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Amazon Can't Win The Battle Against Off-Price Retailers

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Amazon Can't Win The Battle Against Off-Price Retailers

Can off-price retailers win the battle against the mighty Amazon.com, Inc. (NASDAQ: AMZN)? Simply put, yes — at least according JPMorgan's Matthew Boss.

While it isn't a secret that Amazon is looking to enter the clothing and apparel space, Amazon's strategy is more akin to that of a full-price department store, CNBC noted. There are already ample signs that the department store is under pressure, including the fact that since 2011 the group has lost around $25 billion in sales and are on track to lose an incremental $22 billion in sales over the next five years.

But on the other hand, off-price retailers have gained $14 billion in incremental sales since 2011. The group is different in many ways from full price and department store names since they source from 18,000 vendors in more than 100 countries, which gives them a competitive advantage.

For example, Ross Stores, Inc. (NASDAQ: ROST) offers a savings of 20–60 percent below products Amazon sells, but more importantly, Ross Stores constantly changes its product assortment, which gives it flexibility.

Also, off-price retailers are benefiting from landlords and mall owner's willingness to partner with companies and take over spots that are vacated from sporting goods and office retailer closures, the analyst added. This is even beneficial for off-price retailers since high-traffic malls boast better conditions and foot traffic as opposed to strip centers where the group are mostly contained to today.

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Latest Ratings for AMZN

DateFirmActionFromTo
Sep 2019MaintainsOutperform
Aug 2019AssumesBuy
Jul 2019MaintainsOutperform

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Posted-In: malls Matthew Boss Off Price Retailers retailersAnalyst Color Analyst Ratings Best of Benzinga

 

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