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Best Buy has the most to gain if Sears closes all its stores


Sears store closing
Best Buy is winning market share from Sears’ shrinking
business.

Getty/Scott
Olson



Sears’
business is declining so rapidly
that Wall Street analysts
are now betting on who stands to win if the company closes all of
its stores.

In that scenario, the retailer with the most to gain is Best Buy,
according to a new analysis by UBS.

Best Buy might seem like an unlikely winner if Sears disappears.
It’s best known for selling electronics, whereas Sears’ main
businesses are apparel and appliances. 

But Best Buy has been aggressively expanding its share of the
appliance market in recent years. Thanks to that increasing
emphasis on appliances, as well as its proximity to existing
Sears and Kmart stores, Best Buy would get the biggest lift in
same-store sales if all Sears stores closed, analysts
found. 


SearsUBS Evidence Lab

Home Depot and Lowe’s would also get a huge boost in appliance
sales from the demise of Sears. Together, Best Buy, Home Depot,
and Lowe’s would capture about 80% of Sears’ appliance business
if all its stores closed, analysts said.

Amazon is missing from that list —
even though Sears is now selling its Kenmore appliances through
Amazon
 — because shoppers still prefer to buy appliances
in physical stores, according to the analysts. 

“While some of the appliance sales could leak to Amazon since it
now carries Kenmore products, we think physical stores will
remain the dominant channel for this category,” they wrote. 

Other retailers that would get the biggest same-store sales boost
from Sears’ stores shutting down include Pier One Imports, Dick’s
Sporting Goods, and Williams Sonoma, analysts said.

The gains from Sears’ business would be huge.

Sears sales have dropped roughly 70% in the last decade, but it’s
still on track to generate about $16 billion in sales in fiscal
2017, according to UBS. 

Sears’ biggest categories are apparel ($4.8 billion), appliances
($3.5 billion), home improvement ($970 million), consumer
electronics ($850 million), and sporting goods ($410 million),
according to UBS estimates.


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