business news in context, analysis with attitude

CNBC reports that financial services provider BMO Capital Markets is telling its clients that “it estimates Amazon, with Whole Foods, could be interested in filling as many as 110 old Sears and Kmart stores, based on the surrounding demographics of those department stores and the fact that they don’t have another Whole Foods store already within a three-mile radius.”

The observation seems keyed to several facts - Sears has been closing lots of locations, Amazon-owned Whole Foods is in an expansionist mode, and Amazon itself is said to be planning the opening of a new, separate chain of supermarkets (format, size and locations yet to be revealed).

“Sears emerged from bankruptcy in February,” the story notes. “Although it has been closing stores for years, it arguably has held on to some of the best retail real estate in the country. As hundreds of its stores have gone dark over the years, the more unprofitable ones have been the first to go. But now, even some of the stronger locations are going back on the market.”

BMO analyst Brandon Cheatham writes that “there aren’t many developers that are building additional, ground up, retail space, so if Amazon, or others, is looking to grow somewhat rapidly this would be a quick and likely cheap(er) way to expand.”
KC's View:
I’m not buying this. Not yet.

Every time there is real estate available because some company is in trouble - if it isn’t Sears, it is Radio Shack, for example - analysts clamor to get ink from various media outlets with their “predictions” about Amazon buying the companies or the real estate.

I’m only mentioning it here - at the risk of falling into the analysts’ trap - because I want to urge caution. Amazon hasn’t bought more things that it has been rumored to be interested in buying a lot more than it has bought anything.

Anything is possible. But I tend to think that when Amazon makes a move, it will be a move we don’t see coming, not one predicted by pundits and analysts.

The boxing writer and novelist Katherine Dunn once said that “it is the punch that you don’t see coming that knocks you out.”

She added, by the way: “In the wider world, the reality we ignore or deny is the one that weakens our most impassioned efforts toward improvement.”