UPDATE: After years of huge losses and store closings, Sears warned investors that it has “substantial doubt” it will stay in business. Sears also owns Kmart.
As noted here recently, the well-established retail giants have seen significant loses the past few years. This downward trend hit a breaking point at the close of the holiday shopping season in a way that will very likely alter the retail industry this year and forever.
“The fourth quarter of last holiday season was a really important moment,” eBay CEO Devin Wenig told CNBC’s “Closing Bell” from the Shoptalk Conference in Las Vegas. “I think it was an inflection point where that was the end of retail as we know it. And I do think the restructuring of this industry is going to happen faster than a lot of people think…. the fourth quarter is the moment that people will look back on and say, ‘That’s when the current structure of the industry was irretrievable.'”
Wening continues, “I’m not sure all the retailers are going to even make it, in a healthy economy, to this holiday season,” Wenig said. “And I do think you are going to see drastic changes in store footprints and what stores do.”
While the eCommerce industry saw another record holiday shopping season with gains over the previous year, retailers including JCPenny, Macy’s, HHGregg and Sears have announced a large number of stores closings.
Wenig said he doesn’t think stores are completely going away, but that stores must be a “mini distribution center” to succeed.
“I think the complete death of stores has been greatly exaggerated,” Wenig said. “The consumer wants stores. The entire world will not be online. But there are both capacity and utility issues in retail. People don’t like poor store experiences.”