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Expect JC Penney ‘Train Wreck’: Pro

JC Penney's competitors stand to see strong gains as retailers report quarterly earnings next week, Tom Stemberg of the Highland Consumer Fund said Friday.

Stemberg said that the retail sector in general was facing challenges.

"Certainly weather was a problem in the first quarter, but I think the problems transcend the weather," he said. "I think the fact of the matter is people are paying more for taxes. And as they have more money coming out of their pocketbook, it's got to come from somewhere, and retail spending is part of that."

On CNBC's "Fast Money," Stemberg said that high-end retail would see an uphill struggle.

"The great performers will work their way through this," he added. "I think JC Penney will be a train wreck."

Stemberg, who was formerly CEO of Staples, said that JC Penney's competitors would see increased market share.

"When you have somebody like JC Penney, who's basically handing over hundreds of millions of dollars of revenue, throwing it back in the marketplace, in the near-term their direct competitors like Kohl's and Macy's will probably pick up some disproportionate revenues," he said.

Other retailers that would benefit included Wal-Mart and Nordstrom, Stemberg added.

"Long-term, I think you've got to like people that are well-positioned."

Trader disclosure: On May 10, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Josh Brown is long AAPL; Josh Brown is long XLU; Josh Brown is long TLT; Dan Nathan is long SPY MAY 163/160 PUT SPREAD; Dan Nathan is long CSCO MAY 21 STRADDLE; Dan Nathan is short IWM; Steve Grasso is long ASTM; Steve Grasso is long BA; Steve Grasso is long BAC; Steve Grasso is long GDX; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long MJNA; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is funds long EMC; Steve Grasso is funds long MSFT; Steve Grasso is funds long OXY; Steve Grasso is funds long HPQ; Steve Grasso is funds long NEM; Steve Grasso is funds long ZNGA; Steve Grasso is funds long SPY; Steve Grasso is funds long CSCO; Enis Taner is long GS; Enis Taner is long AAPL CALLS FLY; Enis Taner is long JCP CALL SPREAD; Enis Taner is long UUP; Enis Taner is long FXE PUTS; Enis Taner is long VIX CALLS.

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