The Best And Worst Retailers Of 2013's Q3
Rankings show importance of e-commerce, highlight tough markets, and emphasize the desperate need for a couple more turnarounds
Third-quarter earnings reports have flooded in, and with them, the top retailers of the quarter have been declared. The numbers show that Amazon is the bigger winner for 2013’s Q3. In the latest quarter, the online retail giant showcased a 24 percent growth in revenue from the same time period a year ago.
This shouldn’t come as much of a surprise considering the growing number of consumers turning to e-commerce over the past year. comScore reports that desktop-based e-commerce spending has grown 13 percent year-over-year, reaching $47.5 billion. While comScore remarks this is a little bit lower than the prior quarter, this quarter still stands as the sixteenth consecutive quarter of year-over-year growth. Despite the fact that consumers’ interest in the housing and automobile industries have caused some diversion of discretionary spending, e-commerce accounted for 9.4 percent of consumers discretionary spending in the third quarter — the highest third quarter share on record. And if the position of Amazon doesn’t already suggest it, comScore still expects the e-commerce growth rate to overtake that of brick-and-mortar stores in the future.
However, Amazon has a little bit more than just the rising popularity of e-commerce to thank for its success in the third quarter. Upon the release of the financial results, CEO Jeff Bezos presented a long list of accomplishments, ranking from the launch of Login & Pay, the release of new Paperwhite and Kindle Fires featuring the Mayday button, the newly added seven-day shipping, the moving of 8 million square feet of fulfillment center capacity online, and the deployment of 1,382 Kiva robots in three of its fulfillment centers. Needless to say, new initiatives at Amazon have not only kept the online retailer busy, they can be attributed to its growth.
Following Amazon, the remaining top five retailers in order of highest to lowest revenue gains year-over-year include: GameStop, which boasted an 18.8 percent increase, Lululemon Athletica with a 17.9 percent climb, Cabela’s figures show a 12.9 percent increase, and Urban Outfitters had revenue growth of 12 percent. GameStop in particular experienced strong growth from new software sales, including the in-demand Grand Theft Auto V, and from gaming console sales, including Nintendo’s 3DS and 2DS systems.
The retailers ranking in the bottom five are also come as little surprise, given the struggling teen retail market and the large amount of media attention emphasizing existing turnarounds or the need for change post-haste. In order of greatest to least amount of loss, the five lowest performing retailers in the third quarter of 2012 were: Abercrombie and Fitch with 12 percent revenue loss, Sears’ figures showed a loss of 7.2 percent, American Eagle finished down 6 percent, JC Penney came in down 5.4 percent, and Staples lost 4 percent.
Given the competitive nature of teen retailers in the market, there is no surprise that A&F comes in with the largest amount of loss, considering the recent media coverage surrounding CEO Mike Jeffries’ controversial statements and investors’ demands for his replacement in the spring. While the company is working to improve offerings, most remain firm that the company would be better off in the hands of someone with a new vision. JC Penney’s new CEO has begun to make a bit of a comeback with reports of increasing same-store sales, but whether or not the brand will continue to lift itself out of the still has yet to be seen.
Sears, however, is still in somewhat questionable hands, following Eddie Lampert’s appointment as CEO in February. Lampert, who decided to combine Sears and Kmart in 2005, is currently being criticized for not investing enough in the business, leaving the brand to continue “selling its body parts so it stays alive today,” analyst Brian Sozzi says. Indeed, the company recently decided to spin off its Land’s End clothing business in a further desperate attempt to stay afloat amidst increasing competition from Walmart, Target, and online retailers. However, this spinoff is not expected to do enough to save what Sozzi declares is “a brand going down the drain” due to an overall failure to “do enough to stay competitive.”
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