AMZN Stock Likely to Gain from New Strategy
Amazon.com, Inc. (NASDAQ:AMZN) has been making news since its great showing at the CES 2017 conference+. And now another piece of news comes that indicates the high ambitions of the company. Amazon’s master strategy may bridge the gap with Donald Trump and make Amazon stock soar again.
According to Reuters, Amazon.com, Inc. and Forever 21, Inc are among the companies weighing offers to acquire the bankrupt American Apparel Inc (OTCMKTS:APPCQ). Other players are also in talks with American Apparel and its financial advisers about submitting offers ahead of a deadline on Friday. (Source: “Exclusive: Amazon, Forever 21 vying for bankrupt American Apparel – sources,” Reuters, January 5, 2017.)
Los Angeles-based American Apparel has a major clothing manufacturing plant in California, which is one of the most expensive American states in terms of labor costs.
Amazon-American Apparel Deal
Amazon’s formal entry into the clothing industry is likely to boost AMZN stock. Amazon’s acquisition of American Apparel would be a major push for the e-commerce company into branded fashion and apparel. The Amazon-American Apparel deal solves the problem that Donald Trump has vowed to address as U.S. president. This would help keep manufacturing jobs in the U.S., and American Apparel is well known for its “Made in the USA” slogan.
Amazon could be the name to reckon with in the fashion business. Just a few days back, Recode reported that the e-commerce giant plans to develop its own line of workout apparel as it strengthens its efforts in the private-label clothing business and gets set to compete with the likes of Nike Inc (NYSE:NKE) and Under Armour Inc (NYSE:UA). During 2016, the online retailer introduced at least eight of its own clothing brands, including “Society New York.” (Source: “Amazon plans to sell its own line of workout clothes,” Recode, January 4, 2017.)
With the Amazon-American Apparel deal, the Amazon might be on its way to pose a serious threat to other players. It looks like it could be the year of investments for Amazon, as it also tries to expand its brick-and-mortar presence by opening new stores, as well as build its own logistics business.
Amazon Alexa Is a Big Hit in Holiday Sales
The company’s holiday sales were upbeat and, at a time when traditional retailers are closing down their stores, Amazon is planning to add to its physical presence. Amazon stock was up more than three percent on Thursday when Macy’s Inc (NYSE:M) plunged about 14% and Kohl’s Corporation (NYSE:KSS) fell 19%.
With its soaring ambitions and growth, Amazon stock could be one of the best stocks to watch out for in 2017. The company has access to a huge amount of data on customers’ buying habits, which puts it way ahead of its rivals.
At CES 2017, “Amazon Alexa” grabbed headlines as a number of home electronics makers announced that they have added Alexa to their products, including TVs and refrigerators. Amazon stock has its eyes set on dominating the home-automation market.
Amazon released a statement in December 2016 stating that the 2016 holiday was the best-ever season for Amazon stock, with devices including the “Echo Dot,” the “Amazon Fire TV Stick,” the “Amazon Fire Tablet” and the “Amazon Echo” topping the best-sellers list. (Source: “Alexa Devices Top Amazon Best-Seller List this Holiday – Millions of Alexa Devices Sold Worldwide,” Amazon.com, Inc., December 27, 2016.)
Amazon Stock and Donald Trump
Jeff Bezos was invited to President-elect Donald Trump’s tech meet, together with other technology giants, and Bezos described that meeting as “very productive.” The Amazon-American Apparel deal has the potential to build a bridge between Jeff Bezos and Donald Trump. If this happens, Amazon stock could scale new heights in 2017.