1. Sears Holding Corporation (SHLD)

Retail Segment: General Retail

Annual Revenue: $44 billion

Performance: YTD stock down more than 20%, October retail sales of the Sears unit down 8.2%.

Major Competitors / Reasons For Problems: The Sears division competes with two larger operations – Target ($65 billion in sales) a
nd Wal-Mart ($400 billion in sales). Wall Street has voted in favor of these two companies and their holiday prospects by pushing their share prices higher. Starting Black Friday, Target and Wal-Mart will ramp up their efforts with sharp discounts and tools like free shipping.

2. Hot Topic Inc. (HOTT)

Retail Segment: Mall specialty for teens, also operates Torrid stores, which caters to plus-sized teen girls.

Annual Revenue: $736 million

Performance: Stock down 10% YTD, October same-store sales down 8.5%.

Major Competitors / Reasons For Problems: Hot Topic will close 40-50 stores next year. The company is up against Abercrombie & Fitch, which has had a surge in sales recently and now leads the category. Its other major competitor – Urban Outfitters – is one of the hottest retailers in the country.

3. Kohl’s Corp. (KSS)

Retail Segment: General Department Store

Annual Revenue: $17.1 Billion

Performance: Stock performance is flat YTD, October Retail Sales down 1%

Major Competitors / Reasons for Problems: Kohl’s has done relatively well recently, and just posted good earnings. Kohl’s now faces tremendous competition, particularly from Target, which is much larger and can afford to offer large discounts. Target also has a better set of locations. The overall department store segment is crowded, with companies like Macy’s, Dillard’s and Nordstrom.

4. Aeropostale, Inc. (ARO)

Retail Segment: female teens

Annual Revenue: $2.2 billion

Performance: Shares have done relatively well this year, October same-store sales down 2%.

Major Competitors / Reasons for Problems: Another victim of Abercrombie & Fitch (ANF stock is up 35% YTD). The company is also caught between major retailers including The Gap and several niche store chains such as Pacific Sunware of California.

5. Big Lots Inc. (BIG)

Retail Segment: Broad-line closeout retailer

Annual Revenue: $4.7 billion

Performance: Stock flat YTD, quarterly same-store sales up 0.7%

Major Competitors / Reasons for Problems: Wal-Mart’s Sam’s Club and Costco are not closeout retailers. However, their models are based on selling a very large selection of food, clothing, beauty aids, furniture, bed and bath products, and consumer electronics at extremely low prices. Chief Executive Officer Steve Fishman says “our customers were very selective.” Based on their recent performance, it seems they were much too selective.