Sears To Close Yet Another 72 Stores Amidst Failing Sales Numbers, Kmart Included In Sell-Off
Sears Holdings Corp. dropped over 10 percentage points on the NASDAQ as trading opened this morning. The bad news that predicated the stock market sell-off was that Sears and Kmart stores had produced yet another quarter of declining sales, according to the Wall Street Journal, making last quarter the 26th in a row where deficits were a harsh reality. Not quite death by a thousand cuts but approaching it, investor confidence seems to be very low and faith that the parent company for both Sears and Kmart retail locations can right the ship and steer into profitability is in serious doubt.
That the famed big-box retailer – Sears, Roebuck, and Company perhaps exemplified retail sales throughout generations of American history and captivated the minds of children for three-quarters of a century with their Christmas Wishbook – was in trouble has been public knowledge for some time. Just how dire the situation is, however, is only illuminated by degrees with each and every quarter that the balance sheet shows further deterioration.
Eddie Lampert, primary shareholder and chief executive, has had a difficult bout to deal with in his attempts to correct the course, Marketwatch reports, but should the parent company eventually file for bankruptcy and dissolve, he remains in a good fiscal position. Having switched from being responsible for retail relations to hedge-fund management years previous, drawing less fire in the process, Lampert is now set to make an offer to take control of Sears’ most valuable remaining assets and the only ones likely to be competitive in today’s market as well as tomorrow’s. Including but not limited to the Kenmore line of products, the Sears Home Improvement program, and the PartsDirect service, Lampert stands to escape the implosion of an industry icon relatively unscathed.
Consumers have migrated away in droves from traditional shopping experiences, shifting their preference toward online purchases. The continued rise and dominance of sites such as eBay, Amazon, Wish, Alibaba, and digital music, video, and video game delivery services have created a true paradigm shift in the sales sector writ large. This trend towards online shopping sees traditional retailers attempting to steal tricks of the trade from the new sales model, with mixed success.
Sears is not the only brick and mortar institution facing serious financial woes as online shopping becomes more popular globally. Toys R’ Us filed for bankruptcy and will be closing and liquidating 735 stores along with their inventories. The Canadian branch of the toy giant survives – for now. Health and fitness specialist GNC announced a planned closure of 200 stores in 2018 after a devastating quarterly review. Best Buy announced in February that they would be winding down operations of 250 or so small cell phone shops, mostly in malls. Bon Ton, another nationwide retail chain, filed for bankruptcy earlier this year as well and will be shuttering the doors of over 250 stores.
