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CNBC PRO Talks

These stores will survive the destruction of the American mall, Morgan Stanley's retail guru says

Kimberly Greenberger, Morgan Stanley's retail guru, said the department store business model anchored in malls is fundamentally flawed in this online era, yet there is a group of brick-and-mortar retailers that can still thrive.

"If a retail store simply sells other people's brands that's a business model that's more at risk ... because Amazon and some of the other pure-play retailers can sell other people's brands potentially better," Greenberger told Mike Santoli in an exclusive interview for CNBC PRO.

But the off-price retailers should do well, she said.

"They really perform an inventory clearance function and most of the brands that need to clear inventory don't want to see that inventory show up online so there's a real need for these stores and they serve a real purpose and they also help the brands clear out their mistakes," she said, noting the firm has a buy rating on Ross Stores and Burlington Stores and an equal-weight rating on TJX because of this trend.

Greenberger is the No. 1-ranked retail analyst on Wall Street according to Institutional Investor and has been covering the industry for 17 years. She also discusses:

  • Why retail will never be 100 percent online.
  • Why retail stock valuations have been permanently reset lower.
  • What the effect will be of a Trump BAT tax.

The interview is exclusively for CNBC PRO subscribers.