Yahoo Finance This Holiday Season Is Make or Break for These 4 Retailers
All of the brands on this list have been struggling for a long time. One has already died and come back from the dead (albeit in a minor way). Another has filed for bankruptcy (but appears to have the financing it needs to survive the holiday season), while the other two are just struggling.
The holiday season stands as a test of relevance for retailers. Consumers have limited time and money, so they concentrate on the brands most likely to win their dollars first, then move down the list looking for deals (if they end up with any of their budget left).
These four chains have slipped in relevancy to the point that many consumers may not even consider them viable options. If these companies can't change that perception, then this very well may be their last holiday shopping season.
Four retailers face a crucial holiday season. Image source: Getty Images.
1. Toys R Us
Toys R Us went bankrupt earlier this year and closed all its stores. That appeared to be the end for the chain, but the company's top debt holders decided to cancel a plan to auction off the company's intellectual property and instead plan to revive the brand.
That starts this holiday season with the company launching pop-up Geoffrey's Toy Box locations inside hundreds of Kroger stores. The success or failure of those locations will tell the brand's owners whether consumers have a hunger for the company to come back. That will almost certainly weigh heavily on whether the new owners move forward with their plans to bring back stand-alone Toys R Us retail stores.
2. Sears
Sears (NASDAQOTH: SHLDQ) has already filed for bankruptcy, but the company appears likely to secure enough financing to make it through the holiday season. It's hard to see how that won't be anything but a prolonged, unnamed going-out-of-business sale, but former CEO and major stakeholder Eddie Lampert hopes to keep a smaller base of stores operating.
That only makes sense if the company defies its past five years of history, and consumers show up during the holiday season. It's hard to picture that happening given the very real likelihood of a post-holiday liquidation, but Lampert has at least shown he does not quit easily.
3. J.C. Penney
The situation at J.C. Penney (NYSE: JCP) is not as dire as the one at Sears. New CEO Jill Soltau, however, has to show that the changes made by her predecessor Marvin Ellison have worked.
So far, the company has made what seems like the right moves. It added appliances, changed its women's apparel lineup, and added toy and baby sections when Toy R Us and Babies R Us closed. In theory, the company should gain from Sears' weakness, but that has not happened.
Instead, it appears customers have at least partly abandoned this type of department store. J.C. Penney's quarterly numbers have been erratic -- certainly not all bad. If Soltau can post a decent holiday season with a small increase in same-store sales, that could be enough to carry the company through another year.
4. Barnes & Noble
Barnes & Noble (NYSE: BKS) has been in a multiyear struggle for relevancy. It has seen sales slip steadily, and efforts to diversify its merchandise have generally not gone well. The company has aggressively added deals, promotions, and in-store events to increase traffic. That's going to continue during the holiday season, which will be a big test of whether consumers are willing to give the chain a chance, or if they have moved on.
It's probably going to be sad
All four of these retailers have become relics of a retail model that has largely gone away. None of the four have proved to be a major digital player, which has been shown to be a necessary component of retail success.
Perhaps J.C. Penney will pull a holiday surprise -- it's the healthiest of these four companies -- but even that seems like a reach. In reality, this very well could be the final holiday season for these four iconic brands.
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Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
