It is no secret that e-commerce giant Amazon.com (AMZN) has turned the retail sector on its head in recent years. As Amazon’s presence has grown and the company’s reach has expanded, there have already been a string of brick-and-mortar retailers forced to shutter up stores and call it quits, but more are likely to follow.
At first, it was just the traditional book retailers like Barnes & Noble (BKS) and Borders that came under fire, but the “showrooming” effect spread to other sectors like electronics and home goods. Best Buy (BBY) and Circuit City feeling the impact.
As it stands now, EVERY retailer is under pressure. Amazon offers quick delivery, rock-bottom prices, and inventory selection that a brick-and-mortar retailer can only dream of.
The credit rating agency Fitch recently referred to the current situation as “Intense Apparel Retail Stress Test”. It estimated that by the year 2020 Amazon will have captured 25% of the overall retail market, versus just 7% in this year.
Fitch believes that if its forecast is correct, around 400 of the nation’s 1,200 malls would be in jeopardy of closing.
It would be hard to bet against the forecast. Amazon has managed to dominate retail in recent years, and as its strength and presence grows, every major retailer faces a bleak future.
Based on the possible impact Amazon will have on malls, let’s look at five stocks that you would be wise to avoid moving forward.