Skip to main content

What Recovery? Sears And J.C. Penney Are Dying

 

Two of the largest retailers in America are steamrolling toward bankruptcy.  Sears and J.C. Penney are both losing hundreds of millions of dollars each quarter, and both of them appear to be caught in the grip of a death spiral from which it will be impossible to escape.  Once upon a time, Sears was actually the largest retailer in the United States, and even today Sears and J.C. Penney are "anchor stores" in malls all over the country. 

 

When I was growing up, my mother would take me to the mall when it was time to
go clothes shopping, and there were usually just two options: Sears or J.C.
Penney.  When I got older, I actually worked for Sears for a little while.  At
the time, nobody would have ever imagined that Sears or J.C. Penney could go out
of business someday.  But that is precisely what is happening. 
They are
both shutting down unprofitable stores and laying off employees in a desperate
attempt to avoid bankruptcy, but everyone knows that they are just delaying the
inevitable.  These two great retail giants are dying, and they certainly won't
be the last to fall.  This is just the beginning.

 

The Death Of Sears

 

Sales have declined at Sears for 27 quarters in a row, and the legendary retailer has been closing hundreds of stores and selling off property in a frantic attempt to turn things around.

Unfortunately for Sears, it is not working.  In fact, Sears has announced that it expects to lose "between $250 million to $360 million" for the quarter that will end on February 1st.

Things have gotten so bad that Sears is even making commercials that openly acknowledge how badly it is struggling.  For example, consider the following bit of dialogue from a recent Sears television commercial featuring two young women...

 

"Wait, the movie theater is on the other side," the passenger says.

 

"But Sears always has parking!" the driver responds.

 

Sears always has parking???

Of course the unspoken admission is that Sears always has parking because nobody shops there anymore.

 

A couple of months ago I walked into a Sears store in the middle of the week and it was like a ghost town.  A few associates were milling around here and there having private discussions among themselves, but other than that it was eerily quiet.

 

You can find 18 incredibly depressing photographs which do a great job of illustrating why Sears is steadily dying right here.  This was once one of America's greatest companies, but soon it will be dead.

 

The Death Of J.C. Penney

 

J.C. Penny has been a dead man walking for a long time.  In some ways, it is in even worse shape than Sears.

 

If you can believe it, J.C. Penney actually lost 586 million dollars during the second quarter of 2013 alone.

 

How in the world do you lose 586 million dollars in three months?

Are they paying employees to flush giant piles of cash down the toilets?

This week J.C. Penney announced that it is eliminating 2,000 jobs and closing 33 stores.  The following is a list of the store closings that was released to the public...

 

In the immediate aftermath of that announcement, Best Buy stock was down more than 30 percent in pre-market trading.

 

And Macy's just announced that it is laying off 2,500 employees in an attempt to move in a more profitable direction.

 

So why is all of this happening?

 

Aren't we supposed to be in the midst of an "economic recovery"?

 

That is what the Obama administration and the mainstream media keep telling us, but it is simply not true.

 

In fact, a new Gallup survey has found that the number of Americans that are "financially worse off" than a year ago is significantly higher than the number of Americans that say that they are "financially better off" than a year ago...

 
 

More Americans, 42%, say they are financially worse off now than they were a year ago, reversing the lower levels found over the past two years. Just more than a third of Americans say their financial situation has improved from a year ago.

That is why these stores are dying.

Things continue to get even worse for the middle class.

 

Read the rest of the story

 

http://www.zerohedge.com/news/...-jc-penney-are-dying

 

 

 
 
Original Post

Replies sorted oldest to newest

For me , the question any more is "why even go to Sears ?"

Back when I was a kid, even until I was about 40 , Sears would send a yearly catalog which almost everybody referred to as the "wish book". Anything bought at Sears had a 100% money back guarantee if you didn't like whatever you bought . 

Well, they stopped even pringing the wish book, and their once excellent made in America tools are now Chinese. I had a Craftsman vice which broke. Looked at the stamp , and "made in China". I took it back to trade for an unbroken one, but they don't take broken stuff back anymore.

Lowes brand tools are lifetime guaranteed now, and Lowes, and Walmart both have a money back policy . Sears stuff used to be basically cheaper than most other places, but now it is more expensive.

So, that leaves me to wonder, why even go to Sears ?
I never bought anything at JC Penny that I was happy with, so no point in going there. Penny used to be a general purpose store, not that much unlike Sears, but has become just a dry goods store. No reason to go there either.

 

 

1.  Sears was dieing 10 years ago.  For most of the 00s the only reason they were profitable was because of the real estate they owned around the country.  real estate was also the reason why they acquired Kmart.  The property bubble is gone, and so is their profit.

 

2.  JCPenney's issues are also well documented.  Management turnover, people not understanding their 'fair price' plan, store with a store concepts forcing them to have less merchandise, etc.  incompetent management is what's killing them.

 

4. Best Buy's issue is people using them as a showroom to buy from Amazon, again, this was happening long before 2008.  They seemed to have a plan, like matching online prices, but they executed core parts of it poorly.  Did you know that Best Buys were open to midnight, or were 24 hours the last week before Christmas?  Most people didn't.   The stock drop was because they admitted that the sales they had wasn't enough to justify the personal costs. 

 

5.  As for Macy's this is where the author's bias is showing.  he completely ignored the majority of their statement on Christmas sales, such as they were pleased with them, and that the cuts were to preserve their profit margin and to improve efficiency.

 

Macy's has a good management team, who have been very proactive in taking care of issues before it hurts their bottomline, and the market rewarded them with the above announcement.  stock went up 6.4% with the news.    "The end result is extremely favorable, proactive, what you'd expect from a heads up management such as Macy's," said Bernie Sosnick, an analyst with Gilford Securities.

the real challenge is jobs are dying. More people are buying on line which takes away from local jobs.

more stores are using self check out, which takes jobs away. we all need to find ways to reinvest in our local areas. They may not be high paying jobs, but they are jobs. Don't buy cars , electronics, etc from out of town, keep your money local.

Just think where Sears would have been had the internet been around 15 years earlier.  They were the original buy from home mail order operation.   The Cool Springs (TN) store has been shut down, and the space is being subdivided into small stores.

 

Unfortunately, K Mart will be going the same way as Sears as they're the same company.  See how quiet our K Mart store in Florence is--actually a positive purchasing experience.

 

And J.C. Penny's merchandise is just not high quality.  They have good home goods and draperies, but that's about it.  We'll be eventually saying "adios" to JCP as well.

 

Only Target has had the marketing ability, products and great locations to be a secondary competitor to Wal Mart.

Originally Posted by 1130:

the real challenge is jobs are dying. More people are buying on line which takes away from local jobs.

more stores are using self check out, which takes jobs away. we all need to find ways to reinvest in our local areas. They may not be high paying jobs, but they are jobs. Don't buy cars , electronics, etc from out of town, keep your money local.

The same thing was said when blacksmiths, glass blowers and shoe cobblers were put out of business. 

The same thing was said when blacksmiths, glass blowers and shoe cobblers were put out of business.

 

Modern blacksmith

 

 

 

 

 

A shoe cobbler is a craftsman or woman who specializes in repairing shoes. Traditionally, these individuals also made shoes, although most modern ones focus on repair and restoration, not the manufacture of new shoes. Many communities around the world have cobblers, and in areas where one is not practicing, people can ship or mail shoes for repair and restoration. Using the services of a cobbler can generate substantial savings, as he or she can repair a pair of shoes for the fraction of the cost of a replacement pair.

 

Cobblers have been working with shoes for centuries, and cobbling is one of the oldest professions in the world.

 

 

 

 Glass Blower

Glass Blowing art

 

Last edited by Bestworking
Originally Posted by 1130:

the real challenge is jobs are dying. More people are buying on line which takes away from local jobs.

more stores are using self check out, which takes jobs away. we all need to find ways to reinvest in our local areas. They may not be high paying jobs, but they are jobs. Don't buy cars , electronics, etc from out of town, keep your money local.

_______________________________________

How much of electronics or cars are made in the Shoals area?.

http://www.aol.com/article/201...n-business/21384323/

I knew tougher times were coming for Sears and one extremely bad omen was the decision to close the Florence Mall Store at 6PM even though the Mall remains open until 9PM.  In  my last trip to Sears I saw a store that looked like it was about to have a fire sell and with the exception of the Tool/Hardware department and Appliance department Sears appeared to be giving up on other departments such as Electronics. 

It can be argued that online stores like amazon.com and the combination of specific retailers like HH Greg and Best Buy hurt Sears greatly I believe that Sears made a bold, potentially bad, move years ago by diversifying their appliance business to try and compete head to head against other vendors that sold several brands.

Sears used to be known for Craftsman, lifetime warranty, tools and their quality as well as for Kenmore appliances that were manufactured to Sear's standards and specifications.  Now it seems that the Lifetime warranty of Craftsman will only mean the lifetime of Sears rather than the tools themselves.  Another omen for Sears was when there was a defective tool rather than replace it outright Sears had their employees to attempt to repair the tool onsite by swapping out parts in an attempt to save money.  Sears used to also have a iron clad policy "Satisfaction Guarnteed or your Money Back" and if you visit the Sears store you can still see remnants of that slogan atop the window above the Southern entrance door.  Sadly though the policy died somewhere along the line.  Granted Walmart's return policy used to be more liberal and generous also along with dealing in "made in America" but things there changed also.

For those of you who remember Radio Shack, in it's heyday you could count on specific Radio Shack only products, electronics, Stereos, Radios etc, under the name "Archer" or "Realistic" but then Radio Shack decided to do away with their brand products and diversify their brands that they offered but that didn't help them stay alive either.  Now discreet electronic parts are like Dinosaurs, impossible to find and relics of the past. 

For those in the Stock market it might be time for a short sell of Sears/Kmart stock if you can ever find a time that it goes in the positive direction again.  I think and fear that the Sear's turkey is done.

  

Last edited by gbrk

Add Reply

Post

Untitled Document
×
×
×
×
Link copied to your clipboard.
×