ADAM SHAPIRO: Welcome back.
Brian Sozzi has been tracking this year's retail apocalypse.
And, Brian, let's start with--
I hate to say the biggest losers of 2020
because I know who you're going to say,
and the company does a lot, but go for it.
BRIAN SOZZI: Well, it's more fun to start on the biggest losers
there, Adam.
It's just true disaster stories that perfectly encapsulates
the "retailpocalypse," which essentially is just doom
and gloom spreading throughout retail through a lot of store
closures and bankruptcies.
But the biggest loser is absolutely Macy's.
This company has been an absolute train
wreck throughout 2020.
You had same-store sales down about 20% in the third quarter.
They came out in February said they're
closing 125 stores in the hopes to save $1.5 billion.
A true disaster.
They're hemorrhaging money.
They have a lot of debt.
It's not a good situation.
And what I think Macy's executives still
don't quite understand is that once humans get vaccinated,
you know what?
We actually like shopping online.
We're not going back into your big, giant stores
with no employees for customer service.
Bye-bye, Macy's.
I think this company is set up a very challenging 2021.
SEANA SMITH: Well, Sozz, as we have clear losers,
there's also clear winners from this pandemic.
A couple of retailers have really outperformed their peers
over the last several months.
What's one or is there one retailer that you would say is
the big winner for this year?
BRIAN SOZZI: Big winner, Seana, is Lululemon.
What you can't see on camera is I'm wearing joggers right now,
and yeah, they're from Lululemon.
It's just the new work-from-home attire,
and you continue to see it in Lululemon's earnings.
Now, their stores were closed in the second quarter,
so you only saw same-store sales up about 8/10 of a percent.
But the company is going to report earnings on December 10,
and a lot of analysts that I talked to on the Street,
they're looking for a blowout quarter.
Same-store sales potentially near 10% increase.
That is huge.
You're not seeing those gains anywhere else.
Bottom line is this.
The company continues to innovate.
People continue to spend $130 on these pairs
of joggers and various clothing from the company.
And oh yeah, in the middle of the year
they spent $500 million to buy Mirror,
and you walk into a Lululemon store now
and you see Mirrors start to be on sale.
It's a good story right now and probably
a good story for 2021 too.
SEANA SMITH: Hey, Sozz, I want to ask you about that Mirror
purchase because I think a lot of people
were questioning whether or not that $500 million
acquisition made sense, if it was going to outperform
here over the next--
I mean looking beyond 2020, beyond 2021,
if it was going to be a winner.
But it sounds like you think it actually was the right move
and it could compete even though there's a clear winner
out there, and that's Peloton.
BRIAN SOZZI: Look at it now.
Ever since Lululemon made that acquisition of Mirror
during the early summer, Peloton's valuation
has gone even higher.
So it tells you that Lululemon, while they paid out
through their nose for this to buy Mirror,
it looks to be at a somewhat decent
valuation given where Lulu--
where Peloton has come since.
But the reason why they pulled the trigger
is because a lot of Mirror shoppers
obviously go to Lululemon.
So there was a lot of overlap there, a lot of great data that
will help them sell more tight joggers for $130 a pop
and really expensive Mirrors.
ADAM SHAPIRO: Brian, I know that Target was our company
of the year last year.
They're the most interesting story of the year.
Why so?
BRIAN SOZZI: Well, Target is not-- it's
not a new retailer, Adam.
They operate 1,900 stores, yet they have put up growth rates
this year as if they were-- they have reinvented the wheel
or they're some kind of new magical retailer
selling magical products.
But really, they had 155% same-store online sales
growth in the third quarter.
Again, that's another-- that was another triple-digit increase
for this company.
Same-store sales up in the third quarter 10%.
You don't see retailers put up numbers
like this, let alone a company that has 1,900 stores.
For them, it really boils down to two things.
I like the new Ulta deal they signed.
You will see more shops opening up in Targets--
Ulta, the shops, opening in Target
by the fall of next year.
Also too they have just reinvented their business.
I can order something right now from Target,
drive up into the parking lot.
A Target employee brings me out my $200 in groceries
and call it a day.
That's a great ease and convenience.
ADAM SHAPIRO: So let's look forward.
After we've dogged Macy's, we've praised Target, what's going
to happen to big-box stores?
Are malls dead?
Is there going to be a mall that anyone wants to go to?
BRIAN SOZZI: Malls are done, Adam.
I hate to be the bearer of bad news
and end this fine, fabulous special with being
a Debbie Downer, but malls essentially
no longer serve any purpose.
I can go to Target.
I can have now same-day delivery through their ship service,
and they can deliver me my clothes, my new Levi's jeans,
which also is another win with Target
because they're now selling Levi's jeans inside of Target.
They can have it in my house for under an hour.
Why do I need to go to the mall and risk getting sick?
SEANA SMITH: No.
Less and less people are traveling to malls, especially
these days, but also just before the pandemic,
it already seemed like it was dying here.
All right, Sozz, thanks so much for joining us.