It's not just Myer. JB Hifi and Harvey Norman are favourites of shorters as well. It's the thesis that "Online only businesses like Amazon will put bricks and mortar retailers out of business". The idea is that online retailers don't have to pay retail rent and wage expenses and pass those savings onto consumers through lower prices. As more consumers move away from bricks and mortars, the sales fall, but fixed expenses like rent and wages don't fall, which impacts profits disproportionately.
The other reason I've seen offered is that the housing slowdown is just getting started, and as house prices fall further, people feel poorer and are less likely to spend on discretionary retail.
I think bricks and mortar retailers will be fine. People will always want to shop - it's a social experience that you can't replicate by sitting in front of a computer screen and clicking a mouse. A housing crash may still impact spending but that's hard to predict and time correctly, if it even happens. So on balance, I'm still holding onto MYR.
MYR Price at posting:
51.0¢ Sentiment: Hold Disclosure: Held
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