With the holidays just mere weeks away, many stores are preparing for probably the biggest sales they’ll have the entire year, especially on Black Friday. The Inquisitr is keeping up with any specials coming out when it comes to both Black Friday and Cyber Monday. Supposedly, a new setup and system will make the undesirable elements of Black Friday, such as waiting in long lines, a distant memory by opening on Thanksgiving. That may be okay because of all those doorbuster deals consumer zombies are willing to kill for, right?
Unfortunately for two stores, Christmas may never come. Reports state that both Sears and Kmart are collectively closing 77 stores across the nation, which will cut 5,300 jobs.
According to WGNTV and followed up by CNN Money, Sears is closing 31 stores, while Kmart closing 46 just before Christmas. This suggests that the companies are raising a white flag of surrender. Usually, most stores have their best sales during the holiday season, and is considered the lynch pin that keeps a business from going under. If both of these stores are willing to close right before the holiday season, it means the higher-ups have little to no faith.
Allan Ellinger, senior management partner at MMG Advisors, an investment bank that specializes in fashion and retail, detailed the situation in the following statement.
“They’re [Sears and Kmart] are not giving anybody confidence that they’re going to be around long-term. It’s sad, these once among the industry’s leading brands.”
The closings of the stores is having a negative effect on the locations that are still open for the season. Instead of promoting seasonal promotions, the remaining few are holding going-out-of-business sales.
On the business side, Fitch recently downgraded Sears Holdings to just above the default status, suggesting the company may not have cash to continue beyond 2016. Standard & Poor’s may do the same. S&P analyst Toby Crabtree said the company’s cash crunch is far worse than anticipated with more stores closing than expected before the year is up.
It should however be reported that both Sears and Kmart have both been in a free fall as of late in which they closed 166 stores a year earlier placing them at only 1,900 total then. Howard Riefs, a Sears spokesman, didn’t verify closures of stores compiled on a list by Seeking Alpha, but simply notified employees.
“We stated in our second quarter earnings that we would be closing unprofitable stores as leases expire and in some cases will accelerate closings when it is economically prudent. If a store is not generating a profit, it is straightforward that the store should be considered for closure.”
For those of you who remember going to Sears and Kmart for your shopping needs, what are your opinions of the retailers downsizing? Though it may be a sad thought for some of you, do you think both stores will cease to exist by 2016 just by the activity shown on the financial business side of things?
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