2022: 10 Kmart, 23 Sears stores remain...

[storewanderer]

The recorded legal warning piped out of a box as you go toward the down escalator from second floor to first floor is a real trip back to the 70s.

Legal warning?

There is an odd box at the base of the down escalator at floor 2 going to floor 1. It has this voice over that sounds like something out of a 1950's TV show warnings you to not bring strollers, carts, etc. onto the escalator due to safety risks. You can only hear it right as you are around the escalator but if you walk the perimeter of the escalator you can hear it off in the distance. The sound of the voice comes from down quite low, like knee-level, to further create the odd vibe (since sounds in a store like this usually come from overhead).

[ClownLoach]

I just can't imagine that any remaining full line Sears or Kmart stores are leased. The sales must be so low that they just cover the cost of the skeleton crew and basic utilities.

[storewanderer]

I just can't imagine that any remaining full line Sears or Kmart stores are leased. The sales must be so low that they just cover the cost of the skeleton crew and basic utilities.

Maybe someday after they finally close everything, someone will convince Eddie to explain the logic to keeping these stores open this long. Once the store counts fell below about 250 stores I don't understand how it made sense to keep anything open. Then 2 years ago when they basically closed the entire merchandising operation and quit sending planograms to the stores for setting goods... since they had few goods... what was the point? Sure you got rid of the corporate office overhead and now you got rid of warehouse overhead and rely on suppliers shipping to the store via UPS but what is the point of all this when you have so little product and very low sales volume?

In the past they were using liquidation sales as a revenue and profit driving activity. Back when they had a full/robust product mix this strategy I guess worked. Now they do not have much of anything that is going to generate sales and even the liquidation sales will be a hard sell.

Maybe there is something we are missing as to why this makes sense.

[ClownLoach]

I just can't imagine that any remaining full line Sears or Kmart stores are leased. The sales must be so low that they just cover the cost of the skeleton crew and basic utilities.

Maybe someday after they finally close everything, someone will convince Eddie to explain the logic to keeping these stores open this long. Once the store counts fell below about 250 stores I don't understand how it made sense to keep anything open. Then 2 years ago when they basically closed the entire merchandising operation and quit sending planograms to the stores for setting goods... since they had few goods... what was the point? Sure you got rid of the corporate office overhead and now you got rid of warehouse overhead and rely on suppliers shipping to the store via UPS but what is the point of all this when you have so little product and very low sales volume?

In the past they were using liquidation sales as a revenue and profit driving activity. Back when they had a full/robust product mix this strategy I guess worked. Now they do not have much of anything that is going to generate sales and even the liquidation sales will be a hard sell.

Maybe there is something we are missing as to why this makes sense.

After some thought here is my theory:

We know Sears Holdings, or Transform or whatever he wants to call it is basically worthless as an organization and couldn't possibly make any money.

But what if the remaining stores are basically a tax shelter? This is for the Seritage company he created - which is where all the profits are as it basically got Sears and Kmart buildings for free and converted most to profitable rentals to modern tenants. Where these have been successfully converted, such as the new massive wing opening up this summer at UTC in La Jolla, lots of profit to be made. But what if Sears is "renting" their remaining stores from Seritage and not paying the rent - since the organization couldn't possibly break even? Then Fast Eddie gets to file big losses on the Seritage side to wash out the profits from successful redevelopment - probably just enough losses from Sears/Kmart to significantly lower his corporate income tax. At that point he is basically using the government to prop up the remaining Sears/Kmart stores since he makes more money not paying taxes than he's going to actually lose on these paid for buildings selling low end goods Big Lots would have rejected.

It makes perfect sense because the Fast Eddie scam was that he basically has been running a controlled liquidation of Sears where he sells himself (Seritage) the real estate for pennies. Then Seritage redevelops it into modern tenants in good malls, or housing etc. in bad ones. Same kind of scenario with the few remaining Kmarts.

Now the endgame? You can only write off the losses for so long. He probably created some kind of contract where Seritage can't "boot" Sears or Kmart stores until they've not paid the rent for the same amount of time that you have to write off losses. I believe that it is 5 years where you can write it off. So that may be the reason for these remaining stores. Once the P&L turns red they stop paying rent. They may "owe" a fortune in high market level rents to Seritage, who got the buildings for basically nothing and is spending the same. Then either the write off period expires and the store closes, or a better tenant comes around and the store is booted. Either way Fast Eddie uses these fake losses to make sure that he cuts his tax burden on real profits from real tenants. He probably "charges" lease severance in the millions of dollars as well for these "early closures" and adds that in as the final Seritage write off when the store closes.

I think that is why Sears and Kmart zombie stores are still here. They're worth more, well, as zombies than dead because they limit his tax burden on real profits. And this strategy makes perfect sense because it's clear that the entire reason for Fast Eddie buying Sears and Kmart was to transform them... Transform their assets (lots of real estate) into money for himself while the other shareholders and employees got the shaft. He knew that the future was bleak for both, that the real estate owned was the only reason that both chains hadn't liquidated long before he bought them, and he saw that by stealing the real estate they would be worth more dead than alive. Fast Chainsaw Eddie has made billions of dollars hacking up the dying Sears organization and once he can't squeeze another dollar out of it he will finally unceremoniously bolt the doors shut.

[storewanderer]

I just can't imagine that any remaining full line Sears or Kmart stores are leased. The sales must be so low that they just cover the cost of the skeleton crew and basic utilities.

Maybe someday after they finally close everything, someone will convince Eddie to explain the logic to keeping these stores open this long. Once the store counts fell below about 250 stores I don't understand how it made sense to keep anything open. Then 2 years ago when they basically closed the entire merchandising operation and quit sending planograms to the stores for setting goods... since they had few goods... what was the point? Sure you got rid of the corporate office overhead and now you got rid of warehouse overhead and rely on suppliers shipping to the store via UPS but what is the point of all this when you have so little product and very low sales volume?

In the past they were using liquidation sales as a revenue and profit driving activity. Back when they had a full/robust product mix this strategy I guess worked. Now they do not have much of anything that is going to generate sales and even the liquidation sales will be a hard sell.

Maybe there is something we are missing as to why this makes sense.

After some thought here is my theory:

We know Sears Holdings, or Transform or whatever he wants to call it is basically worthless as an organization and couldn't possibly make any money.

But what if the remaining stores are basically a tax shelter? This is for the Seritage company he created - which is where all the profits are as it basically got Sears and Kmart buildings for free and converted most to profitable rentals to modern tenants. Where these have been successfully converted, such as the new massive wing opening up this summer at UTC in La Jolla, lots of profit to be made. But what if Sears is "renting" their remaining stores from Seritage and not paying the rent - since the organization couldn't possibly break even? Then Fast Eddie gets to file big losses on the Seritage side to wash out the profits from successful redevelopment - probably just enough losses from Sears/Kmart to significantly lower his corporate income tax. At that point he is basically using the government to prop up the remaining Sears/Kmart stores since he makes more money not paying taxes than he's going to actually lose on these paid for buildings selling low end goods Big Lots would have rejected.

It makes perfect sense because the Fast Eddie scam was that he basically has been running a controlled liquidation of Sears where he sells himself (Seritage) the real estate for pennies. Then Seritage redevelops it into modern tenants in good malls, or housing etc. in bad ones. Same kind of scenario with the few remaining Kmarts.

Now the endgame? You can only write off the losses for so long. He probably created some kind of contract where Seritage can't "boot" Sears or Kmart stores until they've not paid the rent for the same amount of time that you have to write off losses. I believe that it is 5 years where you can write it off. So that may be the reason for these remaining stores. Once the P&L turns red they stop paying rent. They may "owe" a fortune in high market level rents to Seritage, who got the buildings for basically nothing and is spending the same. Then either the write off period expires and the store closes, or a better tenant comes around and the store is booted. Either way Fast Eddie uses these fake losses to make sure that he cuts his tax burden on real profits from real tenants. He probably "charges" lease severance in the millions of dollars as well for these "early closures" and adds that in as the final Seritage write off when the store closes.

I think that is why Sears and Kmart zombie stores are still here. They're worth more, well, as zombies than dead because they limit his tax burden on real profits. And this strategy makes perfect sense because it's clear that the entire reason for Fast Eddie buying Sears and Kmart was to transform them... Transform their assets (lots of real estate) into money for himself while the other shareholders and employees got the shaft. He knew that the future was bleak for both, that the real estate owned was the only reason that both chains hadn't liquidated long before he bought them, and he saw that by stealing the real estate they would be worth more dead than alive. Fast Chainsaw Eddie has made billions of dollars hacking up the dying Sears organization and once he can't squeeze another dollar out of it he will finally unceremoniously bolt the doors shut.

The remaining stores are not Seritage Stores. They closed the last of the Seritage Stores a year or two back. That was a surprise at the time as many thought the Seritage Stores were safe.

I am not sure if the remaining stores are owned or leased. But many stores closed recently were leased and they are still paying the lease on those closed stores (which also does not make sense to me). Stores like Bishop, South Lake Tahoe, etc. But I think those store closures are because they have no more inventory so they can't run the stores anymore. They spun Grass Valley Kmart to Target real fast back in December, but the landlord played a big part in that as they wanted to redevelop the shopping center and wanted the mysterious high pharmacy volume but zombie empty of goods store Kmart and its 50-year lease out of there.

[pseudo3d]

Maybe someday after they finally close everything, someone will convince Eddie to explain the logic to keeping these stores open this long. Once the store counts fell below about 250 stores I don't understand how it made sense to keep anything open. Then 2 years ago when they basically closed the entire merchandising operation and quit sending planograms to the stores for setting goods... since they had few goods... what was the point? Sure you got rid of the corporate office overhead and now you got rid of warehouse overhead and rely on suppliers shipping to the store via UPS but what is the point of all this when you have so little product and very low sales volume?

In the past they were using liquidation sales as a revenue and profit driving activity. Back when they had a full/robust product mix this strategy I guess worked. Now they do not have much of anything that is going to generate sales and even the liquidation sales will be a hard sell.

Maybe there is something we are missing as to why this makes sense.

After some thought here is my theory:

We know Sears Holdings, or Transform or whatever he wants to call it is basically worthless as an organization and couldn't possibly make any money.

But what if the remaining stores are basically a tax shelter? This is for the Seritage company he created - which is where all the profits are as it basically got Sears and Kmart buildings for free and converted most to profitable rentals to modern tenants. Where these have been successfully converted, such as the new massive wing opening up this summer at UTC in La Jolla, lots of profit to be made. But what if Sears is "renting" their remaining stores from Seritage and not paying the rent - since the organization couldn't possibly break even? Then Fast Eddie gets to file big losses on the Seritage side to wash out the profits from successful redevelopment - probably just enough losses from Sears/Kmart to significantly lower his corporate income tax. At that point he is basically using the government to prop up the remaining Sears/Kmart stores since he makes more money not paying taxes than he's going to actually lose on these paid for buildings selling low end goods Big Lots would have rejected.

It makes perfect sense because the Fast Eddie scam was that he basically has been running a controlled liquidation of Sears where he sells himself (Seritage) the real estate for pennies. Then Seritage redevelops it into modern tenants in good malls, or housing etc. in bad ones. Same kind of scenario with the few remaining Kmarts.

Now the endgame? You can only write off the losses for so long. He probably created some kind of contract where Seritage can't "boot" Sears or Kmart stores until they've not paid the rent for the same amount of time that you have to write off losses. I believe that it is 5 years where you can write it off. So that may be the reason for these remaining stores. Once the P&L turns red they stop paying rent. They may "owe" a fortune in high market level rents to Seritage, who got the buildings for basically nothing and is spending the same. Then either the write off period expires and the store closes, or a better tenant comes around and the store is booted. Either way Fast Eddie uses these fake losses to make sure that he cuts his tax burden on real profits from real tenants. He probably "charges" lease severance in the millions of dollars as well for these "early closures" and adds that in as the final Seritage write off when the store closes.

I think that is why Sears and Kmart zombie stores are still here. They're worth more, well, as zombies than dead because they limit his tax burden on real profits. And this strategy makes perfect sense because it's clear that the entire reason for Fast Eddie buying Sears and Kmart was to transform them... Transform their assets (lots of real estate) into money for himself while the other shareholders and employees got the shaft. He knew that the future was bleak for both, that the real estate owned was the only reason that both chains hadn't liquidated long before he bought them, and he saw that by stealing the real estate they would be worth more dead than alive. Fast Chainsaw Eddie has made billions of dollars hacking up the dying Sears organization and once he can't squeeze another dollar out of it he will finally unceremoniously bolt the doors shut.

The remaining stores are not Seritage Stores. They closed the last of the Seritage Stores a year or two back. That was a surprise at the time as many thought the Seritage Stores were safe.

I am not sure if the remaining stores are owned or leased. But many stores closed recently were leased and they are still paying the lease on those closed stores (which also does not make sense to me). Stores like Bishop, South Lake Tahoe, etc. But I think those store closures are because they have no more inventory so they can't run the stores anymore. They spun Grass Valley Kmart to Target real fast back in December, but the landlord played a big part in that as they wanted to redevelop the shopping center and wanted the mysterious high pharmacy volume but zombie empty of goods store Kmart and its 50-year lease out of there.

The store closing sale in San Marcos (TX) that I went to a week or two ago was in a leased space (strip mall) that never had a strip mall and still had inventory.
There are so few stores that they need to just start going off the leash and merchandising their own stores like Guam. Even if it's poorly-disguised close-out items they can at least fill the stores again.

[storewanderer]

Most Sears Hometown seem to be closing around me; Truckee, Fallon, Grass Valley all closing. I guess these stores were all being run by the Corporation not dealers.

One in Auburn, CA is still somehow run by a dealer (my hat is off to that dealer for making it work this long...) and is staying open. I wonder how it will get products...

It was also brought to my attention Sears Dealers used to be able to order parts for appliance repairs, but back in 2021 their ability to do that was taken away. Given Sears still has the repair business, obviously they are still sourcing parts. So why take the ability of the dealers to sell parts to customers away? Just another Sears thing that makes no sense. Why should things be any different than they've been for the past 25 years? Sears was circling the drain long before Eddie showed up.

[Bluelightspecial]

Looks like they are closing all 70 of the Sears Hometown Stores.

https://www.axios.com/2022/05/25/sears- ... -locations

[ClownLoach]

It was also brought to my attention Sears Dealers used to be able to order parts for appliance repairs, but back in 2021 their ability to do that was taken away. Given Sears still has the repair business, obviously they are still sourcing parts. So why take the ability of the dealers to sell parts to customers away? Just another Sears thing that makes no sense. Why should things be any different than they've been for the past 25 years? Sears was circling the drain long before Eddie showed up.

The parts situation had been a train wreck for years. At some point in time some genius decided to raise parts prices to illogical levels. I bought a Kenmore barbecue in 2013 for $279. It worked surprisingly well for the price and about 4 years later it needed replacement iron grills and diffuser bars. For these standard consumable parts Sears wanted $311 PLUS SHIPPING! More than the grill itself. I threw it out and bought a Weber. That grill turned out to be my final Sears purchase.

[Retailuser]

Yep the sears stores are getting smaller.