2019 has been a challenging year for retailers, and these three brands are on the verge of becoming irrelevant.
For many brick-and-mortar retailers, 2019 was not a great year. Over 10,000 stores closed their doors this year, including DressBarn, Gymboree, and Payless. And it’s estimated that for every 1% increase in online sales, up 8,500 stores will close their doors.
Of course, this isn’t true for everyone. Stores like Target and Walmart outperformed the market in 2019, and most analysts agree these companies will continue to be more profitable.
But the following three companies find themselves at a crossroads. Unless they make some significant changes, each of these retail brands risks becoming irrelevant in 2020.
1. JC Penney
In early August, JC Penney was notified that it was at risk for being delisted from the New York Stock Exchange. The reason? The company’s shares were trading below $1. The company has since regained compliance, but the problems aren’t over for this struggling retailer.
JC Penney does have a new management team in place, and the company did see improvements during the third quarter. But the company’s sales continue to decline, and it’s still saddled with $4 billion in debt.
2. GameStop
GameStop’s shares are currently down more than 50% year to date. The company continues to fall short on its quarterly earnings reports, and investors have grown accustomed to hearing bad news.
GameStop used to be a big player in the gaming market, but then customers began shifting to mobile gaming. During its latest earnings report, management reported that sales had declined by 26%.
However, the company is hopeful that it can improve profits by 2021.
3. Victoria’s Secret
Victoria’s Secret used to be one of the most popular lingerie retailers, but the company has experienced a lot of backlash in recent years. Increasingly, consumers are embracing body positivity.
But Victoria’s Secret doesn’t seem to have changed its marketing strategy since the 90’s. The company’s website still features images of rail-thin model. Whereas competitors like Aerie and ThirdLove cater to customers of all sizes.
The company’s management has stated that it plans to re-evaluate every aspect of the brand. But the company’s shares are still trailing by more than 30% this year.
