One of the nation’s iconic retailers continues to experience difficult times and problems adapting to the needs of the modern customer, as Sears has announced yet another round of store closures.
In a bygone era, Sears was on the cutting edge of early American retail with its massive catalog that allowed customers in rural areas to make mail-order purchases for the same products that their urban contemporaries could despite their remote locations.
The corporation parlayed its role as a pioneer into an empire of stores that coincided with the rise of shopping malls. It later acquired big box discount store Kmart, which was in bankruptcy in 2004, hoping to compete with stores like Target and Walmart.
It was the height of Sears’ period of dominance, but just as the company had revolutionized retail with its catalog, so did the internet and the rise of Amazon in the new digital age.
This is the future as consumers enjoy quick shipping without the hassle of actually going to the mall, and dinosaurs like Sears are slowly shuffling off to the tar pits of history.
Sears has now announced that it will be closing over 100 combined stores in the latest round of downsizing.
Sears Holdings is closing 64 Kmart stores and 39 Sears stores between March and April, as the company tries 'to right size our store footprint' https://t.co/TFw3WtxNsk
— WSJ Business News (@WSJbusiness) January 5, 2018
Via the Wall Street Journal, “Sears to Close More Than 100 Stores in Latest Round of Cuts”:
Sears Holdings Corp. is closing more than 100 stores in the next few months, as it continues to reduce its footprint in the wake of a yearslong sales decline.
The 64 Kmart stores and 39 Sears stores will close between March and April, the company said Thursday. Liquidation sales will begin as early as Jan. 12.
The company said it told associates about the store closures on Thursday. Eligible associates affected will receive severance and will be able to apply for open positions at other Kmart and Sears stores.
Sears “will continue to right size our store footprint in number and size,” the company said in prepared remarks.
In November, the company revealed plans to close 63 stores by late January, including 45 Kmart and 18 Sears locations. The company operated roughly 1,100 stores at the end of its quarter ended in October.
Chief Financial Officer Rob Riecker said during an earnings call in November that a reduced footprint and specialized stores selling mattresses, appliances and car services will help the struggling retailer get back on track.
In even more bad news for Sears, which has seen its once mighty appliance sales challenged by big box stores the likes of Lowes, competitor J.C. Penney smells blood in the water and has brashly put Sears on notice that it is prepared to hit them where it hurts.
— MSN (@MSN) January 5, 2018
J.C. Penney CEO Marvin Ellison makes no bones about it: the retailer is going hard after fellow struggling department store chain Sears’ appliance sales.
Penney, which resumed selling large home appliances two years ago after three decades away from the category, saw comparable appliance sales rise 30% in the November and December holiday period, a significant contributor to Penney’s better-than-expected 3.4% holiday season sales growth, Ellison told Fortune in an interview on Thursday. What’s more, Penney will be ready whatever happens to Sears, a retailer that has closed hundreds of stores in recent years, and even recognized doubts about its longer-term viability in its annual report last year. Sears Holdings, which also operates Kmart, said on Thursday it was closing another 64 Kmart stores and 39 Sears stores, on top of many previous rounds of store shutterings in recent years.
In addition to appliances such as refrigerators and washing machines, Penney last year added showrooms for and mattresses at some 500 stores in its efforts to become less reliant on apparel, bolster its home goods category, and frankly, to capitalize on the years-long sales decline at Sears, once the leading seller of appliances in the United States.
Things are looking pretty grim for Sears. Not only are they getting creamed by Amazon, but they will now be engaged in a war of attrition with other legacy retail stores like Pennys. It is, however, a perfect example of how and why capitalism works.