In light of weak December retail sales, while the economy remains relatively stagnant and US consumers are squeezed by rising gas prices, should we prepare for a coming retail implosion by the time the 2012 holiday season arrives? For several reasons, I believe an upcoming retail implosion may very well be on the horizon.
When considering the prospect of a retail implosion in the 2012 US economy, a trader is bound to think of Sears Holdings Corporation. Though Sears Holdings has risen 15 percent in the past week, over the past three months Sears Holdings has fallen over 50 percent. This situation does not bode well for the retail sector going forward.
In the aftermath of the holiday season, as Kmart and Sears have struggled, traders can find even more disappointment from Kohl’s Corporation. Kohl’s has fallen nearly seven percent in the past month at a time when perhaps some were looking to the retail sector for economic salvation. Though Mad Money’s Jim Cramer spoke well of Kohl’s in November 2011 and continues to display Kohl’s shirts and Kohl’s socks on the CNBC show, Kohl’s fate in the wake of the holiday season seems to be quite a disappointment. For such a retailer that appeals to middle-class consumers to fall as such is quite ominous.
