This could be Sears and Kmart’s last holiday shopping season

New York (CNN Business) – This “Black Friday” will most likely be the beginning of the final holiday shopping season for Sears and Kmart, two brands that once proudly dominated the US retail landscape.
The two chains are just a shadow of what they were when the conglomerate that owns them emerged from bankruptcy less than three years ago.

At the time, the conglomerate, which got the overly optimistic name Transformco, still had 223 Sears and 202 Kmart stores nationwide. That was already 87% less than the 3,500 stores the two brands owned when they merged in 2005 to form Sears Holdings. But the percentage drop in stores since the company emerged from bankruptcy in February 2019 has been even steeper.

Today there are only 21 full-line Sears stores left in the continental United States, and two more in Puerto Rico, according to the store locator on the Sears website, after the recent closings are removed. Seven other stores listed on the site are limited to selling appliances and, in some cases, mattresses, rather than the full range of offerings that was once a hallmark of both chains.

And by the end of the year, only six Kmarts will remain in the continental United States, along with six others in Puerto Rico, Guam and the Virgin Islands.

“It has always seemed like a liquidation to me. This has been going on for years,” said Reshmi Basu, a retail bankruptcy expert at Debtwire.

Many retail experts blame Eddie Lampert, the main owner of Transformco and Sears Holdings, for the disappearance of two chains.

“He’s letting the leases expire, he’s ditching the stores. He’s keeping them open if it’s convenient for them to stay open,” said Mark Cohen, director of retail studies at Columbia University. “Obviously, they’re all going to disappear shortly. You can count on it.”

Sears and Kmart aren’t the only retailers struggling with shifting shopping habits to large retailers like Walmart and Target, and to online retailers like Amazon. JCPenney and Neiman Marcus filed for bankruptcy when the pandemic hit in 2020, and Lord & Taylor went bankrupt.

But Lampert’s critics say he’s to blame for both companies’ steep decline, as he invested little in the stores themselves, and sold much of the hottest real estate and brands Sears once owned, such as tools. Craftsman, Diehard and Lands End auto parts.

“It’s been in terminal decline for quite some time,” said Neil Saunders, managing director and retail analyst at research firm GlobalData.

There is little chance of saving either chain in today’s retail environment. Vendors are having trouble supplying much stronger retailers with the inventory they need, given current supply chain issues. That makes it harder for Sears or Kmart to have the products that shoppers want.

“We know that suppliers are prioritizing their deliveries. They are delivering to the points of sale that add the most value to the brand,” said Greg Portell, senior partner in the global consumer practice at consulting firm Kearney.

And the job market, with a near-record number of job openings, only makes it difficult for struggling chains to attract the workers they need.

“The war for talent in retail is very real right now. Not only are they raising the hourly wage, but they are looking for other elements to attract workers like college tuition, benefits, things that Sears and other retailers with problems will have a hard time matching, “Portell said.

If this is truly the end, it would be a sad demise for two chains dating back to the late 1800s.

Kmart began in 1899, when founder Sebastian Spering Kresge opened a nickel store in downtown Detroit named after him. The Kmart brand didn’t emerge until 1962. The chain grew rapidly over several decades, reclaiming the discount segment of the market now dominated by large stores like Walmart and Target.

Kmart became known for its 15-minute “blue light deals”: A store would turn on a blue light and announce “attention Kmart shoppers” over the loudspeaker, and customers would rush to buy discounted items. Promotions began in 1965, but were discontinued in 1991, although Kmart has tried to bring them back on several occasions.

The history of Sears is even longer. The company was once the largest retailer in the country, the Walmart or Amazon of its time. At a time when most Americans lived in rural areas, its catalog enabled many consumers to buy goods that they would not have otherwise had access to.

Sears stores dominated the retail landscape, forcing many local stores to close in the same way that large retailers would one day cause department stores to close. Many Sears were the anchor of the shopping centers that contributed to the growth of the American suburbs. It was literally a company that changed America.

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