As reported by KABC, the Sears Craftsman brand is being sold to Stanley Black & Decker. Sears will get $900 million from the sale, which will presumably be spent in yet another attempt to stave off what seems like the inevitable collapse of the once mighty retail giant. Combined with this Thursday announcement was the news that Sears will be closing 41 Sears stores and 109 Kmart’s.
The Decline of Sears
Craftsman being sold off is only one recent indicator of the massive decline that Sears has seen over the last two decades. Sears was already in a downward spiral when Eddie Lampert took control of the company more than a decade ago. Lampert was a well-known Wall Street investor prior to taking the helm at Sears.
Lampert became CEO of Sears in 2013, but he has been unable to staunch the steady bleeding out of the company over the last few years. And from a consumer standpoint – as WRAL notes, Lampert prefers to call them “members” – Sears has fallen very far from what it was in its heyday.
Many of its stores have already been closed, and those that still exist are often half empty, poorly organized and understaffed. It’s not uncommon to enter a Sears store to find that the roof is leaking onto the sales floor.
The purchase of Kmart seems to of been another major strategic mistake by the company. Kmart itself had also fallen from its former position as one of the top retailers in the United States, and the logic of combining one poorly performing company with another is difficult to follow.
Loss of Sears Craftsman Brand
One of the things that Sears was synonymous with was high-quality tools. Craftsman was renowned for the fact that Sears guaranteed Craftsman tools for the lifetime of the tool. If one of these tools broke during its use, the customer could simply bring it back for repair or replacement.
Of course, in recent years the quality of Craftsman tools has declined from what it once was. Nevertheless, the brand name still carries weight with the public – which is no doubt why Stanley Black & Decker made the decision to buy it from Sears.
But there’s no reason to think that it’s going to stop with the Sears Craftsman selloff. Sears has a number of other well-known brand names that could be sold off for desperately needed cash. Sears already seems to be looking for potential buyers for its popular Diehard and Kenmore line of products.
The Problem for Sears
Sears – like virtually every other major retailer – has been devastated by the impact of online retailers. Obviously, the largest and most important of these online stores is Amazon. Sears, Target and Walmart have all lost revenues to this seemingly unstoppable online colossus.
Another problem for the stores is the increasing popularity of dollar stores, such as Dollar Tree and Dollar General. The big-box stores have simply been unable to match the pricing that these smaller stores provide to customers always looking for bargains.
Some large retailers have adapted to the situation better than others. Walmart for instance is still doing extremely well with its brick-and-mortar stores and has an ever-growing online presence of its own. But others – like Sears – are beginning to see the writing on the wall, and it looks very much like an “out of business” sign.
The Endgame for Sears
Most experts agree that Sears will almost certainly be forced to declare bankruptcy at some point in the next two years. And it might happen even sooner than that. The Sears Craftsman sale only serves to drive home just how desperate the situation at Sears has actually become. And there’s no reason to think it will get any better.
[Featured Image by Scott Olson/Getty Images]