Posted on 05/31/2018 2:19:02 PM PDT by Red Badger
Sears has identified another 100 unprofitable stores. It will begin closing sales at 72 of these stores "in the near future." The retailer said it continues to evaluate its store fleet and will make further adjustments "as needed and as warranted."
Sears Holdings said Thursday it will be closing more than 70 additional stores in 2018 as its sales continue to erode, dropping more than 30 percent in the latest quarter from a year ago.
The retailer has identified 100 unprofitable stores in total, and it will begin closing sales at 72 of these stores "in the near future."
"We continue to evaluate our network of stores, which are a critical component in our transformation, and will make further adjustments as needed and as warranted," Sears said in a statement announcing its fiscal first-quarter results.
The department store chain has been caught in a vicious cycle — shuttering weak stores to reduce costs. But even as it closes more stores, sales fall further. In the latest period, Sears said roughly two-thirds of its sales decline was tied to store closures.
The company named 63 locations it plans to close; they are mapped here. Sears will list the additional nine locations in a forthcoming update.
Sears and Kmart operated 894 stores at the end of the first quarter, 381 fewer than it did a year ago. Most recently in January, the embattled company announced the shuttering of 64 Kmart stores and 39 Sears stores, adding to the hundreds of closures that have taken place over the past few years. Some locations are currently being auctioned off online.
CEO Eddie Lampert told CNBC in a recent interview: "We're not liquidating just to liquidate. We're liquidating ... to get capital to put into our pension plan. As opposed to erring on the side of, 'This store might work.' ... If it's not working, we've invested the time, so we've got to close it because we are now jeopardizing this [store] over here."
But still, the losses are mounting. In the first quarter, Sears reported it had a loss of $424 million, or $3.93 per share. Revenue fell more than 30 percent to $2.89 billion from $4.2 billion a year ago.
Same-store sales, a key metric used to monitor a retailer's health, were down 11.9 percent overall. This consisted of a 9.5 percent drop at Kmart stores and a 13.4 percent decline at Sears stores.
Sears' dire financial state has many industry experts thinking the company is on the brink of filing for bankruptcy.
Sears ended the first quarter with $466 million in its cash reserves, compared with $336 million in the prior period.
The retailer burned through $1.8 billion in cash in its operations during 2017, $1.4 billion during 2016 and $2.2 billion during 2015, company filings show. It ended last year with $336 million in its cash reserves, compared with $286 million the previous year, a slight uptick thanks to asset sales.
Sears had roughly $4.3 billion in funded debt as of Feb. 3, 2018, along with unfunded pension and retirement obligations of about $1.6 billion.
In addition to shedding its real estate, Sears currently has an independent committee evaluating a deal where the company would sell some of its other assets, including the Kenmore brand, to Lampert's hedge fund, ESL Investments. Earlier this week, ESL said it received "numerous inquiries from potential partners" that are interested in getting involved in such a transaction.
Lampert noted, as it relates to any future transactions, "speed and certainty ... are critical." Heading into the second half of the year, Sears must now gear up for the 2018 holiday season.
Read: It was once the biggest retailer in the US. 125 years later, Sears looks a lot different
CLARIFICATION: Sears has provided locations for 63 of the newly planned closures. It will give addresses for the other nine in a forthcoming update.
Apparently Lowes, also.
I've noticed a bunch of new displays in my local Lowes for tool boxes, cabinets, roll-arounds and tool sets.
I miss Craftsman’s lifetime replacement policy. I broke a
$15 craftsman steel tape measure twice a year for 15 years and got a free replacement each time.
Not at all the Sears story. The Brenn and Brothers ran Monky Wards and Sears into the ground in the 80s.(The same boys who drove the GOP into the ground post Reagan as they controlled all RNC money.) They nutured a hierarchical structure of many dozens of layers of bureaucracy. The mid-level bureaucracy of men in their 40s and 50s and 60s were paid based on how inefficient they were.
The bigger their staff in Sears Tower, and then Hoffman Estates, the more important they were and the bigger their salary and perks. The stock holders finally got rid of Brennan and brought in Martinez.
Martinez brought in good people at the top. They had good ideas. But the Asst VPs, Directos, Managers.. 50+ levels of bureaucracy in Hoffman Estates actively and blatantly obstructed everything that the Matinez team tried to do.
The middle management also blocked every good idea from the bottom. I was on various IT teams as a consultant. My IT team lead had extremely good ideas on how to implement The Softer Side of Sears . His ideas involved checking what was selling in real time with my online programs. Lee, Levi and other suppliers were begging us to re-order in real time. In the back to school season, Sears most profitable season, we had no clue what styles would be hot... and if hot would vary by store location.
Online tracking of sales and re-order in real time was so obvious. But to do so would eliminate the entire buyer department of hundreds of self-important lazy buffoons and their managers.
Middle management insisted that they would run inventory re-plenishment off the quarterly report, meaning Back-to-school replenishment would be ordered about October 15, way too late to compete with Walmart and others.
A sister team to mine had a great plan on how to turn the Sears Catalog into an online catalog. It was a vision ... an Amazon. But Middle Management shot it down. All they saw were character based 3270s. They did not understand how people could shop on a computer because a compute had no pictures of the item like a catalog did. That is how much in the 1950s middle management was living in the 1990s.
Sears and IBM partnered to buy Prodigy and to create the first Cloud. Neither Sears nor IBM management had a clue what to do with what they bought. Middle management of both companies shot down every good idea, most of which came from the bottom in this case.
Lands End bought Sears and had good ideas. Sears middle management refused to implement them. Lampert bought Sears and Kmart for the real estate, not the retail business. Sears was one of the largest owners of real estate in the world.
Sears was not done in by some young MBA. It was done in by the Sears Swamp, the Sears establishment of middle aged and older men who wanted to protect their bureaucracy because their bureaucracy protected them.
Ever wonder how elected criminals have been robbing the American Citizen blind, at the local, state and federal levels with taxes, fees and dozens of other creative costs?
Just do a comparison of what would be the current cost of a prefab home from 1910 if the only profit accrued to the producer vs feeding the taxing sharks elected criminals and their bureaucracies...
Didn’t know that. They used to have really good quality tools you could count on. But, I guess everything’s being made as cheaply as possible now for teh moar moneys.
Interesting. Thanks for the insight.
Doesn’t bode well for the current swamp draining...
Eddie, soon you will run out of stores to close to fund your pension plan. Then you can shutter the doors at HQ and call it a day. At that point, the pensioners will be screwed anyway. You are just postponing the inevitable. I think you need to devise a better business strategy than shrinking your way to viability.
” I have to go to Sears every few years to get filters for my shop vac. Beyond that I don’t care.”
Ace now carries quite a bit of craftsman things: out local Ace hardware has the Sears brand filters for my Craftsman shopvac ... same price as at sears too ... much closer and MUCH better help than at an actual Sears, which seem to be mostly staffed by zombies (except for their large appliance section).
sad
Saw Craftsman tools for sale at Lowe’s the other day.
I looked it up, Black & Decker now owns the Craftsman brand................
Yep, B&D now owns Craftsman.
Craftsman is sold at my local Ace Hardware as well.
Now That B&D owns it, you will probably see them at all retail outlets.
Will they honor the ‘lifetime’ guarantee?
As for Kobalt, I have bought a few of the tools, they’re ok, but like you said, I never warmed up to them...............
Kobalt was just a ‘brand’ name:
https://en.wikipedia.org/wiki/Kobalt_(tools)
As is Craftsman:
https://en.wikipedia.org/wiki/Craftsman_(tools)
My local Ace Hardware sells Craftsman tools, our Lowes still sells Kobalt, their house brand.
As their stocks are depleted I guess they will replace it with Craftsman...................
Apparently Stanley Black & Decker now owns them Craftsman tool brand....................
Now you can buy Craftsman at four places:
Sears (for a while), K-Mart (same), Lowes and Ace Hardware.
I would assume that WalMart will be selling them at some point......................
“About the only Kmart that I can think of is on Lake Street.”
I think that might be the last one left in the Twin Cities. Once in a while, I go there. Let’s put it this way - white people like me are definitely in the minority in that store.
But as K-Mart stores go, the Lake Street location might be one of their few remaining profitable ones. There’s always a steady stream of people going in and out.
Others have commented here that Craftsman quality has gone downhill over the years. Sorry to hear that. Maybe things will change.
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