Thread regarding Sears layoffs

Does anyone know for certain when the next round of closing stores will be announced ?

I am just taking a guess but maybe your store is staying open because one they own the building and two the overhead costs are very low, they can run it on minimum payroll and even it is a very low volume store it might be profitable to run?

Maybe OP has some input. This was just my guess.

I have a question: what are the chances of a "B"-sized Sears store closing when 1) the building is owned by Sears yet 2) it is in a dead mall in an economically weak community and 3) sales and scorecard metrics have been tanking for quite some time? Every one in town thinks we are closing but somehow we have stayed off The List every time store closure announcements are made.

Meanwhile, seemingly stronger stores (in bigger communities with much higher potential in sales volume) are shuttered, mostly because the lease is up or will be soon or they were sold off to Seritage.

Sad to say but stores like ours are deadweight...we barely bring in $10-12k on weekends or "big" sales like Friends and Family. Otherwise, it's not uncommon to end the day with $3-5k in sales...yes, you heard that right. In fact, sometimes we have more shoplifters than paying customers. I'd hate to see the amount of loss that surfaced during inventory a few weeks ago. We do poorly in PAs and credit which from what I understand is what keeps stores open.

What do you think, original poster?

Thanks for appreciating my rant. Here is a question for everyone at store level since I left two years ago.

If a register/RMU/phone, any IT breaks, are they still having you send in the old RMU to replace it with a "NEW" one? Or has it gotten to a point to where they say you have to try to fix it?

What I am trying to say is, are they shipping any equipment out like they used to do?

Like send the RMU, back to symbol to be repaired?, NCR tech to fix the registers, ect.

Or is it to the point where you have to "fend for yourselves" and play IT tech to keep your equipment operational? In addition to running your store?

@IWD0TBD-3lbl "Sorry for my rant, but I wanted you guys to look at the technology side of things from a P&L standpoint."

This is a very good point, and it shows just how many major problems the company has in addition to the financial struggles.

For a variety of reasons, Lampert has neglected many capital expenditure needs during his tenure. It's the same thing with the deteriorating condition of many of the stores - major cap ex needs have been put off for over a decade now. These things eventually catch up with a company.

SHLD would require an investment of at least a hundred million dollars (and probably much more) just to upgrade their IT / computer technology. Additionally, it would take several hundred million to properly upgrade / renovate their ancient stores. This of course is money that SHLD doesn't have, so these issues are classified as low priorities. All of these issues have contributed to the death spiral that SHLD is currently experiencing.

Most of my puts are jan of 17. I will roll them out or cash them in depending on this quarter. I could definitely see a bankruptcy possibility in this quarter, but failing that early next year. The real wild card here is that Eddie and Bruce own north of 60% of this, which makes everything more than a bit unpredictable. Fortunately Eddie's fund is long only, or I would be more worried about them trying to take this private.

Bear- they don't-as long as your puts are long dated to say jan 2018 - you will be fine.

I agree that bankruptcy is inevitable, but am not sure it's that imminent. This is still a $20 billion enterprise, and while they're unbelievably negative on cash flow, there's always a banker with just enough optimism to loan them some cash. That being said, I find it absolutely UNBELIEVABLE that all the talk at the last Q was about putting brands up for sale and monetizing assets, and management has done nothing. Any additional credit secured would have had to be declared by now, so don't see how there's going to be an announcement about cash being raised. This is is an incredibly inept management team. But they could still go pledge another handful of stores to Bill Gates and raise another 100 million or whatever. My big question is that a few months ago I read that all holiday orders were cancelled so that they could be redesigned/redone. That was in June or so. Anyone who's worked in retail knows that if your product isn't on the water by August 1st or so, you cannot execute your plan. than comes air shipment and overloaded distribution centers and more chaos. I own many, many puts on this thing, by the far the biggest short I've ever done. I just don't see how they pull out of this.

I think chapter 11 will occur within the next few months. They can't layoff everyone here at corporate all at once so I suspect they will do it in phases... like they did in 2011/12 where groups of employees were given 30 days, 60 days... 90 days... etc notice. They may file BK sooner since then I don't think they have to pay severence in that situation.... all you will get is the 30/60/90 days notice. That's my opinion for what it's worth... been here almost 23 years. I would love to blame top management for all of this but in reality all of retail is suffering so they can't take all the blame but things could have been handled better, will admit to that. When we sold Sears credit back in Allan Lacy's tenure that's what started our downward spiral. Credit was a big money maker for Sears back in the day.

Actually your post above was very informative about the P&L side of things. I know the results on August 25 will be horrible, unless they use an excuse to push the date back.

Ok so we keep hearing Eddie and Bruce talk about how they keep finding assets to prop up Sears holdings and fund the transformation etc so I thought i'd take a stab at looking at the assets they have but how they relate to cash flow since that's the thing that will sink Sears eventually. So right off the bat in term is cash raising kenmore, diehard and craftsmen are off the table for a sale since they are already pledged to cover a potion of the ever increasing pension deficit- along with some of the real estate. Sears reinsurance business is worthless- as is their 10% stake in Sears Canada. The distribution business appears to be 90% focused on delivering to Sears and Kmart but let's be generous and say it's worth $500 million. The Sears service centre is too closely aligned to the core business to be worth anything as is Sears auto.

The big unknown is the real estate portfolio thats left since we don't know how much of it is pledged to the pension deficit and to Eddie for all those loans he has secured for them plus for the revolving credit facility- what we can say is that all the best stuff has already gone to seritage and to secure the loans- I'd say at best there will be 200 freeholder left with any value but I suspect some are deserted lots and worthless- but let's be generous and say the real estate portfolio is worth $1.5 billion- looking throug all accounts and filings I am not aware of any other assets that can be sold.

I am assuming that the inventory ( deeply discounted) could not be sold until the administrators are in. So that makes no difference to the asset pile. On the negative side the business is bleeding $400-$500 million a quarter- there is suppose to be $400 million of cash a year going to the pension deficit. On top of this there are the ever increasing loan interest payments which must be running them at $150million a year alone. Every store that is moved to seritage just adds extra cost to Sears in rents - any more loans just add more interest. So we have an asset pile of circa $2 billion that could be relalized but yearly running losses of circa $2.2 billion- then they have to fund the holiday season inventory- from what?

Now we will find out more on Thursday but I cannot see any institution lending them money and Eddie' $500 million won't cut it anymore- so all in all if they make moves to burn all assets to keep warm to my mind they have less than a year at best to survive. The viscous circle death spiral seems to be unstoppable. Anyone know of any other assets they could monetize?

I wanted to apologize for asking so many questions on this thread. I just wanted to explain to everyone how bad the IT problems are at Kmart.

To clarify things for everyone, IT is the backbone of any company and if you fail to invest in up to date technology like SHC has refused to. Programs will fail, IE: MyGofer, Lampert wants "intergraded retail" but you cannot do that if you fail to invest in the most up to date technology.

A perfect example is the registers and RMU at Kmart, no matter what software SHC loads on the systems the registers will freeze and crash since they are 15years old and the hardware is not capable of supporting the software they are trying to run.

Another example is the RMU's they are 16years old they have been used and abused and will freeze and lock up also, since they are trying to run up to date software on out of date hardware.

Sorry for my rant, but I wanted you guys to look at the technology side of things from a P&L standpoint.

So I wonder where Sears are/ if they are with the bankruptcy attorneys yet? Struggling to see what other assets they could sell off to raise cash.

WOW, 1068 page views in two days and 70 posts so far as of 8/20/16 at 6:55pm est. just on this thread alone,

This has got to be a new record!

My Gofer is a wonderful store concept along with store pickup. Yet the failure with My Gofer is it could be very profitable for Kmart if it was executed properly. Two things that caused that failure is one failure to properly update the IT systems to make sure orders are picked correctly and on time. The second thing is not having a dedicated employee who's only job is My Gofer.

So while the My Gofer is a good concept, poor execution caused it to fail.

I was trying to tie in the fact that failure to invest in up to date technology is causing huge sales losses for Sears, like the crash on August 18.

So guys to try to tie the IT issue to the subject, part of SHC downfall is failure to invest in proper technology.

"I am so glad OP created this thread, it is allowing the store employees to see what is going on at corporate. And the corporate employees seeing how bad things are at stores."

Believe me, most of the corporate employees feel as hopeless and frustrated as the store employees. Almost all of the absurd decisions are made by Lampert, yet he is never around! He spends almost all his time in his huge mansion in Miami. He is so out of touch with reality it is not even funny. He hardly ever even comes to corporate headquarters - yet he is Chairman and CEO!

The only way I could deal with things was to just view my job as collecting a paycheck until I was able to find something else.

No disrespect to anyone here, but this thread was supposed to be about the financial problems and coming disaster of the company. There was already another thread about the antiquated technology we use.

I thought "Howard Riefs" was just a name they used on the "canned" press releases they use for closing stores. He actually is a real SHC employee.

Why cannot Mr.Riefs answer questions truthly? Not just a "canned" response? Is he scared of losing his job?

I am so glad OP created this thread, it is allowing the store employees to see what is going on at corporate. And the corporate employees seeing how bad things are at stores.

"Oh, I hope the media continues to pay attention to the employe moral and force SHC to answer direct questions instead of the "canned" BS press releases."

Lampert never takes questions during his conference calls. That alone should tell us a lot.

Oh, I hope the media continues to pay attention to the employe moral and force SHC to answer direct questions instead of the "canned" BS press releases.

You know what the comical thing is, we all understand the IT problems SHC has. I am proud of you guys/gals for being able to keep your 15yr old systems online even though they were never properly maintained like they were supposed to.

Guys, I understand the help desk is useless. I am just offering help. If anyone at a Kmart Store still has the binders with the old Kmart logo unless you tossed them out there is one labeled "Store System Support Guide" that has troubleshooting on the old RMU's. I was lucky to save mine from the dumpster before the store closed. So if anyone still has a copy of that binder, read it.

"I am sorry, but my offer was serious, even though I left, I can help you guys out as much as I can. Yes, OP. I am glad you got my point I just wanted to help."

Your help and post is greatly appreciated. I just wonder if Lampert and the other executives have any idea how dysfunctional their company really is? From my experience, SHLD's employees have gone way above and beyond in a sincere effort to hold this company together. Yet we are / were still treated like crap!!!

I am sorry, but my offer was serious, even though I left, I can help you guys out as much as I can. Yes, OP. I am glad you got my point I just wanted to help.

To answer the OP question depending on the Kmart store, they have 1 or 2 registers they strip for parts to keep the others running. That is the only option now.

I am not sure what the Sears FLS stores do? Do you guys have registers you strip for parts?

"FYI: Just some advice since the SHC India IT help desk is useless. If you have to Jerry rig your RMUs and IBM systems I can put together a few links from the Manafactures that made the equipment that actually give you step by step proper trouble shooting advice. I will provide my email to you guys if you want it for the manuals for the equipment."

This absolutely cracks me up! K-mart employees need to come to a website about corporate layoffs in order to get IT help, because the company's own IT help desk is useless.

That pretty much sums up that state of affairs at SHLD!!!!

That is a good question, I only know about the Kmart equipment I have no clue on Sears Canada, I was wondering the same thing about Sears Canada.

"Is OT still allowed in a closing store?"

I'm not sure about this since I worked at headquarters. Maybe someone else knows the answer. I would guess that in a store liquidation, there would most likely be SOME overtime since they probably aren't hiring any new employees and the employees who aren't eligible for any sort of severance pay often leave before the store officially closes.

FYI: Just some advice since the SHC India IT help desk is useless. If you have to Jerry rig your RMUs and IBM systems I can put together a few links from the Manafactures that made the equipment that actually give you step by step proper trouble shooting advice. I will provide my email to you guys if you want it for the manuals for the equipment.

FYI: Anyone that works in a Sears full line store, I unfortunately will not be of much help since I know more about the Kmart systems.

Anyone with a Kmart System Question ask. The only thing I ask is if it is a question about the IBM system or the Symbol Price checkers on poles I need the model numbers to get you guys the proper info.

"Actually to try to clarify what I was asking on the IT side. SHOS is still running the SHC POS system even though they are separate companies."

Do you know if Sears Canada is still on the SHC system?

"I hope this link provides helpful info and explains the IT equipment that stores are running is at least 15years old if not older."

What do they do when these units break? Can they even get replacement ones since they are so old? I can't believe that they all haven't broke after 14 to 15 years of daily use!!!!

Actually to try to clarify what I was asking on the IT side. SHOS is still running the SHC POS system even though they are separate companies.

So if SHC goes bankrupt and SHOS is still on SHC IT systems, SHOS is screwed.

So I understand IT scrambling to take SHOS off the legacy SHC syste

There should be a way to take the SHOS stores off the legacy SHC systems, and make the transition easy but I am not sure how that can happen since SHC is running out of money.

"And I feel like his hedge fund buddies are smart enough and aware enough to realize that crummy mall locations aren't worth much and are likely to depreciate in value further as online shopping continues its inexhaustible march onwards. Heck, even baby boomers are shopping online these days thanks to their kids giving them tablets and cell phones and showing them how to use them!"

This is a great point. The other thing is that mall anchor-store real estate prices in general - which is what almost all Sears stores are - will continue to decline over the coming years as more anchor stores shut down.

Macy's just announced that they are closing 100 stores. So now you will have 100 more mall anchor store sites sitting vacant. Many of these same malls probably also have a Sears store. Bon-Ton will most likely be closing many - or maybe even all - of their mall stores within the next year to two. All of these vacant mall anchor store sites are certain to drive down the value of SHLD's remaining real estate.

"Can you please post your thoughts on the timing of bk after earnings thursday?"

I certainly will. We should have a much clearer picture of a potential bankruptcy filing date then.

I'm curious if Lampert will finally admit that the end is near - probably not. For the past few years he has continually lied and down-played the huge losses and cash-burn, saying that SHLD had ample liquidity and options. If he soon doesn't come clean, he will be at major risk of facing investor lawsuits.

If SHLD can avoid bankruptcy until March, 2017 (highly unlikely), I see no possible way that the auditors won't issue a "going concern warning" when the 10-k filing is released.

And I feel like his hedge fund buddies are smart enough and aware enough to realize that crummy mall locations aren't worth much and are likely to depreciate in value further as online shopping continues its inexhaustible march onwards. Heck, even baby boomers are shopping online these days thanks to their kids giving them tablets and cell phones and showing them how to use them!

Actually, now that I think about it, maybe Bruce isn't smart enough...

Question: "The "Orginal Poster" that created this thread. Do you have any contacts in the IT department in the Kmart division of SHC?"

Not really, but I did hear from a few sources a few months ago that SHC's IT department is scrambling to separate Sears Hometown and Outlet Stores (SHOS) from their system and onto their own system. There is speculation that SHC wanted to have this completed before any bankruptcy filing.

As most of you probably know, SHOS is a separately traded public company. Most of the locations are franchised, and many franchise owners are simply walking away from their stores. I've seen SHOS locations for sale for as little as $5,000!

What is left to use as collateral for a loan? Seritage has a huge chunk of the good properties already and the Kenmore, Craftsman, and Diehard brands (of dubious value regardless) have already been spoken for by the pension. Does Lampert really want to put up more money for crummy real estate? He is already set to lose over half a billion dollars in his stock holdings.

Sorry guys, if I am confusing everyone about some of the IT stuff. I wanted to explain to some of the people that are griping about the failing registers and RMUs how old the equipment is.