CoreBrand reviewed the top 100 hardest working brands for the final quarter of 2009.  Their researchers point out that “the food industry moves to the top of the list, reflecting the economy and the general improvement of consumer staples businesses. Hershey’s (HSY), Campbell Soup (CPB), and Kellogg (K) make it into the top 5.” On the other hand “troubled industries like financial services and auto manufacturers have seen dramatic decline.”

Harley-Davidson (HOG) is in the top 10 among the hardest working brands. Before rumors of a buy-out, the motorcycle firm’s stock languished at $25, down from $42 less than two years ago. Harley’s stock trades for a low 1.2 times sales. Also near the top of the list is crippled book retailer Barnes & Noble (BKS), which trades for .3 times sales. Blockbuster (BBI) is in the top 25, with a ratio of .1x sales. The firm said in its 10-K that it is at risk for filing Chapter 11.

Douglas A. McIntyre  douglasamcintyre@247wallst.com

A new study by CoreBrand sets values on  the relationships between brand equity and market cap among large American companies and the research points to two conclusions. The first is that iconic brands are critical to the stock market value of the firms that own them. Hershey (NYSE:HSY) ranked first in the CoreBrands study followed by Coca-Cola (NYSE:KO) and Campbell Soup (NYSE:CPB) have spent billions of dollars to build brands which are universally recognized. The second is that weak companies with low market caps may find that their tattered brands make up an especially large part of their fallen share prices. This is probably because their companies are worth so little. Blockbuster (NYSE:BBI) and Harley-Davidson (NYSE:HOG) fall into this category.

The list:

The warehouse club says it will hire an outside firm, Shopper Events, to handle product demonstrations in the stores. Many of the people who will be fired are part-time workers.

Sam’s Club results have trailed those of the flagship Wal-Mart division. The parent company closed 10 Sam’s Club locations last week.

The news will lead to speculation that Wal-Mart same-store sales are flagging and that the company will miss expectations when it releases quarterly numbers, or that the firm’s forecast for future quarters will be weak. Wal-Mart is expected to post $1.12 EPS for its quarter ending this month. That is up from $1.03 for the same period last year. The harsh holiday retail season may have overwhelmed Wal-Mart’s chance to make those numbers. The layoffs at least show Wall St. that the retailer is aggressively managing costs.

The move will cause investors to fear that results from other large retailers like Sears (SHLD) and Costco (COST) will be below estimates. Unexpectedly weak sales would trigger another round of  layoffs. They may not be as large as they were a year ago, but could still be in the tens of thousands.

Whether there is a real increase in consumer demand for goods sold at retail stores has been in question since December sales numbers were lackluster. Wal-Mart’s layoffs are a sign that there was no sharp upturn retail, at last  as the year ended and that may continue well into the first half of this year.

Douglas A. McIntyre

Glassdoor recently completed a survey which creates what it calls its “CEO Watch List”. It is not surprising that among the firms with detested CEOs are operations that have a history of bad management, layoffs, and investor frustration. Many of the companies also get low marks from the Glassdor corporate rating system.

Dillard’s (NYSE:DDS) has had a history of same store sales declines and layoffs. CEO Bill Dillard II is disliked by his employees. So is Glenn Tilton of United (NASDAQ:UAUA) and Julian Day at Radio Shack (NYSE:RSH), another faltering retailer. In the same category, W. Bruce Johnson at Sears (NASDAQ: SHLD) is held in remarkably low esteem.

The top of the list is filled with companies that have had long successful runs as business and are often led by inspirational CEOs; Steve Jobs at Apple (NASDAQ:AAPL), Gary Kelly at Southwest (NYSE:LUV), and Eric Schmidt at Google (NASDAQ:GOOG). The biggest surprise at the top end of the highest rated CEO list is Lloyd Blankfein of Goldman Sachs (NYSE:GS). He does make his employees a lot of money.

The rest of the list:

Douglas A. McIntyre

Reuters:   Oil fell to $79 over concerns about the US economy.

Reuters:   Intel (NASDAQ:INTC) earnings beat expectations.

Reuters:   Citigroup (NYSE:C) bonuses were similar to 2008

Reuters:   The Google hack was based on using Microsoft (NASDAQ:MSFT) Internet Explorer.

Reuters:   Geithner says he was not involved in the AIG (NYSE:AIG) bailout.

WSJ:   US banks paid out $145 billion in bonuses for 2009, up sharply from the previous year.

WSJ:   Starwood made new accusations about Hilton using stolen data.

WSJ:   Sears (NASDAQ:SHLD) is making a big effort online to replace lost traffic to its aging stores.

WSJ:   Refining margins are squeezing oil company profits.

WSJ:   The break-up of Motorola (NYSE:MOT) has been put on hold.

WSJ:   The CFTC voted to curb some oil futures trading.

WSJ:   Holiday spending was up modestly from 2008.

WSJ:   The US opened an antitrust probe of Monsanto (NYSE:MON)

WSJ:   Kodak (NYSE:EK) sued Apple (NASDAQ:AAPL) and RIM (NASDAQ:RIMM) over patent violations.

WSJ:   Juniper (NASDAQ:JNPR) was hit by cyber attacks

WSJ:   Obama launched a proposal to tax banks by $90 billion.

WSJ:   Rio Tinto’s (NYSE:RTP) ore output topped forecasts.

WSJ:   Retail investors may not move back into stocks even if Q4 earnings are good.

NYT:   Google (NASDAQ:GGOG) has little at stake in terms of Chinese revenue.

NYT:   The FBI is looking into a number of cases of mortgage fraud.

NYT:   Bernanke defended the Fed’s oversight role.

FT:   Citigroup (NYSE:C) will cap cash bonuses.

FT:   The FDIC chief blamed the Fed for the crisis.

FT:   Inflation is a threat in China and India.

Bloomberg:   Hershey (NYSE:HSY) is accelerating its bid for Cadbury (NYSE:CBY).

Bloomberg:   Debt ratings are rising the fastest since 2007.

Douglas A. McIntyre

The interesting notion here is not one of a significant recovery.  The domestic comparable store sales reflect “reduced sales of higher ticket hardline items, partially offset by increases in the tools and automotive categories.”  Still ,the guidance is more than enough for holders to be pleased for the quarter to be $385 to $465 million or $3.36 to $4.06 EPS.  Thomson Reuters has a figure of only $2.65 EPS.  The favorable resolution of certain federal and state income tax matters helped its tax rate, which is expected to be 32%.

This is translating to a better-than-expected fiscal year (JAN-2010) as well with net income expected to be $190 to $270 million or $1.61 to $2.29 EPS.  Thomson Reuters had estimates only at $1.10 EPS.  Lampert also expects to end the fiscal year with about $1.7 billion in cash and it has cut its short-term borrowings in more than half.  On the continued buybacks, Lampert repurchased some 900,000 shares for $66 million at an implied average of $71.68 per share; the remaining buyback plan will allow for another $582 million remaining.

As with all retail and other operating companies, the numbers do not always have to get better and better.  Sometimes less-bad and less-bad is good enough.  If these numbers can improve, then the earnings power may increase further into the new fiscal year as well.  The obvious notion is that the company better keep generating higher earnings upside.  Unlocking the underlying value of the land under the stores and other assets might not be available for years.  Even if the rest of January allows Lampert to post better numbers and post as high as $2.50 in fiscal earnings, that would still leave Sears at 40-times earnings based on today’s higher share price.

Shares are up over 13%, and that takes Sears back above $100 for the first time since September-2008.  In April 2007, Sears traded as high as $195.00.

JON C. OGG

Customers, employees, shareholders, and taxpayers hate large corporations for many reasons. 24/7 Wall St. has looked at many of these issues to choose the 15 most hated companies in America. We evaluated each company based on five criteria.  First, employee impressions, using research firm Glassdoor and other services, were reviewed.  Second,  we considered total return to shareholders from these companies over one-year, two-year and five-year periods, compared to the broad market and other companies within the same sector. Several firms on our list are not public. Third, customer satisfaction numbers and reputation figures were analyzed from a broad array of sources, including Consumer Reports, JD Power, the MSN/Zogby poll, Vanno, and the University of Michigan American Customer Satisfaction Index were examined. Fourth, brand valuation changes were also reviewed based on data from Corebrands, Interbrand, and Brand Z.  Finally, the views of taxpayers, Congress and the Administration of these companies were considered where applicable.
24/7 Wall St. analyzed data on hundreds of companies to produce this final 15.

Unfortunately for some of the companies on this list, they are widely despised because of the businesses that they are in. An airline or franchise operation which deals with millions of customers, particularly when its resources are stretched due to the economy, is likely to make a lot of enemies among customers and workers. This puts airlines and firms with a large number of retail outlets at a disadvantage compared with companies with few customers, particularly if those customers are other large businesses. Airlines have also had to cut huge numbers of employees which affects both their relationships with workers and customers who may suffer from cuts in service.
Several companies which seem to belong on the on this list due to recent news, particularly Goldman Sachs (NYSE:GS) and AT&T (NYSE:T), are not there. Goldman was inundated by negative publicity because taxpayers and Congress are concerned that the bank’s pay packages are far too generous. But, Goldman has done a very good job for most of its customers. Its stock has nearly doubled over the past year. Goldman’s employees, particularly those who are rich because of their tenure at the firm, are great supporters of the bank.

AT&T has also been in the news a because of problems that its 3G customers, especially those who own Apple (NASDAQ:AAPL) iPhones, have had with the AT&T wireless service. But, AT&T has millions of other business and residential customers, a brand which continues to be a powerful marketing tool, and earnings which have kept most of its shareholders loyal.

Comcast (NASDAQ:CMCSA) was also considered for the list. Its customer satisfaction ratings are low. A number of its shareholders are upset over its deal to take control of NBC Universal. But, Comcast’s return to shareholders has been adequate, based on 24/7 measurements. Many companies could be added to this list if there were only one factor under evaluation, be it their relationship with employees, shareholders, or customers.

It is worth noting that two companies that might have been on a list of this kind five years ago, Microsoft (NASDAQ:MSFT) and Wal-Mart (NYSE:WMT) are not. Each company has, as far as the public, customers, and employees are concerned, improved its business practices, at least to the extent to which it affects the way that the companies are viewed based on the 24/7 Wall St criteria.

Here is the list in rank order starting with AIG, the most hated company in America:

1. AIG (NYSE:AIG) is the most hated company in America. Taxpayers despise the firm because it received nearly $180 billion in government aid. AIG has fired enough people and operates under such pressure to turn around its operations that employee morale is understandably low. The firm’s brand is worth so little that some of its divisions have aggressively begun to market themselves under names other than AIG. Vanno’s  company reputation index puts AIG as No. 5585 among the 6075 firms that it measures. AIG’s market cap lost over 99% of its value during the last two years, virtually wiping out the firm’s equity investors. CEO Robert Benmosche pressed for a rich pay package while his predecessor worked for $1.

2. United Airlines (NASDAQ:UAUA) has been one of the worst performing airline stocks over the last two years, down almost 60%. United ranked last along with US Air (NYSE:LCC) in the 2009 JD Power survey among traditional carriers as it posted poor results for “reservation experience”, “check-in experience”, and “costs and fees.” United also ranked last in a recent University of Michigan Ross School of Business consumer satisfaction survey. Research that 24/7 Wall St. examined revealed that employee work satisfaction was very low.

3. Level 3 (NASDAQ:LVLT) is one of the nation’s largest broadband networks, a roll-up of a number of smaller businesses. The execution of the business strategy was flawed and integration problems were severe. Level 3’s stock is down 50% over the last two years. The company has been plagued by customer complaints. Level 3 has fired a number of people over the last three years due management’s ability to quickly and successfully integrate its patch-work of businesses, and its inability to reduce the firm’s huge financial losses.

4. Hertz (NYSE:HTZ), the largest car rental company in the US, has had its share of financial problems.  This has resulted in massive layoffs. Hertz stock has performed about as well as the DJIA over the last two years. Some investors became concerned when Hertz was placed on the Audit Integrity list of American companies most likely to go bankrupt. Hertz filed a suit against the research company but subsequently dropped it. Like many of the largest airlines and other travel firms, Hertz suffers from being in a business in which it has to satisfy millions of customers during an economic downturn. Hertz makes the Glassdoor list of “worst companies to work for.” Hertz was also on the primary list in an investigative report into “Aggressive Sales Tactics on the Internet and Their Impact on American Consumers” which was produced for a hearing on the subject by the US Senate Committee on Commerce, Science, and Transportation. Vanno gives Hertz low rating for both customer and employee satisfaction

5. Citigroup’s (NYSE:C) relationship with its customers, shareholders, and investors was badly damaged by the decisions of its management, under the leadership of former CEO Sandy Weill, who cobbled together the ungainly financial supermarket through acqusitions.  Citigroup built a massive financial institution with divisions which took unimaginable risks. This corporate culture of risk taking nearly ruined the company. Citi rates at or near the bottom of the JD Power regional bank rankings. It is also near the bottom of the JD Power credit card satisfaction survey. Citi has been damaged by the impact of the overall reputation of credit card companies which has been hurt by the recession. Many credit card firms have begun to add new fees to offset government restrictions on rates further enraging customers. Citi is the second largest issuer of cards in America, with 92 million cards in circulation. The value of the company’s shares is off about 90% over the last two years. Citi’s CEO Vikram Pandit is not considered up to the job, and on his watch the bank has fired tens of thousands of people.

6. K-Mart is one of the two large retail units of Sears Holdings (NASDAQ:SHLD). Sears has worked on a turnaround since it merged with K-Mart in late 2004. Since the merger, the Sears stock is down about 10%. The American Customer Satisfaction Index for Sears Holdings stores was below all major discount and department stores except Wal-Mart during the last full year of the poll. K-Mart gets poor scores for employee satisfaction from Glassdoor and parent Sears does poorly on the employee satisfaction list from Vanno.

7. Blackwater Worldwide, the military contractor, is a special case because it does not show up on any major reputation surveys and it is a private company, although based on news stories is may be one of the better-known company names in America. Blackwater specializes in security and has been heavily involved in providing services for the US government in Iraq.  The company was founded by Erik Prince, a former Navy SEAL and heir to an automotive-part empire.  Blackwater was implicated in an event in which 17 Iraqi civilians were killed.  The Iraqi government revoked the company’s operating license following this.  While an American court recently cleared the company of any criminal activity, the Iraqi government has stated that it intends to file a lawsuit against Blackwater in both U.S. and Iraqi courts.  In an effort to distance itself from its negative public perception, the company recently changed its name to Xe Services LLC. Blackwater operates out of an area in North Carolina knows as the Great Dismal Swamp. The inclusion of the company on the list is the only example of an “editor’s choice”, not based on our normal criteria.

8. Dell (NASDAQ:DELL) has underperformed its peer group in the stock market by a wide margin. Dell’s shares are off over 30% over the last two years while the share of Hewlett-Packard (NYSE:HPQ) and IBM (NYSE:IBM) have shown impressive gains. The PC industry’s score has been steadily increasing in the American Customer Service Index over the last decade, up from a 71 of 100 rating in 2001 to 75. Dell’s score has dropped from 78 to 75. Dell trail Apple, Toshiba, and HP is many Consumer Reports measurements of laptop computers by screen size. It does somewhat better in the slow-growing desktop business and has abysmal scores in the fastest growing part of the PC industry—netbooks. In the netbook category Consumer Reports ranks Dell behind seven other manufacturers. In Forrester’s recent Customer Experience Index rankings, Dell was behind every other PC maker measured. Dell employees have been through a series of layoffs which included 8,800 people in 2008 and at least another 1,400 last year. Dell fired another group in November.

9. Abercrombie & Fitch (NYSE:ANF) The retailer has posted dismal results over the last two years, with its same-stores sales down by double digits most months. The company is the only retailer to make the 2009 MSN “Customer Service Hall of Shame” two years in a row and the only retailer in the top 10.  Employee reaction to the company and CEO as measured at Glassdoor is relatively poor. Employee and customer satisfaction are both low in the Vanno ratings. Abercrombie & Fitch shares are down over 50% during the last two years.

10. Chrysler is once again a private company, after the government shepherded it through Chapter 11. The car firm is managed by Fiat, which has taken an equity position in Chrysler but has put in no capital. Consumer Reports puts the Chrysler, Jeep, and Dodge brands at or near the bottom of its reliability ratings, suggesting that consumers who buy the company’s cars are disproportionately unhappy compared to other car buyers. Chrysler also does poorly in most JD Power research. Chrysler’s ongoing waves of lay-offs and employee buyouts have irreparably damaged its relationship with workers and with many of the communities where is has, or had, operations.

11. Dish Network (NYSE:DISH), the satellite TV company, has had a drop in its stock price of over 35% during the last two years.  The Wall Street Journal recently pointed out that the firm has lost customers to rival DirecTV (NYSE:DTV). Dish has had customer service issues that have undermined its efforts to keep clients. The firm did add subscribers in the most recent quarter. Dish’s reputation was hurt in the recent past by the problems that led it to pay $6 million in a settlement with 46 state attorneys general, resolving allegations that the satellite TV provider and its third-party retailers violated do-not-call rules and engaged in deceptive and unfair sales practices. Recent JD Power data puts Dish service ratings behind offerings from AT&T (NYSE:T) and Verizon (NYSE:VZ).

12. Rite Aid’s (NYSE:RAD) stock is down nearly 50% over the last five years and nearly 30% over the last two. The company’s purchase of Brooks and Eckerd stores was handled badly and Rite Aid sustained huge losses. Rite Aid has had repeated labor problems and has faced legal and political actions because the way it treated workers. These complaints may not have always be justified, but they have significantly undermined employee loyalty. Rite Aid’s reputation scores from both Glassdoor and Vanno are particularly low. The fact that Rite Aid has almost 5,000 store, tens of thousands of low-paid workers, and millions of customers serving a population that is likely to be unhappy with much of the healthcare system, makes it particularly difficult for the firm to improve its reputation.

13. Gibson Guitar is the lowest rated company on the Glassdoor list. Gibson is privately held. The firm is based in Nashville. Gibson got into financial trouble in the early 1980s and was rescued by a group of investors in 1986. Gibson had several layoffs that cut its workforce by about 20% by mid-2009. There have been a number of complaints about the quality of the company’s products recently. In November, it was revealed that Gibson was being investigated for violating the Lacey Act, a key piece of environmental law, for importing endangered species of rosewood from Madagascar. The alleged violation has gone over poorly with Gibson customers and may hurt sales.

14. Forever 21 is a clothing retailer. A large number of the items it sells are private label. Forever 21 has been attacked for its labor practices. A number of employees took legal action against the company and the dispute was only settled when these workers were given “back wages.” The use of fur in some of its garments has been attacked by PETA.  They have been accused of blatantly knocking off designs from designers including Anna Sui, Gwen Stefani, and Diane von Fürstenberg. The clothing company was criticized recently for its refund policies.

15. Sprint (NYSE:S) is a great example of the inability of strong management to fix a company that is in real trouble. JD Power rates Sprint at the lowest end of its surveys on wireless call quality, customer care, and wireless retail sales. Consumer Reports ranks Sprint third among the four firms it rates for overall cell phone service. MSN/ Zogby has Sprint among the top ten companies in its “Hall of Shame”.  Sprint also ranks at the bottom of the wireless industry in the American Customer Satisfaction Index. Sprint’s shares are down 70% during the last two years.  Moody’s downgraded Sprint’s debt in November, putting further financial pressure on the company.  Glassdoor reports that employees think well of CEO Dan Hesse but not as well of the company. Sprint has laid off so many people that employee hostility toward the company is not surprising.

Douglas A. McIntyre

The e-commerce satisfaction index ForeSee created has a maximum score of 100.

The results are especially troubling for Neiman Marcus which has posted 18 months of declining retail sales. It had a score in the ForeSee research of 73. Sears, which has struggled with a turnaround since buying K-Mart, had a relatively low score of 75.

Gas (NYSE:GPS), Overstock (NASDAQ:OSTK), Target (NYSE:TGT), Best Buy (NYSE:BBY), and SonyStyle (NYSE:SNE) posted numbers below the survey’s median number.

It would not surprise anyone that Amazon (NASDAQ:AMZN) finished first in the poll with at satisfaction rating of 87, or that Apple (NASDAQ:AAPL) and NetFlix (NASDAQ:NFLX) did well. The firm’s with the best reputations for taking care of customers seem to be keeping those reputations. The weak retailers, in the meantime, are not doing themselves any favors by fumbling their online operations.

Douglas A. McIntyre

The new comScore data about e-commerce is nearly useless, not because it was poorly collected, but because it is old. The information shows e-commerce activity in November and compares the figures to October. The trouble is that Christmas has now passed and online shopping habits are ancient history. There were large surges in visits to the e-commerce sites for Best Buy (NYSE:BBY), Sears (NASDAQ:SHLD), Wal-Mart (NYSE:WMT), and Toys “R” Us in November. That does not matter at all on December 28 when the information was released. It is already clear that Amazon (NASDAQ:AMZN) had the most holiday traffic in the online shopping world. A number of research firms determined that last week.

The comScore data about big e-commerce websites in November also does not show what people bought when they visited the sites, whether they came back again, or whether they liked or disliked the websites when they visited them. Merely saying that some people visited a given site during a specified period does not give much valuable information. This data is useless except as an idea for a headline. It might read “Best Buy Website Has 67% Increase In Visits During November.” All of those site visitors may have looked at the Best Buy home page, may not have liked what they saw, and then moved to Amazon.com.

The comScore data is the kind of information the press gets from many research organizations today. It is “topline” data that shows a summary of trends that are, usually, terribly complex and in need of interpretation by experts. It almost never turns out that way. Reporters and editors take a few sentences and declare some few pieces of data show an important trend. The information used to create the numbers used to create the headline may show something completely different. But, the media usually does not ask for that more detailed data or neglects to check with an expert about what the numbers mean.

The biggest headline of the day yesterday was that holiday spending rose 3.6%, according to data from a division of MasterCard. Somewhere among the footnotes was that there was one more shopping day this holiday season compared to last year. Information from the MasterCard poll is inadequate. It measures activity from its credit cards but estimates purchases made by cash or check. Those estimates may be off considerably. The National Retail Federation affirmed its estimate that retail sales would drop 1% for the season. It was the association’s way of saying the MasterCard data was wrong. A percentage point means a lot when the amount at stake is in the tens of billions of dollars.

The temptation to take a headline based on the most modest information and run it is probably as old as the press is. There is certainly no sign that this behavior will change anytime soon. It sells newspapers and brings eyeballs to news websites. This habit does not do the news consumer much good. He is left with an impression about some part of the world of business, or sports or entertainment that is barely true, and the press knows it. How else could website TMZ run a picture of JFK on a boat with naked women from fifty years ago, only to admit the next day that it was fake?

Douglas A. McIntyre

E-commerce made a sudden comeback and it took less than a week. The National Retail Federation reported that retail sales were flat for the four days that begin holiday shopping. Most retail executives said they did not expect any substantial improvement between Black Friday and the end of the year. “Cyber Monday” online sales, however, rose 19.6% according to online research company, Coremetrics. The pendulum has moved quickly back to the point where bricks-and-mortar stores are dying and all shopping will soon be done online. This was the original case on which the value of companies like Amazon.com was based.  Evidence for this premise comes from the retail sales trends of 2009, even if those trends are based only on a hundred hours of results.

Investors took the renaissance of e-commerce to heart and drove the shares of Amazon to an all-time high of $136.08, a story that was widely reported in the press. Amazon has a market value that is higher than Honda (NYSE:HMC) or Disney (NYSE:HMC). That may seem preposterous but it says a great deal about how Wall St. feels about the prospects of car and entertainment companies compared with a firm that makes the Kindle and sells almost every product known to man on its website. Amazon is changing the world now. Honda changed it a few decades ago.

The “death of store shopping” drums will begin to beat again in a few weeks, if they have not already begun to do so. Shares of Macy’s (NYSE:M) fell sharply as Amazon rose. The perception that traditional stores are like Blockbuster (NYSE:BBI) has a growing number of believers. The video rental chain used to dominate VCR and then DVD rentals and sales. Blockbuster’s delivery of DVDs was destroyed by the online models of NetFlix (NASDAQ:NFLX) and internet delivered video from products that include Apple (NASDAQ:AAPL) TV. Physical stores have high fixed costs. The clerks are even fairly expensive. The real estate rent can be financially back-breaking. E-commerce companies do not have those cost issues.

The champions of e-commerce dominance on the one hand and the analysts who believe that physical stores all have a future on the other are both wrong as radical views often are. The retail industry is breaking into two categories, one of “haves” and one of “have nots”. Wal-Mart (NYSE:WMT) may be the largest owner of physical stores in America. Almost all research shows that walmart.com is one of the top two or three online e-commerce sites. Target (NYSE:TGT), Sears (NYSE:SHLD), and Best Buy (NYSE:BBY) also do extremely well in terms of internet traffic. Nordstrom (NYSE:JWN) and other retail brands that do not have a powerful online presence are in real trouble that will likely affect them this year and will become more serious in the holiday seasons to come.

Large retailers that do not have terrific online brands which draw a large number of visitors and a significant amount of online revenue do face the Blockbuster conundrum. The e-commerce space is already crowded with giants like Amazon and Wal-Mart. The online shopping habits of most people are fixed, their cyber-brand loyalty established. It won’t be possible to get a seat near the head of the internet shopping table, even for a huge retailer like Nordstrom.

Internet revenue may be 11% or 12% of overall retail sales in the US this year. That number is growing again. The 2008 shopping season was an aberration. Bricks-and-mortar store closings will accelerate over the next few years, if that is true. An economic recovery may soften the blow a bit, but the trend is inexorable.

Nordstrom has already lost the retail war. It just doesn’t know that.

Douglas A. McIntyre