The 1 Number That Plagues Groupon (GRPN)

The 1 Number That Plagues Groupon

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Winter is already blowing cold for retailers. Just this week, J.C. Penney (NYSE: JCP ) reported a 26% decline in same-store sales as Kohl's (NYSE: KSS ) warned that steep discounting could take a big bite out of Q4 results. Yet neither fared so poorly as Groupon (Nasdaq: GRPN ) , which fell 29% after reporting a meager 3% gain in European sales during the third quarter. Troubling? Sure, but declining cash flow is far more worrisome. Find out why in the following video.

We've known about the structural weaknesses in Groupon's model for a while now, but it doesn't help that retail is a tough business stuck in the middle of a paradigm shift so massive that it draws parallels to the dawn of mail order last century. Only those most forward-looking and capable companies will survive, and they'll handsomely reward those investors who understand the landscape. You can read about the "3 Companies Ready to Rule Retail" in a new special report. Uncovering these top picks is free today; just click here to read more.

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Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He didn't own shares in any of the companies mentioned in tjis article the time of publication. Check out Tim's Web home, portfolio holdings, and Foolish writings, or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

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