The latest from the Wall Street Journal, 12-30-11:
Sears Holdings Corp. identified 79 of the stores the retailer is planning to close, with nearly half being Kmart locations and Florida having the most closures by state.
Earlier this week, the retailer said it planned to close between 100 and 120 stores and record up to $2.4 billion in quarterly charges after another weak holiday season.
Closures affect 25 states. Florida led the list with 11, followed by six each for Ohio, Michigan and Georgia. With the exception of Ohio, those states had jobless rates above the national average in November, according to the Department of Labor.
Most of the closures were distributed evenly across the U.S., though the Northeast won’t see many. Pennsylvania and New Hampshire each are expected to have two store closures so far. No others were mentioned by Sears on Thursday for that region.
Sears will close about 120 Kmart and Sears stores in a bid to revitalize its business. Shares fell 27% in reaction. Karen Talley has details on The News Hub. Photo: Getty Images
Sears is planning to close 38 Kmart stores, 25 Sears full-line locations and two Sears hardline-only locations. The company will also close 14 Grand/Essentials stores, a format Sears had opened over the past decade in an effort to better compete against Wal-Mart Stores Inc. and Target Corp.
According to the company’s website, Sears said employment totals varied and thus the company couldn’t provide an estimate of how many layoffs would occur. Sears said a typical store being closed employs between 40 and 80 associates.
Original Post 12-28-11:
Full disclosure: I wore clothing from Sears as a kid. We also used to take our children when they were young to have their portraits done by the photographic studios at Sears. We even purchased our first washer and dryer from Sears right before our first child, Maggie, was born and we knew our laundry needs would increase dramatically (the number of loads per week has yet to decline 17 years later). However, we haven’t purchased much if anything from either Kmart or Sears in the past decade. Our clothing purchases have migrated to higher-end department stores or clothing chains. Our bigger ticket items are now bought at Best Buy or online. Any tools I buy, I typically get at Home Depot or Lowes. Is it any wonder that Sears/Kmart is in so much trouble and closing 120 stores according to today’s Wall Street Journal:
Sears Holdings Corp. said Tuesday that it will close as many as 120 stores and record up to $2.4 billion in quarterly charges after another bad holiday showing, raising fresh doubts among analysts about the future of the middle-market retailer.
Sales at stores open at least 12 months have slid every year since the company was created by the well-known hedge-fund investor in 2005. But its deteriorating condition has accelerated this year—it posted a $421 million loss last quarter—and it said Tuesday that same-store sales for the eight weeks ending Christmas Day dropped 5.2% compared to the year before.
The 49-year-old Mr. Lampert has struggled to retain qualified executives: Under his watch, the company c-suite has become a revolving door. Stores have been criticized for showing their age.
Its once highflying shares—which peaked at $191.93 in April 2007 amid speculation that Sears would be an investment vehicle for Mr. Lampert akin to Warren Buffett‘s Berkshire Hathaway Inc.—plunged 27% to $33.38 Tuesday. They have lost more than half their value this year and are down 73% since the merger closed in March 2005. The market capitalization of Sears by the end of Tuesday had dropped to $3.6 billion.
That is far from what Mr. Lampert envisioned when he launched an $11 billion purchase of venerable Sears, using money from Kmart, a company he had steered out of bankruptcy earlier in the decade. He predicted the merger would create a “powerful leader in the retail industry.”
Frankly, if you’re going to get me and my family into a physical retail setting, you had better make it worth my time, in terms of giving great customer service, making it easy to find what we want, providing a pleasant environment, and of course offering decent (but not necessarily the lowest) prices. Otherwise, forget it. Nonetheless, Mr. Lampert chose a different approach:
But from the outset, Mr. Lampert’s strategies for reviving the fading Sears and Kmart brands confounded retail experts, who especially question his decision to scrimp on renovating aging stores.
While store chains typically spend $6 to $8 per square foot on annual maintenance according to retail experts, Sears is spending a fraction of that amount—about $1.90, according to investor research firm International Strategy & Investment Group.
Mr. Lampert’s bare-bones décor frustrated some of his business partners, notably Martha Stewart Omniliving Media Inc., whose relationship with Kmart ended acrimoniously in 2009.
“Have you been to a Kmart lately?” Ms. Stewart said in a CNBC interview around that time. “It’s not the nicest place to shop.”
I think Raymond “Rain Man” Babbitt put it best:
Aneil
Total Trust 