Nov 27 (Reuters) – To understand why the retail sector will
continue to be such an investment minefield consider just two
phrases: Black Friday and Cyber Monday.
The latter, the mock tradition of buying stuff online when
the boss isn’t watching on the Monday after Thanksgiving, is
emblematic of the forces challenging a retail industry much of
which was built for a U.S-centered cars, parking lots and box
store paradigm which makes less and less sense every day.
Black Friday began to be so called in the 1980s because it
marks the kick-off of the holiday shopping season during which
retailers are thought to move from the red ink of annual loss
into the black of profit.
That such an insider term, the kind of language favored by
analysts and investors, came into general use says a lot about
the age of consumption and speculation which began in the 1980s.
After all why should a shopper, other than one who thinks we can
all get rich by buying things and investing in stocks, care
about when a store moves to profitability?
But underlying the term Black Friday is a business model
reality, which, once examined, poses real problems, especially
given the impact of the Internet. Physical stores are not simply
a combination of assets, labor and merchandise, they are
systems, ones with a lot of sunk costs.