Hey, the sun’s out,
The decision by Sears Holdings to file for Chapter 11 bankruptcy protection marks the end of the era.
There is a chance Sears will emerge out of the filing in shrunken form, but retail bankruptcies are complex affairs with outcomes that are far from assured.
Witness the demise of Bon Ton, a collection of small and mid-market department stores that filed for Chapter 11 in Delaware and eventually underwent liquidation.
Younger shoppers will shrug their shoulders at the news. Older folks will feel some nostalgia for days gone by, but many will have to admit they have not darkened the door of a Sears or Kmart in years.
A Sears store was once a sign that a town in small-town America mattered and a job at a store was a ticket to a better life. Even small-town store managers could retire as millionaires (thanks to a stock plan) and an appliance salesperson or repairman could live a comfortable existence.
The small-town store was an extension of the iconic catalog that was a mainstay of many households and a pain to parents when its toy selection showed up before the holidays.
Somehow, Sears managed to make the catalog business unprofitable and shut it down, even before online became king.
Meanwhile, the Chicago company that came up with the Discover Card and Allstate Insurance, lost its way in spectacular fashion as it shed non-retail businesses that were generating profits.
Sears was slow to adapt to changes in retailing that included suburban malls.
In Delaware, Sears was a no-show at Christiana Mall, one of the nation’s most profitable shopping centers per square foot. It remained content with the Prices Corner location and later added a store at Concord Mall.
Still, the company remained a sizable employer in the state as it held on to a large chunk of the appliance and other types of repair businesses for years.
The company, never one to refrain from launching a new venture, opted for franchises. Many were successful, but the tarnished Sears brand proved to be a drawback for owners.
Eddie Lampert, one of those masters of the universe type investors who some saw as the Warren Buffett of the future, thought he had a can’t miss situation when he merged Kmart and Sears.
He figured a modest turnaround would buy time to ride the cycle. After all, the company had iconic brands like Kenmore and Craftsman and lots of prime real estate that could be sold off when necessary.
But Lampet did not see the online retailing train coming down the tracks. Meanwhile, he oversaw a long-running going out of business sale. Shockingly enough, Sears may no longer be on the list of the 25 largest retailers.
Big boxes also did their part and the Sears store network was often wedded to malls at a time when customers were looking for free-standing locations.
Kmart was in equally bad shape with aging stores often in declining neighborhoods. It failed to follow Target and Walmart in aggressively moving into the grocery business. Then again, Lampert by this time putting was grudgingly putting up his own money into the company.
Of late, the pace of store closings accelerated, even in Delaware, a state where the lack of a sales tax usually provides a boost.
One hopes Sears can find a way out. Without Lampert at the helm, there is a chance, but the odds are not in the company’s favor – Doug Rainey, publisher.
