Is 2021 finally the end for Sears/Kmart?

Predicting the demise of Sears & Kmart since 2017!
arizonaguy
Store Manager
Store Manager
Posts: 1107
Joined: July 12th, 2013, 6:07 pm
Been thanked: 35 times
Status: Offline

Re: Is 2021 finally the end for Sears/Kmart?

Post by arizonaguy »

storewanderer wrote: November 30th, 2021, 12:19 am
retailfanmitchell019 wrote: November 29th, 2021, 8:45 pm
Jack Welch's failed model of management also led to the collapse of Albertsons Inc. Larry Johnston came from GE's European division and I'm sure applied the GE model of management.
I'd say Walmart today is like Sears or Kmart 30 years ago. At its peak, but could start to do major store purges in 10 years. My question is, what ailing retailer will we talk about once Sears/Kmart is toast?
Department store chains will continue to be a topic, and I think drugstore chains are going to hit an ugly period in the next few years.

Also I think the dollar store sector may continue to be a topic.

We will see what happens with Wal Mart. Looking at their stores the past 9 months it feels like they are poised to fail. But I don't think they will fail.
Walmart has diverted a lot of attention from its stores to the online space over the past 5 years. When they first started this strategy, I thought it was doomed to failure. In light of the pandemic it appears it was the right call. Even though they seem to be fairly rigid about some parts of their organization, they aren't stubborn and aren't afraid to try things that are high risk / high reward like Kmart was towards its end.
Super S
Posts: 2690
Joined: April 1st, 2009, 9:27 pm
Has thanked: 11 times
Been thanked: 61 times
Status: Offline

Re: Is 2021 finally the end for Sears/Kmart?

Post by Super S »

storewanderer wrote: November 30th, 2021, 12:19 am
retailfanmitchell019 wrote: November 29th, 2021, 8:45 pm
Jack Welch's failed model of management also led to the collapse of Albertsons Inc. Larry Johnston came from GE's European division and I'm sure applied the GE model of management.
I'd say Walmart today is like Sears or Kmart 30 years ago. At its peak, but could start to do major store purges in 10 years. My question is, what ailing retailer will we talk about once Sears/Kmart is toast?
Department store chains will continue to be a topic, and I think drugstore chains are going to hit an ugly period in the next few years.

Also I think the dollar store sector may continue to be a topic.

We will see what happens with Wal Mart. Looking at their stores the past 9 months it feels like they are poised to fail. But I don't think they will fail.
Retailers that come to mind:
JCPenney: They still seem to be struggling, but at least are giving the impression that they are trying to stay in business with advertising etc. They have been experimenting with different formats/merchandise with mixed results...appliances was a flop.

Walgreens: This chain looks like they are headed for trouble. Some areas have too many locations close together, and many aren't being maintained well and are showing signs of disrepair, and random locations are closing with not much notice.

Rite Aid: This chain seems to be making an effort to change their image with the new signage as well as remodels of their older stores. Their stores lately are looking much better, but pricing is still high. It remains to be seen how the acquisition of Bartell plays in to things.

Safeway: They are an established chain, but prices are high and you have to jump through a lot of hoops for decent prices. Stores are being "cheapened" with bad lighting among other things. If other chains expand their presence they could ultimately start losing some business. Ditching the card program would be a good place to start.

Fred Meyer: This part of Kroger has not expanded much recently, and we have talked about how the general merchandise side seems to be slipping. They seem to run the grocery side well but not much else.

Walmart: They will do ok for a while, particularly in smaller towns where there are few options. They are essentially today's version of what Kmart was in their heyday. They are still remodeling and updating stores.

Nordstrom: The high-priced department store seems to be gradually fading away and I could see them moving to the "Rack" format exclusively at some point to survive.

Macy's: This chain has an identity crisis and needs to figure itself out. At the very least they need a better selection to justify their higher prices.

Bi-Mart: They are exiting the pharmacy business. How this affects the rest of the store operations remains to be seen, but they do have some strong points in their merchandise mix.

And I am going to go on a limb: Auto Parts chains such as Auto Zone and O'Reilly, in about 10-15 years. These two have heavily expanded their presence, but as vehicles are becoming more complex, and there is a push to electric vehicles (which I do not agree with) there is going to be less of a do it yourself market and the chains will need to focus more on commercial (repair shop) sales. I wouldn't be surprised if these chains end up closing some locations. Some electronic components require programming by shops/dealers when replacing in order to function properly. And vehicles are becoming very specific when it comes to things like transmission fluid and coolant. One local parts store has at least ten different formulas/colors of antifreeze alone. And, at least in Washington, the recently banned the sale of small cans of refrigerant, effectively pushing away the do it yourself A/C repair market.
TW-Upstate NY
Shift Manager
Shift Manager
Posts: 421
Joined: May 11th, 2009, 6:09 pm
Been thanked: 4 times
Status: Offline

Re: Is 2021 finally the end for Sears/Kmart?

Post by TW-Upstate NY »

retailfanmitchell019 wrote: November 29th, 2021, 8:45 pm Jack Welch's failed model of management also led to the collapse of Albertsons Inc. Larry Johnston came from GE's European division and I'm sure applied the GE model of management.
Also don't forget Bob Nardelli who almost wrecked Home Depot (and walked away with $210 Million for his efforts.) Another guy who thought that Sigma Six was a one size fits all approach to management. Selling turbines (he was head of GE Power Systems) and plywood and paint are not exactly the same thing.
DFWRetaileWatcher
Cashier
Cashier
Posts: 81
Joined: April 24th, 2021, 8:58 pm
Status: Offline

Re: Is 2021 finally the end for Sears/Kmart?

Post by DFWRetaileWatcher »

Super S wrote: November 30th, 2021, 8:29 am
storewanderer wrote: November 30th, 2021, 12:19 am
retailfanmitchell019 wrote: November 29th, 2021, 8:45 pm
Jack Welch's failed model of management also led to the collapse of Albertsons Inc. Larry Johnston came from GE's European division and I'm sure applied the GE model of management.
I'd say Walmart today is like Sears or Kmart 30 years ago. At its peak, but could start to do major store purges in 10 years. My question is, what ailing retailer will we talk about once Sears/Kmart is toast?
Department store chains will continue to be a topic, and I think drugstore chains are going to hit an ugly period in the next few years.

Also I think the dollar store sector may continue to be a topic.

We will see what happens with Wal Mart. Looking at their stores the past 9 months it feels like they are poised to fail. But I don't think they will fail.
Retailers that come to mind:
JCPenney: They still seem to be struggling, but at least are giving the impression that they are trying to stay in business with advertising etc. They have been experimenting with different formats/merchandise with mixed results...appliances was a flop.

Walgreens: This chain looks like they are headed for trouble. Some areas have too many locations close together, and many aren't being maintained well and are showing signs of disrepair, and random locations are closing with not much notice.

Rite Aid: This chain seems to be making an effort to change their image with the new signage as well as remodels of their older stores. Their stores lately are looking much better, but pricing is still high. It remains to be seen how the acquisition of Bartell plays in to things.

Safeway: They are an established chain, but prices are high and you have to jump through a lot of hoops for decent prices. Stores are being "cheapened" with bad lighting among other things. If other chains expand their presence they could ultimately start losing some business. Ditching the card program would be a good place to start.

Fred Meyer: This part of Kroger has not expanded much recently, and we have talked about how the general merchandise side seems to be slipping. They seem to run the grocery side well but not much else.

Walmart: They will do ok for a while, particularly in smaller towns where there are few options. They are essentially today's version of what Kmart was in their heyday. They are still remodeling and updating stores.

Nordstrom: The high-priced department store seems to be gradually fading away and I could see them moving to the "Rack" format exclusively at some point to survive.

Macy's: This chain has an identity crisis and needs to figure itself out. At the very least they need a better selection to justify their higher prices.

Bi-Mart: They are exiting the pharmacy business. How this affects the rest of the store operations remains to be seen, but they do have some strong points in their merchandise mix.

And I am going to go on a limb: Auto Parts chains such as Auto Zone and O'Reilly, in about 10-15 years. These two have heavily expanded their presence, but as vehicles are becoming more complex, and there is a push to electric vehicles (which I do not agree with) there is going to be less of a do it yourself market and the chains will need to focus more on commercial (repair shop) sales. I wouldn't be surprised if these chains end up closing some locations. Some electronic components require programming by shops/dealers when replacing in order to function properly. And vehicles are becoming very specific when it comes to things like transmission fluid and coolant. One local parts store has at least ten different formulas/colors of antifreeze alone. And, at least in Washington, the recently banned the sale of small cans of refrigerant, effectively pushing away the do it yourself A/C repair market.
It's funny you mention Auto Parts chains. They underwent a massive expansion the past 1-2 decades and are now way overstored.

It's not going to be pretty (with all of their real estate) if they go belly up.

As far as Walmart, there's always going to be a place for a brick & mortar discount retailer, as there are some things that are just best bought in-person. As long as they can continue to beat their competition in pricing, they'll be fine. However, I do think they're also overstored.
ClownLoach
Valued Contributor
Valued Contributor
Posts: 2694
Joined: April 4th, 2016, 10:55 pm
Has thanked: 40 times
Been thanked: 289 times
Status: Offline

Re: Is 2021 finally the end for Sears/Kmart?

Post by ClownLoach »

DFWRetaileWatcher wrote: November 30th, 2021, 6:17 pm
Super S wrote: November 30th, 2021, 8:29 am
storewanderer wrote: November 30th, 2021, 12:19 am

Department store chains will continue to be a topic, and I think drugstore chains are going to hit an ugly period in the next few years.

Also I think the dollar store sector may continue to be a topic.

We will see what happens with Wal Mart. Looking at their stores the past 9 months it feels like they are poised to fail. But I don't think they will fail.
Retailers that come to mind:
JCPenney: They still seem to be struggling, but at least are giving the impression that they are trying to stay in business with advertising etc. They have been experimenting with different formats/merchandise with mixed results...appliances was a flop.

Walgreens: This chain looks like they are headed for trouble. Some areas have too many locations close together, and many aren't being maintained well and are showing signs of disrepair, and random locations are closing with not much notice.

Rite Aid: This chain seems to be making an effort to change their image with the new signage as well as remodels of their older stores. Their stores lately are looking much better, but pricing is still high. It remains to be seen how the acquisition of Bartell plays in to things.

Safeway: They are an established chain, but prices are high and you have to jump through a lot of hoops for decent prices. Stores are being "cheapened" with bad lighting among other things. If other chains expand their presence they could ultimately start losing some business. Ditching the card program would be a good place to start.

Fred Meyer: This part of Kroger has not expanded much recently, and we have talked about how the general merchandise side seems to be slipping. They seem to run the grocery side well but not much else.

Walmart: They will do ok for a while, particularly in smaller towns where there are few options. They are essentially today's version of what Kmart was in their heyday. They are still remodeling and updating stores.

Nordstrom: The high-priced department store seems to be gradually fading away and I could see them moving to the "Rack" format exclusively at some point to survive.

Macy's: This chain has an identity crisis and needs to figure itself out. At the very least they need a better selection to justify their higher prices.

Bi-Mart: They are exiting the pharmacy business. How this affects the rest of the store operations remains to be seen, but they do have some strong points in their merchandise mix.

And I am going to go on a limb: Auto Parts chains such as Auto Zone and O'Reilly, in about 10-15 years. These two have heavily expanded their presence, but as vehicles are becoming more complex, and there is a push to electric vehicles (which I do not agree with) there is going to be less of a do it yourself market and the chains will need to focus more on commercial (repair shop) sales. I wouldn't be surprised if these chains end up closing some locations. Some electronic components require programming by shops/dealers when replacing in order to function properly. And vehicles are becoming very specific when it comes to things like transmission fluid and coolant. One local parts store has at least ten different formulas/colors of antifreeze alone. And, at least in Washington, the recently banned the sale of small cans of refrigerant, effectively pushing away the do it yourself A/C repair market.
It's funny you mention Auto Parts chains. They underwent a massive expansion the past 1-2 decades and are now way overstored.

It's not going to be pretty (with all of their real estate) if they go belly up.

As far as Walmart, there's always going to be a place for a brick & mortar discount retailer, as there are some things that are just best bought in-person. As long as they can continue to beat their competition in pricing, they'll be fine. However, I do think they're also overstored.
The auto parts consolidation is already starting to gain steam. Pep Boys under private equity has split the company in two - a service center company and a store company. The stores are going away, one chunk at a time until they're all gone and the brand will only be on car service centers. The California stores have all been sold to Advance Auto Parts which did not have a California presence. Around me the Pep Boys buildings have already liquidated all parts and are being (cheaply and poorly) subdivided into two distinct and separate suites. Somewhere I read that Pep Boys had 200 stores in California, all sold to Advance, but they're only keeping 120 of them. So about one in three Pep Boys stores will have a live garage business and a empty dead store space. Personally I don't do business with them but I can't imagine how this could build trust for the Pep Boys car repair brand as customers see the sales floor liquidation sale with signs that say "Service Center is here to stay!" Who would trust them with their car?

Funny thing is that I haven't talked to one person who "misses" shopping at Pep Boys stores. They were always filthy, smelly, and had terrible service. All the stores near me had recently downsized the entire sales floor putting nearly everything into a larger warehouse space. The customer sales floor on these massive Pep Boys stores was now only about three aisles - smaller than the customer space at AutoZone or O'Reilly. With everything behind the counter in a warehouse its pretty hard to browse the aisles and make an impulse purchase. Even at car parts stores where usually I'm there for a very specific reason such as picking up wiper fluid I will still walk the aisles and sometimes pick up something that catches my eye like a tool or other product. With literally nothing on the sales floor except for cleaning products, oil and fluids, and a handful of cheap accessories at Pep Boys I am not sure how they were going to make any money on the retail side so best they walk away. Having to wait in line at the counter for wiper blades that are now in back (I'm serious) while the gruff parts guy takes three phone calls and stares at me like I have three heads just isn't pleasant. I haven't heard much about Advance but I can't imagine how they could be worse. They haven't opened up yet but they are thoroughly remodeling the Pep Boys store spaces. It's going to take a lot of degreaser to clean those neglected dumps.

On a side note, I shopped at O'Reilly late one night after being unable to find a car light bulb. They were out too and blamed the supply chain snarl - but then said they could see if they can order it for me. I wasn't really sure about this but the employee was friendly and seemed helpful so I decided to entertain him and let him look it up. This was around 8:45pm. He checked the computer and said the bulb is in low supply at their DC in San Bernardino area - only a dozen available at this time and none being shipped to the store. But he said that if I ordered it that night - it would be pulled at the DC that night and was guaranteed to be on their daily truck at the store when they open in the morning. That got my attention, mainly because the long time retail cynic in me said this will never happen. I gave him my credit card and paid for the $3.99 bulb. I called at 8am the next day - yes indeed it had arrived and was waiting for me to pick up. Whatever logistics system and process O'Reilly has in place - I'm pretty darned impressed with that kind of turnaround.
jamcool
Store Manager
Store Manager
Posts: 1019
Joined: March 5th, 2009, 10:27 pm
Been thanked: 50 times
Status: Offline

Re: Is 2021 finally the end for Sears/Kmart?

Post by jamcool »

Yet some retailers are expanding. Tractor Supply seems to be opening new stores in the suburbs-especially in areas where livestock is allowed (mini-farms) And there have been several Ace Hardware franchises that have opened up around where I live, with another one soon to open. (True Value seems to be stagnant in new locations.
cjd
Assistant Store Manager
Assistant Store Manager
Posts: 624
Joined: August 18th, 2018, 6:54 am
Has thanked: 3 times
Been thanked: 6 times
Status: Offline

Re: Is 2021 finally the end for Sears/Kmart?

Post by cjd »

I would agree on the auto parts stores. O'Reilly's has really been expanding these last couple of years. Virtually every town in my area, even those not large enough for a Walmart or chain supermarket has one now.

And not to mention the competition. My town has an O'Reilly's and an Auto Zone right next to each other, and then an Advance Auto Parts just across the intersection, plus one more on the other end of town. I don't know how 3 stores in one segment like that can keep competing.
storewanderer
Posts: 14379
Joined: February 23rd, 2009, 3:54 pm
Has thanked: 2 times
Been thanked: 298 times
Contact:
Status: Offline

Re: Is 2021 finally the end for Sears/Kmart?

Post by storewanderer »

ClownLoach wrote: November 30th, 2021, 11:50 pm
On a side note, I shopped at O'Reilly late one night after being unable to find a car light bulb. They were out too and blamed the supply chain snarl - but then said they could see if they can order it for me. I wasn't really sure about this but the employee was friendly and seemed helpful so I decided to entertain him and let him look it up. This was around 8:45pm. He checked the computer and said the bulb is in low supply at their DC in San Bernardino area - only a dozen available at this time and none being shipped to the store. But he said that if I ordered it that night - it would be pulled at the DC that night and was guaranteed to be on their daily truck at the store when they open in the morning. That got my attention, mainly because the long time retail cynic in me said this will never happen. I gave him my credit card and paid for the $3.99 bulb. I called at 8am the next day - yes indeed it had arrived and was waiting for me to pick up. Whatever logistics system and process O'Reilly has in place - I'm pretty darned impressed with that kind of turnaround.
They have a fleet of small pick up trucks to do deliveries like this to mechanics, etc. The stores get included in this as well for special order parts. It works best in a larger metro area where they have a lot of stores. They place their orders the day before then have a scheduled delivery the next day (typically very early in the morning). There are also some trucks based at individual stores so orders will be dropped there then taken very early in the morning out to the various mechanics.

I was recently doing a car repair and it was a Saturday (booked the appointment Friday) and they were missing one of the parts. Great, I thought- I am going to have to leave the car here. Nope, they arranged for the part to be delivered within a couple hours. It was a local Napa who did it and I watched them show up with it while I was waiting, but same general idea as how these O'Reilly special orders are handled and moved around so quickly. This was one of the biggest selling points when O'Reilly took over CSK was the ability to more quickly fulfill special orders and get more commercial/mechanic business with this delivery model. O'Reilly will also take larger former CSK Stores in a market and convert portions of the stores into mini-warehouses to further support the delivery operation.
mbz321
Assistant Store Manager
Assistant Store Manager
Posts: 747
Joined: March 11th, 2010, 7:52 pm
Has thanked: 96 times
Been thanked: 54 times
Status: Offline

Re: Is 2021 finally the end for Sears/Kmart?

Post by mbz321 »

jamcool wrote: December 1st, 2021, 9:36 am Yet some retailers are expanding. Tractor Supply seems to be opening new stores in the suburbs-especially in areas where livestock is allowed (mini-farms) And there have been several Ace Hardware franchises that have opened up around where I live, with another one soon to open. (True Value seems to be stagnant in new locations.
Funny you mention Tractor Supply as a location opened earlier in the year in a town I grew up in, in suburban PA, about 45 minutes outside Philly. My folks still live there and I visit them about once a week...the Tractor Supply never has more than a few cars in the parking lot. While there is some nearby agriculture and very small farms, the majority of the surrounding area is mcmansion neighborhoods. It just seemed like an odd place for them to set up shop. They also don't do propane refills or sell live animals due to local regulations. The store has good reviews though and has a self-serve dog wash which seems to be popular.

In the past several years, I have seen several new TrueValue stores pop up in local shopping centers, places that are distant from a Lowe's/Home Depot and they seem to be doing okay. They might all have the same ownership as they seem to all have the same store hours, but I'm not certain. There's a small chain of ACE stores already in the area.
User avatar
retailfanmitchell019
Assistant Store Manager
Assistant Store Manager
Posts: 891
Joined: November 10th, 2019, 11:17 am
Location: 760 area code
Has thanked: 39 times
Been thanked: 57 times
Contact:
Status: Offline

Re: Is 2021 finally the end for Sears/Kmart?

Post by retailfanmitchell019 »

Back on topic, this could be Kmart/Sears' last holiday season...
https://www.cnn.com/2021/11/25/business ... index.html
Sears could've invested in the Internet 20-30 years ago and beat Amazon.
Locked