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Refinery29
Could shopping mall brands be Reddit’s next market target?
Signage outside a Chico’s FAS Inc. store in Fort Myers, Florida, United States, Monday, March 3, 2020. For the third quarter, total sales increased 14.8% from the thirteen weeks ended on August 1, 2020, thanks to strong digital performance and rebound in store revenues. Photographer: Eve Edelheit / Bloomberg via Getty Images As of Friday, editors of the r / WallStreetBets subreddit began targeting Wall Street short sellers – market makers and hedge funds who bet on the drop in the price of an action. It all started with GameStop, the go-to store for College GameCube games. Now that gamers are flocking to online stores and thousands of GameStop stores have closed, hedge funds were certain the retailer’s inventory would continue to decline. Hence, they bet tons of money to make a profit. For those of you unfamiliar with short selling, according to Whizy Kim, writer of Refinery29 Work & Money, it works like this: “Step one, borrowing stocks from someone else. Step two, sell them right away. Step three, wait for the stock price to drop and buy the same number of stocks you borrowed. Fourth step, return the borrowed shares and profit from the price difference. So when the editors decided to pour their money into GameStop, thereby raising the company’s stock price from $ 18.84 on New Years Eve to over $ 250 at the time of writing, all the hedge funds involved were forced to sell their shares at a loss. GameStock’s valuation has skyrocketed – its value topped $ 10 billion on Tuesday. Quick update on today’s trading: Express Inc: + 245% AMC Theaters: + 230% Blockbuster Video: + 181% GameStop: + 125% Nokia: + 50% Build-A-Bear: + 45% BlackBerry: + 24% Bed Bath & Beyond: + 23% Tootsie Roll: + 14% – Jon Erlichman (@JonErlichman) January 27, 2021 The same goes for other forgotten brands of the 2000s like Build-A- Bear, Blockbuster, and BlackBerry, which have been stored deep in our brains, to be brought up in conversations about childhood birthdays and Brick Breaker. Fashion may also have been hit. According to a tweet from Bloomberg presenter Jon Erlichman, the Express clothing store’s stock jumped 245% yesterday. Despite Wedbush analyst Jennifer Redding telling Bloomberg that the Ohio-based retailer was “hemorrhaging cash” due to the pandemic, more than 350 million Express shares were traded on Monday. – a record for the clothing chain – and their shares almost doubled. According to Business of Fashion, Express isn’t the only fashion brand to be on Reddit’s radar. The post speculates that WallStreetBets’ next conquest could be parent brands. Analysts who spoke to BOF shared that the same small WallStreetBets investors who bought shares in GameStop, Blockbuster, etc., are now preparing to do the same with shares of mall brands like J. Jill and Chico’s. , especially since restrictions have been put in place. place to slow down the trading of GameStop and AMC stocks. Despite the surge in demand for beige square buttonholes layered over trendy turtlenecks and wide cuffed pants – comfy, neutral clothes that appealed to moms of the 90s and 2000s, stores that were known to them were in. difficulty over the years. The pandemic has made the situation worse. According to WWD, the parent company of retailers like Chico’s, White House Black Market and Soma, lost $ 178 million during the first wave of the pandemic; in December, Retail Dive reported that J. Jill was left at a loss of $ 24.1 million, with sales down 30% in the third quarter. According to Susan Anderson, a B. Riley Securities analyst who was quoted in BOF, because some fashion retailers have such a low market capitalization, which means it is cheaper to infiltrate their stocks, they are targets perfect for the next Reddit series: will we tear down Wall Street with the next one? Of course, even if WallStreetBets members crowd into J. Jill and Chico’s action, thus increasing price and value, it doesn’t necessarily mean that either will survive in the long run. As we’ve learned from J.Crews and Lord & Taylors around the world, the mainstays of shopping malls failed to capture the interests of savvy internet consumers, even before the pandemic. And despite the fact that Diane Keaton-in-Something’s Gotta Give aesthetic is all the rage – as the clogs and puffy shirts that have the right trend show – from where we sit, it doesn’t look like them. brands that have flaunted them in the past will be invited to shop around. Refinery29 reached out to Express for comment but had not yet received a response at the time of posting. Like what you see? How about more R29 goodness, here? Why everyone is talking about GameStop actions
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