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An Analysis Of Amazon's Overlap With National Dept. Stores

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An Analysis Of Amazon's Overlap With National Dept. Stores

Any retail investor who fails to see that Amazon.com, Inc. (NASDAQ: AMZN) will continue to take market share in the retail space for years to come is in denial. JPMorgan analyst Matthew Boss recently took a close look at Amazon's overlap with national brands sold at department stores.

Boss found Amazon’s average department store brand overlap is currently at 66 percent (89 percent when adding re-sellers), with the highest overlap at J C Penney Company Inc (NYSE: JCP) (73 percent), Kohl’s Corporation (NYSE: KSS) (72 percent) and Macy’s, Inc. (NYSE: M) (67 percent). Boss mentioned that Nordstrom, Inc. (NYSE: JWN) (50 percent) and Dillard’s, Inc. (NYSE: DDS) (66 percent) also have significant overlap.

A Little More Specific

In terms of fighting the Amazon invasion in the space, Boss believes retailers will need to rely on convenience, value and/or innovation.

Related Link: Athletic Will Remain The Strongest Footwear Trend In 2016

In terms of convenience, he believes Dollar Tree, Inc. (NASDAQ: DLTR) and Dollar General Corp. (NYSE: DG) are well-positioned to stave off Amazon.

On value, off-price retailers TJX Companies Inc (NYSE: TJX) and Burlington Stores Inc (NYSE: BURL) also have a fighting chance.

When it comes to innovation/differentiation, Boss named Nike Inc (NYSE: NKE), VF Corp (NYSE: VFC), Lululemon Athletica inc. (NASDAQ: LULU) and L Brands Inc (NYSE: LB) as favored names.

Disclosure: The author holds no position in the stocks mentioned.

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Nov 2020China RenaissanceUpgradesHoldBuy
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