The news has everyone thinking about who might be next on the buy list of Amazon CEO Jeff Bezos. It appears Amazon is looking to pick up in areas where it hasn’t been able to make headway online … yet.
“This significantly expands [Amazon’s] store presence overnight,” Maxim Group managing director Tom Forte told CNBC in an interview. “Whole Foods is a big idea. … It’s a big idea at scale.”
A $13.7 billion Amazon takeover deal is more than 15 times the value of the e-commerce giant’s acquisition of Zappos in 2009, according to FactSet.
“All the naysayers saying retail is dead â€” physical retail is dead â€” it’s not,” Forte said.
Everlane, Warby Parker and Lululemon could all be next, the analyst said. So far there are no reports or indication that Amazon is interested in the companies.
“You can’t paint a broad brush and say apparel is important for Amazon, so they’re going to buy Gap,” Forte explained. But a Warby Parker or Lululemon deal starts to make sense for Bezos and his team because it checks boxes like apparel, physical stores, being a lifestyle category â€” all things that Amazon wants to accomplish in a takeover now, Forte said.
Lululemon, for example, is not “massively over-stored” like some of its peers, and it could get Amazon into the activewear category â€” something that’s been especially popular with younger shoppers of late, he said.
Additionally, Amazon hasn’t been particularly known for its apparel business, though it’s tried to make a name for itself there, so an apparel play could make sense for the company down the road, Forte said.
Another example of a growing retailer, Warby Parker is a traditionally digital player beginning to expand its brick-and-mortar footprint, becoming a leading seller of eyeglasses and sunglasses after it found its footing on the internet.
Everlane is an apparel retailer that’s also built an impressive audience online and has been called by many the “next J.Crew,” as J.Crew struggles to bring shoppers to its stores in an age where off-price retailers, like TJX and Burlington, have won more market share.
BJ’s Wholesale Club is another potential takeover target that could get Amazon into selling gas.
The New York Post reported earlier this year that Bezos had looked into approaching the warehouse retailer. At the time, Amazon had showed “modest internal interest” in the chain, sources told The Post.
Today’s news is the perfect example of Amazon having enough cash to “cherry pick” its real estate, Forte said, and there could be many more deals to come.
“Players in the middle ground are at a real risk right now from incremental pressure,” the Maxim Group analyst told CNBC.
It’s why many grocery and retail stocks were getting killed on Friday’s news. There’s no telling what’s next for Amazon.