Home » Stocks » Bear Case Scenario Sears $SHLD, $M, $XRT, $COST, $DLTR, $RTH, $WMT, $TGT

Bear Case Scenario Sears $SHLD, $M, $XRT, $COST, $DLTR, $RTH, $WMT, $TGT

Sears is about to release earnings. Ponder this Bear Case Scenario:

Retail at best is a blood sport. Maybe knife fight is a better descriptor. Margins are competitive. you have to buy right and then sell like crazy to get rid of the wrong stock.

Sears used to be Middle America. The middle class is disappearing. Wal-Mart has the lower regions fairly well covered.

Sears quality is not the solid middle ground. They have gone down. Once you get used to quality you find it hard to give up. Quality gets great margins. Sear does not get great margins. Hence the perpetual death spiral.

Sears is retreating from Canada which has money for decent retail.

Sears major problem is the hedge fund guy who bought them because it was going to be an easy fix. This fellow who probably wears bespoke suits and has tailors report to his office for fittings in between board meetings does not understand retail or restructuring.

George Gutowski writes from a caveat emptor perspective.