I ask because their doesn’t seem to be a pattern to these store closings. It seems as random as possible. I don’t know how some stores have managed to avoid the ax. You have single random stores in the middle of nowhere that are still alive. I don’t get it?
19 replies (most recent on top)
I think a lot has to do with the lease and the profits (at times). The store I worked in was apparently profitable until every year things got worse profits went down. When they started to cut people things just went south. Towards the end Eddie wanted our store close to lease it or something. I never knew if that part of the building (was an anchor store) was owned by Sears, but I can say one of his goonies from seritage came to inspect it on the final days of Sears. Rumor was they would open some stores (my store closed in 2019 of January), but its middle of 2020 and nothing has changed. Looks like nothing happened the store could of still been opened, but doesnt seem like Lampert, wanted any of that stuff in the end. Till this date the building was left empty as when I left the day Sears closed.
Pretty sure a magic 8 ball is involved
Seems like the plan for a long time was to not come back.
The former Kmart in Hayward is still virtually untouched (even the sign is still there) except they put a fence to keep the hobos out.
I like the sports analogies. And the best part is they are actually true. Want another one? Sears is the equivalent of me playing tennis against Roger Federer, and I'm down 6-0, 5-0. He could be Drunk, 1 hand tied behind his back, stand on 1 foot, play blindfolded and I wouldn't have a chance to come back. That's where Sears is now.
Darts. Since throwing them at a board is how store closing are decided.
Next time, can we work water polo into the sports analogy? Or maybe Jai alai?
This guy with the sports analogies ... he finds a way to slip them in frequently and often!
I can't believe we are discussing strategies for keeping the sawed off little remnants of these 2 chains alive. The once had over 2000+ stores. Who cares if they can finagle a lease agreement to keep 20 stores open? At best case scenario, if no more stores close, then 98% of stores have already closed and the company is still an utter failure.
At this point, saving any of the stores, is like discussing how to kick a field goal in a football game when your team is down 200-0 in the 4th Quarter with 2 Minutes left. Who cares? So u lose 200-3, instead of 200-0. Big deal! You still lost and lost badly. Get off the field and go home, the end result is decided anyway.
Anything short of opening back 2000+ stores (which will never happen) is an utter failure. Get off the field and let a better team come play. This game is over.
"If the lease is up, the landlord can decide to close". Definitely true, and it's in some places it's been well known the landlords want Sears gone.
"The Westwood store should hang on awhile longer". Could be. It really doesn't take much for a store to cover variable costs and hang on. The Kmart near me was down to around 5 employees in the entire store for the last year before it closed. It was a manager, one cashier, maybe 2-3 others doing everything else. The opening of a Walmart nearby finally put it out of business..
At some point the whole thing is going to collapse and they will announce the closing of all the stores.
One factor.
If the lease is up, including lease options, regardless of store profit, the landlord can decide to close. Sometime the landlord will sign an extension at a requested renegotiated rate. Usually if that landlord doesn’t have another lined up.
But
Would you want to extend a lease with this company, if you had some other tenants lined up?
@1frt+15KJMFYq Well then based on your explanation, the Westwood Kmart should hang on for a while longer. The shopping plaza it's located in, is a bit run down and has been for years. With a fair amount of "for lease" store fronts. So not much demand on the real estate there.
The closings are turning both brands into chains that exist mostly in only a few regions of the country: Northeast-Mid-Atlantic corridor; Florida; California; and offshore islands (Hawaii, Guam, Puerto Rico, Virgin Islands).
If this were some other company, I'd call that a reasonable strategy.
if the lease is ending the store closes. If a landlord will pay them to leave, they leave. If they cannot cover the variable costs they shut the door.
The Ala Moana Sears was part of an 11 store deal for $200+ million. It wasn't sold for that much alone. Source: The Wall Street Journal
"... General Growth disclosed Thursday that it's paying Sears $270 million for the 11 department-store sites. Most of those are at average malls across the U.S., including Market Place Shopping Center in Champaign, Ill., and Quail Springs Mall in Oklahoma City, Okla. ..."
The two most important issues are the profitability of the store, and the potential for gain from sale of the underlying real estate. As long as a store produces enough gross profit to cover the variable costs of operating the store ( the electric bill, employee pay, rent, etc) they might just as well continue to operate it, unless a good offer for the underlying real estate comes along. If there's a good offer, they take the money and run, possibly closing a "profitable" store in the process. The best example was a store in Hawaii some years ago, which as I recall sold for $200m. It makes no sense to continue operating a Sears store when $200m is on the table. They take the money and run.
So when there are stores with no offers for the real estate, they will operate them until they finally go into the "red" and cost more to operate than the store brings it. Now, since nearly all the stores are experiencing declining sales, they are all going to close eventually, but it can be a long agonizing process, as they cut costs to match declining sales. I've seen stores that once had 400 employees down to 50 when they finally closed.
There are a few other complicating factors, such as leases, but in general these two factors explain the pattern. This is why the random stores out in the middle of nowhere survive. No one wants the land. The company doesn't have the intelligence to think about the overall pattern of stores. So they have this strange collection of stores scattered around the country.
It's been a long slow process but I think the current crisis will accelerate the death of Sears and all the stores will closed by the end of 2020. It's rather amazing the process has been drawn out this long. The company really should have been done years ago.
Lets see.... Shipped mittens to a very warm climate Sears in July.
Never see snow here let alone 40 degrees.... Yes , send us the right mix to move forward!!
LOL, what a joke.
The answer to your question is in the mittens. Find out who sent them and then you will know who decides. That or you will learn they graduated from the same business school.
@cwl+15KJMFYq I know eventually the final nail will be in the coffin. However until that happens, I am curious how they decide who stays on for now, and who gets eliminated.
All of them are closing.