Is 2021 finally the end for Sears/Kmart?

[rwsandiego]

I'm buying lottery tickets and going to Vegas if Walmart actually opens a store in one of the five NYC boroughs!

But seriously NYC seems hostile to Walmart and I don't see it meeting Walmart's financial needs ie run it as cheaply as possible.

If a "discounter" takes over those spaces the smart money is on Target.

[storewanderer]

Nothing was blocked off, the layout was odd for a KMart, but it's Manhattan. They had a fair amount of clothing and a decent frozen food section, as well as what looked like seasonal summer merchandise when you walk from the Astor/Lafayette corner. It was two floors, the bottom had what looked like an entrance to the subway, but it looked like nobody used it.

Interesting. What did the home category, hardlines (auto/hardware/toys) look like?

Kmart did do a pretty big restock late last year and actually filled up a lot of shelves again with large quantities of not many different items in the home category but the auto/hardware/toys in particular seems to just be limping along for about the past year and a half when they quit replenishing based on the planograms and quite sourcing their private label goods.

Here is a video of the subway entrance.

[storewanderer]

I'm buying lottery tickets and going to Vegas if Walmart actually opens a store in one of the five NYC boroughs!

But seriously NYC seems hostile to Walmart and I don't see it meeting Walmart's financial needs ie run it as cheaply as possible.

If a "discounter" takes over those spaces the smart money is on Target.

What is happening with Target in San Francisco right now makes me pause on that.

But clearly the environment in NYC is nothing like San Francisco at the present time so we have to remember that. And this Kmart (and the other Kmart) are exceptionally well positioned.

One might ask the question do they actually WANT this much square footage in a high rent spot like this?

When Kmart developed these NYC stores in 1996 and 1999 respectively the retail environment was a lot different... at the time it was quite an achievement to get such a big discount box into Astor and Penn Station and the stores did very very high volumes. Obviously in the past probably 10 years volumes have dropped off and the past year and a half probably been completely horrible given the merchandising situation. So maybe the stores are too big (even for Target or Wal Mart) given the changes to the retail environment.

I'm not sure Wal Mart could operate profitably in these locations. I thought Target had the magic formula for big city locations but what has happened in San Francisco and then downsizing in Portland makes me wonder.

It is interesting Kmart pursued these NYC locations as they did not try any other locations like these to my knowledge.

[Super S]

I'm buying lottery tickets and going to Vegas if Walmart actually opens a store in one of the five NYC boroughs!

But seriously NYC seems hostile to Walmart and I don't see it meeting Walmart's financial needs ie run it as cheaply as possible.

If a "discounter" takes over those spaces the smart money is on Target.

What is happening with Target in San Francisco right now makes me pause on that.

But clearly the environment in NYC is nothing like San Francisco at the present time so we have to remember that. And this Kmart (and the other Kmart) are exceptionally well positioned.

One might ask the question do they actually WANT this much square footage in a high rent spot like this?

When Kmart developed these NYC stores in 1996 and 1999 respectively the retail environment was a lot different... at the time it was quite an achievement to get such a big discount box into Astor and Penn Station and the stores did very very high volumes. Obviously in the past probably 10 years volumes have dropped off and the past year and a half probably been completely horrible given the merchandising situation. So maybe the stores are too big (even for Target or Wal Mart) given the changes to the retail environment.

I'm not sure Wal Mart could operate profitably in these locations. I thought Target had the magic formula for big city locations but what has happened in San Francisco and then downsizing in Portland makes me wonder.

It is interesting Kmart pursued these NYC locations as they did not try any other locations like these to my knowledge.

20+ years ago, stores like Kmart, Walmart, and Target generated enough volume that they could operate stores just about anywhere and end up profitable. Kmart in particular has made some pretty bad decisions and the whole chain is pretty much done for. Target and Walmart seem like the most likely fits. Target in particular has taken on many store formats, but the issues already mentioned could have them rethinking big city locations. As for Walmart, I picture a store like many others which will end up having all sorts of random categories locked up due to an unusual layout. And don't forget the effect of the internet on sales.

As for Target, some of those stores could be "temporary" until a property gets redeveloped and sales justify a regular store. This was the case when they took over the former 2-story Montgomery Ward at Jantzen Beach in Portland, which eventually was replaced with a conventional store when the mall property was redeveloped. I am watching to see what happens at Mall 205, which has become more empty in recent years.

[Alpha8472]

Walmart realizes that operating stores in high wage cities is a money losing operation. Walmart even closed some very high volume stores when minimum wage went up. For example, San Jose, California. New York does not have such a severe homeless shoplifter problem, but it does have an organized retail theft problem. There are professional shoplifting crews that will wipe out entire aisles of merchandise. The New York Police are too busy to respond quickly enough.

Walmart would not want self checkout at this store due to high theft. The company would schedule very little labor and cashiers due to New York's high minimum wage. All the aisles would have locked cabinets of merchandise and not enough employees to unlock them.

There are several Walmart stores where they locked up close to 40 percent of the merchandise. The aisles are all glass cabinets. The business is so bad at those locations now. All of the customers hated it and are shopping elsewhere even if it costs more. Walmart used to do booming business with lines of hundreds of customers. After locking up everything, the store is a ghost town. Walmart sure knows how to put a store out of business.

Target is rethinking its urban stores. These urban stores started out as CityTarget stores around 90,000 feet. Then Target realized that they were still too big. Then the company tried smaller urban stores. However, the limited selection was not as well received by customers as you would need to travel to a full sized Target to get everything that you needed. The small Target stores in San Francisco were not meeting sales goals. The shoplifting problem has caused Target to practically close those stores by reducing hours to minimum levels and cut employee labor hours as well to reduce costs. The rent is high and the minimum wage is some of the highest in the country. New York also has high rent and a high minimum wage.

I predict that Target will not risk another money losing attempt at urban stores.

[Groceteria]

]It is interesting Kmart pursued these NYC locations as they did not try any other locations like these to my knowledge.

They did have a downtown Philadelphia store for quite some time.

https://www.flickr.com/photos/fourstarc ... 6145315539

[buckguy]

NYC still has some discounters that are local like Jack's which has a store not far from the 34th St KMart and has been much busier every time I've been around there.

[storewanderer]

Jacks (it is "Jacks" now not "Jack's") is more of a 99 cent store type of place (used to be a 99 cent store then branched out of the 99 cent price point). Still, even now, is there much of anything in Jacks that is more than $10? Jacks is basically a clearance store with a rotating mix of products and a lot of odd/off brand 99 cent store type merchandise for everyday needs.

Jacks registers don't even scan and it also runs like it is some kind of a 1,000 square foot shop and demands a $5 minimum to pay with a credit card on their non-scanning cash register. Given their format it may make sense to not scan- too many different items coming in and out of the place since their mix is constantly changing.

Not really a like for like comparison to chains that handle a consistent mix of branded and house branded goods day in and day out like (well, before Kmart), Wal Mart, Target, etc.

[timanny]

Nothing was blocked off, the layout was odd for a KMart, but it's Manhattan. They had a fair amount of clothing and a decent frozen food section, as well as what looked like seasonal summer merchandise when you walk from the Astor/Lafayette corner. It was two floors, the bottom had what looked like an entrance to the subway, but it looked like nobody used it.

Interesting. What did the home category, hardlines (auto/hardware/toys) look like?

Kmart did do a pretty big restock late last year and actually filled up a lot of shelves again with large quantities of not many different items in the home category but the auto/hardware/toys in particular seems to just be limping along for about the past year and a half when they quit replenishing based on the planograms and quite sourcing their private label goods.

Here is a video of the subway entrance.

I didn't pay attention to hardlines, it's possible that there weren't any and I just didn't notice. Despite being stocked, the vibe felt less like KMart and more like a late stage Kress store, like the classic Art Deco downtown Stockton location in the 80s after the chain was dead except for a few stragglers like Stockton.

[rwsandiego]

I'm buying lottery tickets and going to Vegas if Walmart actually opens a store in one of the five NYC boroughs!

But seriously NYC seems hostile to Walmart and I don't see it meeting Walmart's financial needs ie run it as cheaply as possible.

If a "discounter" takes over those spaces the smart money is on Target.

What is happening with Target in San Francisco right now makes me pause on that.

But clearly the environment in NYC is nothing like San Francisco at the present time so we have to remember that. And this Kmart (and the other Kmart) are exceptionally well positioned....

Target is successful in Chicago so I doubt they would not be successful in Manhattan. As you said, the environment is completely different in New York (and Chicago) than it is in San Francisco. The issue in San Francisco is the rampant theft. It sounds like it goes beyond "shoplifting" and has entered organized crime territory.

Like @htimanny, I found the Manhattan KMarts to fee like the large multi-level Kresge and Woolworth stores that used to be in large urban downtowns.