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5 Future Amazon Victims That Wall Street Is Ignoring

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Amazon.com, Inc. (AMZN) will crush the fashion industry into oblivion over the next few years as it sets out to conquer the apparel market. It may not happen tomorrow or next week, but it is in the cards.

Analysts at Cowen are expecting AMZN to generate some $28 billion in apparel sales, topping Macy’s Inc. (M), the largest department store operator, which has held the title for years. By 2021, the Seattle-based company will sell $62 billion in annual apparel sales. The next biggest competitor will be TJX Companies Inc’s (TJX) TJ Maxx chain with $26 billion, with M in third place with $22 billion.

It’s hard to underestimate the magnitude of the bad news for apparel makers across the sector, ranging from high fashion operations such as Ralph Lauren Corp. (RL) to makers of basics such as underwear name Hanesbrands Inc. (HBI). Many of these companies are already reeling from a decline in retail sales and lack the resources to boost their e-commerce business so that it would offset the declines from bricks-and-mortar operations. The leaves the apparel makers with little choice but to play ball with Amazon and the margin-crushing discounts that will follow.

Indeed, Jeff Bezos & Co. has shown a willingness over the years to sacrifice short-term profits for long-term growth. Thanks to the success of its Amazon Web Services (AWS) cloud computing business and Amazon Prime, AMZN can operate with even thinner profit margins.

Prices and data are from the original InvestorPlace story published on May 10, 2017. Click on ticker-symbol links in each slide for current prices and more.

SEE ALSO FROM KIPLINGER: 6 Retailer Stocks That Can Stand Up to Amazon

This slide show is from InvestorPlace, not the Kiplinger editorial staff.

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