor Eddie Lampert, has been starved of investment and its stores show it. Best Buy increasingly operates as a showroom for Amazon (AMZN), with Internet-wise consumers fiddling with the gadgets at the stores and then buying them online; the best bet for Best Buy shareholders is that its founder’s efforts to do a leveraged buyout proceed and at a nice premium. JC Penney, under former Apple (AAPL) retail chief Ron Johnson, has done its best to chase off its existing customer base by largely ending coupons, a great strategy on paper if not in real life. And poor RadioShack turned itself into a mobile phone store and competes against AT&T (T), Verizon (VZ) and other better-positioned outfits. D’oh!

From the editors of YCharts. We can be reached at editor@ycharts.com.

Read more articles about: Company News  

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