Posted on 03/22/2017 6:47:54 AM PDT by Red Badger
After years of huge losses and store closings, the future is officially in doubt for Sears and Kmart.
Sears Holdings, the holding company for the two iconic retail brands, warned investors late Tuesday that it can’t promise it will stay in business.
It included the language in its annual report while insisting it might still turn things around.
“Our historical operating results indicate substantial doubt exists related to the company’s ability to continue as a going concern,” said the statement.
Sears Holdings said it can’t be sure it can raise the cash it needs through loans and debt financing. The company owes $4.2 billion, up from about $3 billion a year ago.
The company lost $2.2 billion in the fiscal year ending in January and has not turned an annual profit since 2010. Its losses since then total $10.4 billion.
Sears Holdings said its ability to sell assets, such as stores and store leases, could be limited because it needs those assets to pay for pension plans. In January, Sears sold its Craftsman brand of tools to Stanley Black & Decker. It is looking to sell Kenmore appliances and Diehard auto parts.
Sears Holdings has been in trouble almost since the 2005 merger that joined the two department store brands.
At the start of 2006, it had 3,400 U.S. stores and 370 more in Canada that it has since sold. By the end of this January, it had only 1,400 stores left, all in the United States. The company still has 140,000 employees, but that too is down sharply from the 355,000 it had in 2006.
Even that doesn’t tell the full picture of the decline.
Sears was once the nation’s largest retailer and business employer, both the Walmart and Amazon of its time. Its groundbreaking catalog business was how many Americans learned to shop from home for a large variety of items they wanted.
And it developed an extensive store network that helped furnish homes as Americans moved to the suburbs after World War II. It also caused trouble for small, locally owned shops.
The company at one time grew to include not just the retail business but a bank, a brokerage, a real estate company and what was then the world’s tallest building, the Sears Tower, for its Chicago headquarters.
But Sears began to suffer from competition from low-price competitors such as Walmart, and big-box stores such as Home Depot. It lost its place in the Dow Jones index of the nation’s most important companies in 1999.
Then came growing competition from Amazon and other online retailers. Analysts said Sears Holdings did little to invest in either the Sears or Kmart brand, instead trying to cut its way back to profitability by trimming advertising and closing stores.
It announced plans to close 150 more stores in January, and its stock hit a post-merger low in February. Then the stock rebounded when the company announced a deal with creditors to borrow $140 million more and cut at least $1 billion in operating costs a year, along with reducing its debt and pension obligations by $1.5 billion.
The “going concern” warning sent shares down 5% in pre-market trading Wednesday.
Soul of the south, yours is an interesting post. I agree with much of it. I note further that Fed policy for sometime has aligned itself with so-called “investors” at the detriment of “Main Street” America. Obama is the latest example, but there are earlier actors, too, including many from the GOP. It is ironic, that we in “Flyover Country” have had to place our last hopes in a billionaire from the East Coast. May God bless DJT and watch over us all.
Sears and the railroad helped usher on the end of the independent general store. They were too big and unwieldy to outmaneuver Amazon and the internet.
I was in a Sears about a month ago, it was not pretty. The hardware section has dried up, and the clothing sections were very spartan, selection was extremely limited. Housewares was about all that looked well stocked, and I thought to myself at the time that Sears doesn’t have much longer to go, and Sears knew it.
In the same mall, the JC Pennys had made a clear effort to modernize. Whatever problems they face, they are at least trying.
Our very first lawnmower, an electric, came from Monkey Ward. We bought it in 1976 and it lasted into the 1990’s. Like yours, the wheel mount broke off the deck. By then, the Feds had gotten involved in the “safety” of electric mowers, and all their requirements just ruined them.
I’ve had serious doubts about Sears for decades. Starting in the 80’s, Sears has made a lot of strategic mistakes. However, they are also emblematic of general American industrial decline, at least to me. When I was a boy my grandfather’s company made clothing for Sears. It was well-made in small town non-union factories right here in the USA, mostly in the South. Those factories have long been mothballed and most of those towns are dying.
One particular factory that made shoes now sits graffiti-laden and heavily vandalized. It once provided 200 solid jobs in a small town of 2,000 people. In the decades since it closed, nothing has come along to replace those jobs except for meth, McDonald’s, and a Wal-Mart fifteen miles away. Year by year, the town, once picturesque and proud, slips further into oblivion. I’m glad I can remember a time when America was good and great.
Kenmore was Whirlpool, but Sears put the label on South Korean appliances starting about 2008. And these appliances weren’t up to American standards. So Kenmore is no longer worth anything unless Sears sells the brand name to someone who will take the time to rebuild the brand from scratch.
Sounds like where I grew up. Your description of that town is mine as well.....................
http://jezebel.com/sears-and-kmart-are-ridding-themselves-of-ivanka-trump-1792275839
A bad business move amidst a long history of bad business moves.
The Sears association with Craftsman and Kenmore was a symbiotic relationship between a good manufacturer and a good distributor, which is really what Sears was.
But not any more.
I've gotten excellent quality from Cabelas and Lands End.
Bought a bunch of turtle necks from Lands End this winter. Caught them on sale. They even have them in extended sizes, which is what I need. Regular sizes are normally $25, I believe. Extended are $34.50. I bought them on sale for $13.
Good material. Good stitching.
I've gotten plenty of good clothes at Cabelas. Might have to wait for sales, otherwise they are a little on the expensive side.
But, you get what you pay for.
I remember the heralded arrival of W. T. Grant in my local area. It was going to take on K-Mart and Sears. They picked out a weird location that required a bit of adventurous driving skills to enter the parking lot. In an average year, I’d take a guess that thirty accidents occurred per year on the entry or exit out of the parking lot. Within four years, you could just sense that they’d maxed out on customers and were losing folks....by the sixth year, they shut down (not before crushing out K-Mart).
If you went and took an image of shopping in 1977, and tried to view the same shops today...it wouldn’t work. Most are gone. I can point at malls that were hyped up fifteen years ago, and are being shut-down or torn-down today. Totally different environment.
Sears in its infancy was a CATALOG...kinda a form of Amazon today. You could buy almost anything (a house!) from them.
Does anyone remember the smell of roasting nuts and the candy case usually located near the elevator at Sears? My dad always brought it up when I was a youngster about how Sears shafted Roebuck but kept his name??
“JC Pennys had made a clear effort to modernize. Whatever problems they face, they are at least trying.”
I agree. JCP has upgraded its merchandise and the look of its local store. Even mrs riverdawg shops there occasionally, and in years past it wasn’t a serious option. I read the local JCP just signed another lease at the mall.
At one time Sears’ “Satisfaction guaranteed” was the best warranty in the business. Bad decisions since it’s pinnacle in the mid-70s have brought it down. Selling out to KMart was the kicker. It severely diminished the brand.
Selling off it’s classic tools and appliance brands is the end. Sears has nothing else to offer. They needed to reinvent themselves around good old fashioned reliability and durability. That still sells in middle America.
I’ve hated the Walmartization of rural America. To me it’s a sign of retail decadence and globalized intrusion into the heart of America. But no one can beat them on price. I still don’t get how Walmart can sell a blu-ray/digital video at $2-$3 cheaper than everyone else, including Target (Costco excepted for very limited current releases).
Back to Sears - it resonated with middle America in its day, because it was more along the lines of a ‘general’ store. It had everything a small farm/ranch could need and it had reasonably intelligent people in merchandising and sales. It’s catalog business was epic in its day. Sears and Wards invented that market and gave it away.
Sad to see it go - and I do still shop there for tools, auto, and appliances. I hope they find a way to survive -without selling off their hard lines.
They should do what all the airlines did - reorganize under bankruptcy.
Sears is dead.
Telling everyone that you are dying guarantees that you will not be resuscitated.
Sears is dead.
It will stay dead.
All that changed on November 8, 2016.
I loved going to Murphy’s!
The smell of fresh popped popcorn hit you before you opened the door because the candy counter was right at the front of the store.
I can still conjure up the aroma when I think about Christmas shopping there.
The bulk candy section was a kids dream that never grew old.
The nice lady at the candy counter would slip you a “sample” if your parents didn’t mind.
Great advertising!
Sadly, we grow older and the things of our youth slip away.
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