Uh, oh: Now It's Sears & Kmart
The bad news just never seems to stop. CNN reports that Sears is planning on closing a number of its stores around the country, Kmarts included. Sears owns Kmart.
We can only hope our local Sears is doing as well as Pay-n-Pak used to do here. Supposedly the Eureka Pay-n-Pak was the only store they had that made money. We'll have to keep our eyes open for which stores get the axe.
posted by Fred Mangels @ 6:45 AM
5 comments
5 Comments:
If I were to pick stores likely to close due to lack of value to consumers, K-Mart and Sears would be near the top of my list. It's as if they don't understand their own industry.
I'm no shopper, but I always liked having Sears here. I didn't go there often but figured it was one place to go if I needed to buy certain things and expect a decent deal.
From the CNN article, they make it sound like it would be mostly Kmart stores that will get the axe, but the wife was saying she thought she heard a while back Sears would go and Kmart would stay. Who knows?
That article also said Kmarts are having trouble with competition from Target and Walmart. I would think the new Walmart would be the end of Kmart, if that's true.
Sears says they'll post the list of stores which will close here: http://www.searsmedia.com/. Currently there is a comment about it in red type on right side of that page.
I wonder if we'll lose one, both or neither... Time will tell.
The funny part of the AP story is the first sentence, "Sears Holdings Corp. plans to close between 100 and 120 Sears and Kmart stores to raise cash after a weak holiday shopping season for the retailer."
Retail stores are how the corporation makes money. If it has 100 to 120 stores not turning a profit, it should have closed them long ago, as soon as they realized the stores were chronic failures. Or, it should have worked to make them profitable.
The way out of a downward slide is to invest heavily in yourself, beef up your operation, not shrink it haphazardly with bulk closings. This point isn't readily apparent because the corporations that practice it don't make news headlines for remaining profitable.
Bye bye Sears and K-Mart. I give you two years before your whole boat sinks.
Retail stores are how the corporation makes money. If it has 100 to 120 stores not turning a profit, it should have closed them long ago, as soon as they realized the stores were chronic failures. Or, it should have worked to make them profitable.
You're oversimplfying the solution.
First of all, not all money made by a corporation are from brick and mortar stores. Websites account for a sizable chunk of sales since it's a worldwide store open 24 hours a day, without having to pay mall rent, insurance, wages, property taxes, etc.
Second, the decision to close a location can take years in some cases. A store may have done very well one quarter, was down the next, was back up the next, and so on. Maybe it did well overall last year and/or the year before, but this year absolutely sucked. Long-term sales trends don't happen overnight.
Third, maybe a few of these locations had long-term leases that were more expensive to break than to keep, so the decision was made to keep the location open at a loss.
Fourth, how do you know they didn't try to "work to make them profitable"? You can't force the public to respond to sales or new marketing. Marking down a shirt from $25 to $2 doesn't mean someone will buy it.
Let's say you owned 100 stores in the state, and 25 of them were underperforming. What would you do? Would you close them immediately? Or try to make them work? If nothing worked, do you keep them open anyway? Or do you finally decide to cut your losses?
Guess what? This is exactly what Sears and Kmart are doing.
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