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Thursday, June 11, 2015

Kmart & Sears: Can We Find an Answer?

          It has been a question asked by analysis's and investors for over a decade, and that is when is Sears and Kmart ever going to hang up the towel. There was an article posted by CNN Money this week on the state of Sears Holdings, and what the future holds. The article mainly states multiple outdated facts that have been published and stated for several years already, the same plummeting sales numbers, and continuing to come up with idea's for a better future for the company, that again, continue not to work.

          There are two commercials on YouTube from when Kmart Holdings and Sears, Roebuck & Co. were both listed individually on the stock market, The Sears commercial is from 1989, and shows a series of stores located in California, and shows the lights going off, and saying, that every Sears in America will be closed. The Kmart commercial featuring the late comedian and actor Bob Hope, sometime during the 90's, when Kmart Holdings began to remodel and change hundreds of stores to the new "Big Kmart" name.

          To get away from constantly complaining about Sears and Kmart, other brands out there, like Meijer, Wal-mart, and even Target throughout the years, have remodeled there stores and changed there image, and slogan's, but what separates them from Sears Holdings Corporation (SHC) is they have changed all there stores within a certain period of time, not leaving many stores looking outdated, and others newer. When Wal-mart changed there stores image back in 2008 and 2009, all the stores seemed to be under renovation to convert from blue store fronts with the "star" in the logo, to the new yellow "asterisk" and all the stores various shades of tan and beige.

          The problem with these Kmart and Sears stores even before 2003, when Edward Lampert bought the bankrupt Kmart Holdings chain, and a year later, after original intention for Kmart to buy Sears, in November 2004, Sears and Kmart merged, and formed Sears Holdings Corporation.

           From then on, all sorts of individual ideas in the brand were still around before the merger, various Sears stores in bad shape, and of different styles and era's, and many styles of Kmart stores, ranging from the 60's, to the 90's, in terms of the design and sizes of there buildings, plus over several decades, Kmart moving in to former store locations of other chains, and each store looking different, there was no consistency with the chain, and the green concept stores, looked nothing like any other Kmart store during that time.

          The idea of what "Fast Eddie" Lampert, as more commonly referred to, for being a conman of sorts, is to continue to close stores, or remodel ones that don't need it, and leave extremely outdated stores to continue to be insufficient. This is way to late for that at this point, that was something that should have been done in 2005 and 2006, not over a decade later. 

          To get back to the CNN article, all it states is outdated information that has been seen on every other cite, including Wikipedia, for too long, and at this point, there is nothing left to report on, so they just go back and make Sears and Kmart sold back, by throwing rocks at the company, saying 15 years ago, they had over 2,000 stores, and today, they have less than a 1,000, let's see, over 10 years of down earnings, and a recovering bankruptcy case, a company might loose a few stores, the information is irrelevant, and not necessary to report on today, we know the facts.

          I am backed with this report based on my own opinion, other's opinion related to mine, and the fact's written all over the wall, how to basically neglect a company, what Lampert did was adopt a stray dog, and refused to feed it. Through social media (Facebook, Twitter, etc...), I have compiled questions and comments relating to the issue and what the CNN article states, and will keep the replies anonymous, but this is what I have heard.


 "This is ALL outdated information used to slander an already down company, be more relevant, after all, we are living in the "modern age"! Admittedly, it's not the most balanced article, but I'm afraid it's more right that wrong. Well, again, its just restating everything we all know, including some statements on the unforeseen future, because at the rate they are going, they cannot predict there outcome. Sadly, I don't think Sears Holdings knows either."


"I like Kmart. I shop our local stores a couple of times a month. I find their prices competitive with Target and Wal-Mart, but with a far better selection. That said, they are clearly in a death spiral, and without a major effort---which may be too late---to fix things, I do not see how they can survive. They need investment in everything---remodeled stores, new point-of-sale systems, new signage, new locations---and Lampert clearly has no intention of doing any of that. He is stripping them for parts and deliberately driving them into the ground."


"...It's a viable business in the wrong hands, It doesn't deserve to die."

Some of what people think, who are just "ordinary people", can really step up and change the company, with these idea's, we can really turn around a struggling symbol of American retail.

"Their point of sale systems are particularly bad. Their POS is a POS ("piece-of-sh-t") and would be the first thing that any responsible owner would update. I was in a Kmart a few days before Christmas, and the registers kept going down. How many millions of dollars in sales did they lose? How many thousands of customers walked out and will never go back? You can run all of the clever advertising you like, but if you can't actually take money from your customers, you have failed the most basic element of retailing."

This is a very good point, one thing is to compete with all other companies during the holidays to get more sales, but what is different from the other companies is , they see profit from advertising, not making viral "dirty" pun's, and seeing no positive sales numbers.

"Kmart and Sears are both a timewarp in the worst way. It's depressing to shop there if you look at the details. Retail was a lot more fun back when we had actual retailers. A lot of what you see now is just warehouses you can walk around in. There's no effort to create a sense of place or to educate or entertain the customers."

"You mean like, "Attention, Kmart shoppers! Right now, we have a blue-light special in our jewelry department. For the next 15 minutes, all Timex watches are 15 percent off..." and it goes on.

"Popcorn, cherry icees and hot dogs. Now, they have Little Caesars, but it often seems like whenever i'm at Kmart, the counter is closed. C'mon people. This is not rocket Science. The stores have to be cheerful; they can't look like something out of the Soviet Union."

"Retail's all very cynical and crass now. They'd sell a lot more if people felt more welcome."

This is an idea on how to really turn the company around, Lampert has to think before he acts:

"Here's my non-expert opinion on how to fix Sears Holdings:"

"[1.) merge Sears and Kmart completely, and give them a new name. Sears" and "Kmart" have the smell of "loser' on them. Call'em Kresge's of Roebuck's or Kenmore or whatever, I was going to say "S&K", but you can't spell "SucK" without "S&K", so scratch that.

2.) They have Sears stores in dying enclosed malls. Either get out of those leases or find a different format with a different name, because those dying malls are one of the things that has killed the sears brand.

3.) Rationalize the locations. If there's a Kmart near a Sears, merge the locations. And smaller locations would be better; their overhead is still geared to 1970s operations. They need to cut their stores in half and lease the other side to another retailer.

4.) Take the softlines out of smaller Sears stores, except maybe kids' clothes. No one likes Sears' softlines. Their clothing has always been crap. Turn those smaller Sears locations into appliance, hardware, and hardlines stores. Call'em Craftsman stores.

5.) Kmart clothing is worse than Sears. Either upgrade it or dump it, or lease the clothing departments out to another retailer who knows something about clothing. (Like Shopko does with Payless Shoesource).

6.) For the love of God, put in modern POS systems.]"


          Based on what not only these people think, but everyone else, these are the obvious ideas that the company does not issue in any business plan, upper management refuses to think constructively, and as long as Lampert is at the head of the table, there will be nothing done. The start of every fiscal year, analysis's guess how much longer Sears can hold on, they said that Sears and Kmart would be gone by 2014, back in 2009, how can a company with over 10 years of negative sales numbers after Christmas and at each quarter, continue to chug on, where is the money being hidden. I have never heard of a company that puts its own asset's on the line, just to continues to destroy its self in other aspects of what they stand for. The final ending of SHC is either Lampert step's down, or is impeached, of the company will file for chapter 7, leaving the company in the hands of the shareholders, be bought out by a liquidator, several thousand jobs will be lost, and millions of dollars will be lost from the companies that stocked the stores, and lost there merchandise to the liquidation company. Like other lost chains, Montgomery Ward, Service Merchandise, Linens 'N Things, and Circuit City, Sears can stick to be strictly and online-only seller of clothing and appliances.

          We will bot know until it happens, but until then, like the presidency, we will not know what is in the future, until it happens.

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