While I agree that most pure retailers are probably value traps at the current moment, what say you guys about retailers that cannot by replaced by e-commerce sales? By this I mean retailers that sell things like high end furniture, beds, etc... things that people want to touch and see before they commit to a purchase. I think BBBY, which you mentioned, and moreso Williams-Sonoma fit this kind of bill.
Specifically about WSM, they are already in the top 10 in the US in e-commerce sales. Over 50% of their sales are online, and I don't believe you can replace the rest of their sales with e-commerce. Correct me if I'm wrong, but I don't think many people are going to be buying high end sofas, dining tables, beds, etc. online. So it seems to me they have already filled the online niche of their products that can actually be sold via e-commerce (cookware, utensils, small appliances...), and continue to be a sought after choice for things you need to buy in person as well. It isn't firesale cheap like a lot of retail, but its price has been thoroughly affected by the current environment. I think its price is trading marginally below what its worth if you're conservatively valuing it, but maybe not a margin of safety high enough considering the outlook of retail in general.
Just curious as to what other's sentiments are about these type of situations. |
