Sears Holding Corp. (SHLD) is on the brink of disaster.
As a result, there is major risk -- to companies with exposure to the once iconic retailer. if Sears goes out of business -- potentially likely within the next three years -- it will make global headlines and there will be major moves of exposed companies.
Loser: Appliance Makers
Instant losers if Sears goes under will include Whirlpool (WHR) and Samsung. Not only will each lose a major distribution channel, but will have to endure months of their brand being cheapened due to close-out sales.
Loser: Clothing Manufacturers
Step right up and pick your loser. Carter's ( CRI) (baby clothes), Skechers ( SKX)
and Wolverine Worldwide (work boots) are some of the most exposed clothing retailers to Sears.
Loser: Lands' End
One of the biggest losers from a potential Sears demise. Lands' End had 219 shops in Sears as of the third quarter ended Oct. 28. Those shops collectively had a brutal three months. Sales in the company's retail segment, which mostly comprises its Sears shops and its own retail stores, plunged 15.2% from the prior year to to $39.3 million. The Sears business now makes up about 14% of Lands' End's overall sales. All of that will vanish.
Loser: Electronics Industry
Using the fallout from Circuit City's bankruptcy as an example, Sears going under could really depress prices for Microsoft ( MSFT) computers, tech accessories more broadly and large-screen TVs from a Samsung. As a result, this not only presents risk to the manufacturers but also to Best Buy ( BBY) -- it may lose business as people shop for closeout deals at Sears
Loser: Fitness Equipment Sellers
Sears claims it's the largest fitness equipment seller in the United States (nothing to be proud of, as people are spending more to exercise in boutique classes and in discount gyms such as Planet Fitness ( PLNT) ). When Sears goes bust, it could weigh on D--k's Sporting Goods ( DKS) exercise business for several quarters. To D--k's credit, in recent years it has reduced its floor space dedicated to exercise equipment.
Loser: Outdoor Furniture, Lawn Equipment Sellers
Discounting both at Sears and Kmart on outdoor patio equipment could hurt Home Depot ( HD) and Lowe's ( LOW) in the near term. The same logic applies to the tool business and lawnmowers.
Loser: Dollar Stores
Should Kmart go under, it may be a short-term disruption to the dollar stores such as Dollar Tree ( DLTR) and grocery stores. Low-income families will try to buy closeout deals on food and other staples at Kmart
Loser: Toy Makers
Hasbro ( HAS) , Mattel ( MAT) and Jakks Pacific ( JAKK) (more so Jakks) will be losers if Kmart vanishes. As a result of the liquidation sales, Toys R' Us -- which in its own right continues to battle the shift to online shopping -- could be harmed.