Here’s why these retail shares have been CRUSHED today

It certainly hasn’t been a great day to own shares in many of Australia’s leading retail companies.

A number of retail shares have taken a dive today after leading investment bank Credit Suisse warned that the much-speculated launch of Amazon in Australia could be far worse for retailers than the market is currently predicting.

According to the research note, courtesy of The Australian, Credit Suisse believes that the disruptive effect that Amazon will have on business models and pricing are likely to be seen within five years of the retail behemoth launching on Australian shores.

The following four shares have been named as retailers likely to be negatively impacted. Here’s how their respective share prices reacted to the news:

  • The Harvey Norman Holdings Limited (ASX: HVN) share price is down 9% to $4.33.
  • The JB Hi-Fi Limited (ASX: JBH) share price is down 3.5% to $23.80.
  • The Myer Holdings Ltd (ASX: MYR) share price is down 3% to $1.10.
  • The Super Retail Group Ltd (ASX: SUL) share price is down 3.5% to $10.34.

Should investors be worried?

Whilst at this stage the launch of Amazon in Australia is purely speculation, if it does eventuate I would be concerned if these shares were in my portfolio.

Especially if I were a Myer shareholder. Although its turnaround has been quite impressive and taken me by surprise, it may not be much help if Amazon arrives on Australian soil.

Credit Suisse believes that Myer could lose up to 55% of its potential earnings before interest and tax by FY 2022 if the retail giant enters the market.

Whether or not a launch materialises, only time will tell. But in my opinion the prudent thing to do is to avoid the industry and focus on other areas of the market.

For example, these three hot growth shares could be far better options for investors in my opinion.

Top 3 ASX Blue Chips To Buy In 2017

For many, blue chip stocks means stability, profitability and regular dividends, often full franked..

But knowing which blue chips to buy, and when, can often be fraught with danger.

The Motley Fool's in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool's Top 3 Blue Chip Stocks for 2017."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

If you're expecting to see the likes of Commonwealth Bank, Telstra and Wesfarmers shares on this list, you'll be sorely disappointed. Not only are their dividends growing at a snail's pace, their profits are under pressure too due to the increasing competitive environment.

The contrast to these "new breed" blue chips couldn't be greater... especially the very real prospect of significant share price gains, something that's looking less likely from the usual blue chip suspects.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand - and how quickly the share prices of these companies moves - we may be forced to remove this report.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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