Author Topic: Inverting Amazon Who will survive  (Read 517 times)

Saluki

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Inverting Amazon Who will survive
« on: May 23, 2018, 06:56:41 PM »
I generally hate retail, but in thinking about what companies won't (can't?) be disrupted by Amazon, 2 jumped out at me: Lowes and Home Depot.

When I order drywall or pavers from Lowes or HD to be delivered, it comes from the local store less than 5 miles away.  You can't ship heavy bulk items like 80lb bags of cement that sell for $6 via a distribution facility in Kentucky. Things like paint also don't travel well by mail, and you (or more likely your wife) will go in with something that will be color matched at the counter and mixed on the spot.

Local distribution centers, specialized delivery trucks and large wholesale operations for contractors are a very difficult moat to breach. 

Maybe the retail apocalypse is good news for Lowes and HD because you can acquire and redevelop large boxes from places like Sears at attractive prices?


TwoCitiesCapital

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Re: Inverting Amazon Who will survive
« Reply #1 on: May 23, 2018, 07:55:52 PM »
Until recently, I was buying "brands".

Ralph Lauren
Under Armour
Nike
Louis Vuitton
Victoria's Secret
Tapestry (Coach, Kate Spade)
Etc

Amazon may disrupt their delivery mechanism, but not the desire for the products they create or the allure of the brand.

Only reason I stopped buying the basket was because many names had rallied 20-30% before I could get full positions. I only on LB (Victoria Secret) now given it's sharp correction, but will buy others on weakness again.

CorpRaider

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Re: Inverting Amazon Who will survive
« Reply #2 on: May 24, 2018, 03:31:45 AM »
Seems like the market agrees with your hypothesis on L and HD and it is reflected in their valuations. 
« Last Edit: May 24, 2018, 03:33:31 AM by CorpRaider »