With the current headlines about the supply chain crisis, it may seem iffy to invest in retail stocks right now. Or is it? This latest issue, a side effect of the post-pandemic economic recovery, is affecting individual companies within the sector in different ways.
Some retailers are well positioned to ride out this headwind. Others? Not so much. The takeaway? You may be able to find opportunities within the space, as investors have overestimated the level of impact. For instance, in a recent article, I highlighted several retailers, like Gap (NYSE:GPS) and Victoria’s Secret (NYSE:VSCO), where supply shock concerns may be overblown.
That said, there are plenty of names in this space that are clear cut “avoid” situations right now. Not just because of supply chain headwinds. Issues like inflationary pressures, a post-pandemic drop off in e-commerce and other issues independent of the supply chain crisis could tank their respective shares. Or worse, send them toward Chapter 11 bankruptcy.
So, among retail stocks, which ones should you not, under any circumstance, buy right now? These seven are facing a wide variety of challenges and could be at risk of seeing a big drop in price over the next 12 months:
- Blue Apron (NYSE:APRN)
- Casper Sleep (NYSE:CSPR)
- Express (NYSE:EXPR)
- Jumia Technologies (NYSE:JMIA)
- Joann (NASDAQ:JOAN)
- CarLotz (NASDAQ:LOTZ)
- Tuesday Morning (NASDAQ:TUEM)
On the date of publication, Thomas Niel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Thomas Niel, a contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.