Thread regarding Sears layoffs

@cbp-- Let me explain how that might work in your world. Lets say you have a delivery business. That business has 10 cars with 10 drivers you pay to deliver the goods.

Now on those 10 cars you pay the car payment, the insurance, the maintenance, the driver, the taxes, gas. You also have business overhead such as office supplies, phone, paper and other things to run your business.

Now to be able to pay all those expenses you have to make a certain amount and do a certain amount of deliveries to make all the payments and turn a profit. Lets say it is $1000 per car per month. Now when things are good and business is great you can make the $1000 or more per month and everyone works and everything is fine. Lets say you have 100 customers per month.

Now lets say that the cars are getting older and the maintenance on the cars is now $500 per month for a few of the cars. And maybe on top of that people who used to use your service are now using another service. Lets say now you only have 50 customers per month

Well to stay in business you have to cut cost or raise prices. Now raising prices may work but it can also backfire in that your customers go to another delivery service.

The easiest way to cut those cost is to get rid of a few cars and drivers. Now you have reduced your expenses on those cars and the labor of the driver. eventually you will reach a point "right size" ,"asset light" where your expenses (cars, drivers, maintenance, office supplies etc) are less than your cost to do business.

Now replace the cars with stores, the drivers with the workers and the other delivery service with Wal-Mart, Target, JCP and you can see how closing stores can actually save the company. You do the same thing in your life with your budget. When you get into financial trouble or you need to save more money for something you cut cost.

I dont think the cuts will save the company--too much debt but thats why they do it

@bpc I agree the problem I think is competition grows. Years before Amazon wasnt here, now its here and its a growing company that is taking lots of demographic shares from other retailers. JCP entering the Appliance arena also takes sales from Sears. In our store we have actually felt it big time appliances isnt sell as well as before so more competition hurts us in the end. Its just taking to much to do proper changes to keep up.

I fully expect Sears to file for Chapter 11 sometime this year, with the high likelihood of it being converted to a Chapter 7 either late in 2018 or early in 2019. If SHLD goes Chapter 7, Lampert will still make out well as I think he is the primary lienholder

The downfall of Sears will likely be studied in business schools for years to come. This has been coming on for years due to incompetence of senior management, even dating back to before the merger (Kmart filed Chapter 11 in 2002 due to incompetence up top and ended up having to close hundreds of stores).

@cbp The theory is that some stores are individually in the red losing money, while other stores are individually profitable, so if you close all the ones that are losing money then you'd be left with only the ones that are profitable. The problem is that they're never really individual stores - there are fixed costs that will have to be spread across fewer and fewer stores (taking a larger and larger bite of each remaining store's income), and economies of scale that are being lost.

I still don't see how LESS stores is going to mean MORE profit but I guess I don't follow this new math people talk about.

@tjm Right or wrong, Eddie obviously never wanted the amount of stores Sears had. I think there is a certain number he wants, and that is what he will invest in. Also, we all know that it was always around 300 Sears stores that were profitable...now yes some of those profitable stores have been sold but in general we haven't had a time in the past 20-30 years where anything more than about 300 stores were profitable for Sears.

@R5BzefE-tat If Fast Eddie really cared about stores, he would have invested $$$ when times were better (mid to late 2000s) into upgrading and renovating stores

Original poster is full of &*cking #@it. Store closings are real, but bankruptcy is a myth.

@xck Not quite sure where you are coming up with your numbers. Suppliers are being paid. Why would they force a bankruptcy?

To get down to about 200 K-Mart and 400 Sears would only require about 200 more stores to close... or 2 more rounds like the one that is about to happen. I'm kind of curious as to how the suppliers can't force a Chapter 11 - Have you seen the Deficit on the balance sheet? The company is something like 8 Billion Dollars underwater. If you compare it to JCP, they have about 1.5 Billion in Equity. Sad shape Sears is in and its just getting worse.

But remember Eddie has said several times he won't file BK but then again he also said he cares about the stores.... something we all know he doesn't care about.

I'll keep this date in mind but I highly doubt this is anything more than you just speculating due to last year.

Sears Canada too started with a Chapter 11 and then swiftly moved to a Chapter 7.

Getting down to that number of stores is going to take a Ch. 11 reorg - closing 103 stores is most likely a 350 million revenue hit and they would still have 4 billion in debt to resolve - monkey wrench is what happens to the 140 ring fenced - if sold are they gonna be lease backs - if not more revenue bye-bye

Potentially 243 stores headed for closure this year

Can you say Chapter 11 bankruptcy reorg

From what I understand, the ultimate goal is to get down to about 200 Kmart stores and about 350-400 sears

What's your source?

Guessing this is when the big ax is going to drop. Probably will be also when they will just shut down all remaining Kmarts at once.

Early March in last years annual report Sears issued a "going concern" warning, that unless there was some dramatic positive change the company would be out of business in 365 days . There has been no dramatic positive changes announced to date.

bankruptcy?