This could finally be Sears and Kmart’s last holiday shopping season
By Chris Isidore, CNN Business
This Black Friday could quite possibly be the start of the final holiday shopping season for Sears and Kmart, two brands that once proudly dominated the US retail landscape.
Both chains are just a shell of what they were when the holding company that owns them emerged from bankruptcy less than three years ago.
At the time, the holding company – overly optimistically named Transformco – still had 223 Sears stores and 202 Kmart stores nationwide. That was already an 87% drop from the 3,500 stores between the two brands when they merged in 2005 to form Sears Holdings. But the percentage drop in stores since the company emerged from bankruptcy in February 2019 has been even steeper.
Today, there are only 21 full-line Sears stores left in the continental United States and two more in Puerto Rico, according to the store locator on Sears’ website, after recent closings are eliminated. Seven other stores listed on the site are limited to selling appliances and, in some cases, mattresses, rather than the full range of offerings that were once a hallmark of the two chains.
And by the end of the year, there will be only six Kmarts left in the continental United States, along with six more in Puerto Rico, Guam and the Virgin Islands.
“To me, it always felt like a sell-out. It’s been going on for years,” said Reshmi Basu, retail bankruptcy expert at Debtwire.
Many retail experts blame Eddie Lampert, the main owner of Transformco and Sears Holdings, for the disappearance of two chains.
“He lets the leases expire, he abandons the stores. He keeps them open if it makes sense to stay open,” said Mark Cohen, director of retail studies at Columbia University. “Obviously they will all be leaving shortly. You can count on that.”
Sears and Kmart aren’t the only retailers struggling with shifting shopping habits toward big-box retailers like Walmart and Target, and online retailers like Amazon. JCPenney and Neiman Marcus both filed for bankruptcy when the pandemic hit in 2020, and Lord & Taylor went bankrupt.
But Lampert’s critics say he’s responsible for both companies’ steep decline because he invested little in the stores themselves and sold off much of the more attractive real estate and brands Sears once owned. such as Craftsman Tools, Diehard Auto Parts. and Lands End.
“It’s been in decline for some time,” said Neil Saunders, managing director and retail analyst at research firm GlobalData.
There is little chance of saving either chain in the current retail environment. Sellers are struggling to provide much stronger retailers with the inventory they need, given current supply chain issues. This makes it harder for Sears or Kmart to have the products shoppers want.
“We know that suppliers prioritize their deliveries. They deliver to outlets that add more value to the brand,” said Greg Portell, senior partner in consultant Kearney’s global consumer practice.
And the job market – with near record numbers of job vacancies – is only making it harder for struggling chains to attract the workers they need.
“The war for talent in retail is very real right now. Not only are they raising the hourly wage, but they’re looking at other things to attract workers, tuition, benefits, things that Sears and other struggling retailers will struggle to match,” Portell said. .
If this is indeed the end, it would be a sad demise for two channels that both date back to the late 19th century.
Kmart began in 1899 when founder Sebastian Spering Kresge opened a dime store in downtown Detroit bearing his name. The Kmart brand did not appear until 1962. The chain grew rapidly over several decades, claiming the discount segment of the market now dominated by big-box stores such as Walmart and Target.
Kmart became known for its 15-minute “blue light specials”: a store flashed a blue light and announced “beware Kmart shoppers” over the PA system, and customers rushed to buy the discounted products . The promotions started in 1965 but were discontinued in 1991, although Kmart tried to bring them back several times.
Sears’ history is even richer. The company was once the nation’s largest retailer – both Walmart and Amazon in its heyday. At a time when the majority of Americans lived in rural areas, its catalog enabled many consumers to purchase goods they otherwise would not have had access to.
And Sears stores dominated the retail landscape, forcing many local Main Street stores to close, as department stores would one day close department stores. Many Sears were the anchor of shopping malls that contributed to the growth of American suburbs. It was literally a company that changed America.
™ & © 2021 Cable News Network, Inc., a WarnerMedia company. All rights reserved.