05 January 2018

MARKET - Sears Closes 64 Kmart and 39 Sears Branded Outlets

In a tersely worded release yesterday, Sears Holdings adjusted the physical footprint they control in America by closing 103 outlets:

Sears Holdings continues its strategic assessment of the productivity of our Kmart and Sears store base and will continue to right size our store footprint in number and size. In the process, as previously announced we will continue to close some unprofitable stores as we transform our business model so that our physical store footprint and our digital capabilities match the needs and preferences of our members.
The company informed associates at 64 Kmart stores and 39 Sears stores that we will be closing these stores between early March and early April 2018.
The full text of the Sears press release and list of outlets and service centeres being closed is available HERE.

According to industry reports Sears is struggling to survive competitive pressures from larger low-cost (discount) retailers and e-commerce. It has high levels of debt and has not been very agile in its response to poor profitability and dwindling consumer demand. Macy's and other similar retailers face the same pressures and are adjusting the 'physical footprint' they control.
"Is it not ironic, the largest catalogue retailer in the history of America has 'had their ass handed to them' by an organization that figured out how to execute order buying and home delivery better, faster and cheaper than Sears ever did."
"About the only way to add insult to this injury, would be for an ecomm retailer to set up HQ2 in a very tall building in Chicago."
In view of the place Sears held in the development of retail services across America, some of the remarks being shared around the globe seem disrespectful. However the disruption of the retail sector is real and is accelerating. The list of retailers who haven't figured out the paradigm shift and are no longer in a viable business is growing.

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