Wolf Ritcher of the popular economics and finance website Wolfstreet.com recently spoke with the X22 Report to discuss what Mr. Ritcher describes as the ‘brick and mortar retail meltdown.’ With Sears of Canada recently declaring bankruptcy and malls across the US under significant duress, Mr. Ritcher notes:

“I call it the brick and mortar retail meltdown, and that’s really what it is. I am not exaggerating…The brick and mortar retail is melting down and has been melting down for two years, and in the overall retail numbers we get this doesn’t show up that much because online retail is strong. So online retail has been growing, eCommerce has been growing at a rate of about 15% a year and that’s been pretty stable from around 14.5% to close to 16% every year. So that’s booming and one of the big gorillas there is Amazon, but a lot of other companies, even brick and mortar companies like Macy’s and Walmart, they are trying to carve out a big presence online because that’s the only way that they are going to survive.”

“So in brick and mortar retail we had another bankruptcy today. Sears of Canada threw in the towel, sought bankruptcy protection this morning. Sears Holdings in the United States still owns part of that and Eddie Lampert, the CEO of Sears Holdings, owns, his hedge fund owns, about 45% of Sears of Canada. That’s just one more step. Target of Canada also went bankrupt in 2015. Sear of Canada is trying to avoid liquidation right now. It is trying to restructure but retailers are notoriously difficult to restructure… All the good assets, the real-estate they had, which Sears Canada had quite a bit of real-estate, is sold off to survive, they borrow money to survive, and at some point when they can’t borrow any more money because they are bleeding so much cash and the lenders pull back, that is when they go bankrupt and there is nothing left really anymore… The assets just don’t cover the debts and stock holders get wiped out and some of the junior creditors will get wiped out. Some of the other creditors will get big haircuts and in the end usually retailers get liquidated and this has been going on in the United States. We have seen numerous retailers in the United Stated, brick and mortar retailers, go bankrupt this year… a bunch of them last year. Store closings, even retailers that are in decent shape, like Macy’s have been closing hundreds of stores. The mall REITs have gotten completely crushed, the publicly traded mall REITs. The biggest ones in the United States… their shares are down 40%, 50%, 30%, in that range, from a year ago. So the brick and mortar end of retail is in full fledged meltdown.”

That is just the start of the ~37 minute interview which goes on to discuss housing, the Federal Reserve, the broader economy and much more. We strongly encourage readers to enjoy the full interview below: