Sears Closing Retail Locations in an Effort to Return to Profitability
Sears, the largest retailer and owner of Craftsman tools, has announced the closing of 235 retail locations in 2015. This follows a $548 million loss for the third quarter and projected losses to continue. Some analysts are saying that Sears is moving in the right direction, but that they need to consider closing an additional 200 stores to have a chance at righting the ship. At the beginning of November, Sears Holdings had 781 Sears retail locations and 1050 Kmart stores in the US. About 700 of those physical locations are owned by Sears, which is actually a good place to be for them. One of the repositioning strategies that they are considering is the use of those properties as leases for non-competing retailers to move in to.
The idea of Sears closing this many stores makes me sad on a couple of levels. Sears was once a retail giant and my grandparents’ generation spoke often of the Sears, Roebuck and Company department stores. Many a Christmas shopping list was fulfilled there. I still use a Sears branded shotgun that my grandfather purchased many decades ago. More than just a few consumers upgraded to Craftsman tools at their local Sears with innovative ideas, decent prices, and lifetime guarantees. Craftsman is a subsidiary of Sears and is a brand that they could sell if times got really tough. With the popularity of the Craftsman brand, I doubt that there would be any serious consideration in letting the tool company die.
One of the biggest issues that stores like Sears has to deal with is the shear amount of online purchases that are made now. Many of us go to a store to look at a product then go home and purchase it online with free shipping and no taxes. We work hard for our money and we want the best product for the best price when we make a purchase. It’s simply difficult for a company with the overhead costs of maintaining brick and motor stores to complete with the pricing that online retailers can offer.
Don’t expect these Sears closings to spell the end for the company just yet. Repositioning takes time and is often painful. No one at Sears is claiming to throw in the towel no matter what the talking heads (alleged experts) on TV might have to say. Sears is a company with a lot of history in this country and there are a many people that are willing to fight to return it to profitability. Sears Holding Company (Sears, Kmart, and all subsidiaries) currently employs just under 250,000 people.
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