My husband works in one of the few Sears stores left with continuously strong sales, yet his GM told him there's a possibility they'll be closing early next year. WTF?
What exactly is the criteria for store closings if not sales? Why close one of the few stores that are making good money for them? This makes no sense to me...
All of the Sears properties, whether entirely owned by Sears or rented / leased, will close. Several known facts in life:
The Earth is a sphere, and not flat.
Sears is a Real Estate and Holding Company. Sears is unimportant and NOT a retail store.
The plan by the Sears CEO, which is similar to Investors, is to CLOSE all Sears stores
Very few people like to visit Sears stores, now, because the stores are filthy and sell cheap junk.
None of this is rocket science or suprising, unless you've lived in a cave during the past 10 years.
@3odc Sears Holdings is starting to become more of a real estate company than a retail company. This slow decline has been going on for years, and it probably started even before Lampert took over. Sears and Kmart were 1-2 in sales in the 1980s, but failure to invest in stores as competitors came into the marketplace and/or invested in redoing their stores hurt both companies big time
@211k You're 100% correct. The little part that deals with sales is the more sales that are generated the more attractive the property is to buyers so Sears can sell the property for more money. Sears Holdings is a Real Estate Company not a retail company. Sears Holdings makes money by selling real estate.
It really has little to do with sales. Its all about the value of the property or the lease terms.
The Kroger marketplace sells sporting goods
That number one Kmart had insane numbers. The company closed it because it would take five years of running that store to get the money it got in one lump sum from Kroger. Penny wise, pound foolish... maybe. Or, perhaps there was a belief a Super Mega Kroger ( selling everything Kmart sells except for sporting goods ) nearby would kill the Kmart store in that same five years.
OP it’s all about the value of the property - if someone else wants it then it will be closed.
They closed the number one Kmart in the country (highly profitable) so Kroger could get the property.
My SM is so delusional. The other day he was excited that we were 2% up to last year for one day, never mind we have been down double digits for months! Gotta love the koolaide in this place. Yay, a huge store like ours did 12,000 instead of 11,999. What a joke. Most "real" stores do what my store does in a day in a single department.
Most of the prime real estate has been closed or spun off to seritage. He likes to close a few A stores to keep the wheels churning on his ponzi scheme. Eddies plan from the beginning to ensure he will be ok in bankruptcy. Now to make up the debt are the rest of the leftover dead ghetto kmart stores and sears in the hood. They probably loose more in theft than actual sales without any assest protection. They will probably be in the next wave of closures as it is cheaper to close them than renew the leases. Eddie will keep a few A stores until the end to keep his dream going.
@fgv So you can assume that no matter how good the store is doing Sears will end up screwing the workers in that store (depending if their is more profits in leasing the store or selling it). Its really sad another thing OP should look into is they are making money, but are they making as much money as years before. My store was one of the most profitable stores, but as of now our sales are way in the ground. Just makes me wonder what exactly is going to happen in January in my store and the overall corporation.
When a company is in deep do do anything is possible. They owe a lot of money coming in the new year. The sale/leasing etc of the 140 PREMIC stores will fund the pension for two years....that should be announced soon as to what is happening.
Our store was a SHC owned store and we were #1 in our district in sales and we made a profit. But we closed a year ago and the store is just sitting there but I heard they are dividing it up into four retail spaces and leasing it to other tenants. It really doesn't matter if your store makes money or not. The determining factor is if SHC can get more if they close it and redevelpe it through the REIT (Seritage) or if they can sub-lt the space for more money per square foot. This last idea is what is happening in many of the mall Sears. They will close two of the three floors and rent the other floors to places like d---s sporting goods or Dave and Busters etc.
Some of the attitude on here. Gee. She was just asking Why a Profitable Store might close. Some of the answers are correct. It's the VALUE of the property's location but it does seem counterintuitive. If you were really trying to save the Sears brand ...
Are the sales strong enough to make up for a billion dollar a month shortfall? I'm guessing not.
I don't think you understand the dire state of Sears' circumstances right now. Maybe you should do some reading and then some math.
My particular location is owned, the building and the land it sits on. However, the building is landlocked because the easements are owned by the mall the store is attached to.
The store is not doing well and isn't turning a profit, yet 35 miles up the road there was a more thriving A store (also owned) which had closed.
Not very many profitable locations exist. Ironically, it seems like the dead stores with no prospects of a lucrative real estate deal will be sticking around until the company folds.
All of the stores that are/were better performers are closing MUCH faster than those that are not. It is usually because those stores are located in an area with good prospects for another retailer, which primarily buy/lease former Sears stores.
The bad performers are usually attached to a dead mall and/or are located in an economically challenged community. No one will buy those.
The more successful the store is the more valuable it is. Therefore you can get more money for the store when you sell it. The company is extracting the maximum amount of money they can out of the real estate. It's all about current cash flow and liquidation. No property is safe.
Sometimes too it depends upon whether or not Sears owns the land the store is sitting on or whether they are renting the space. This factors in with Eddies REIT and what to do with properties and whether it is worth it to lease space for a store or just to close up.
Ya our sears store doesn’t make sales on a daily basis.but out SM says every day we are doing best in district and region.we need to close we have bad management in our store the worst I have ever seen.been here since we opened this store and that was almost 14 years ago and retail for 32 years .there is a big problem with the managers that sears bring in or they just transfer a bad manager to another store instead of taking care of problem..get rid of them!!!
If the company as a whole is losing money , it really doesn't matter what sales a handful of stores can generate.
The value of the real estate is also a determining factor. Can Seritage make more in leasing the space to someone other than Sears. It's always been about real estate and not retail.
First of all I know this lady's husband and let me tell you what a piece of cra*p this guy is. Lazy omg he is the laziest blob in the history of Sears.
If your store costs more to run than they earn it's possible that the store will close. Even if your store generates 100 million in sales but it costs 175 million to run it doesn't matter. Your store is losing 75 million. Those numbers are really exaggerated but hopefully you get my point.
Get with it. They are all going to close. Where the he'll have you been?