Sears and Kmart close even more stores
<p class = "canvas atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "As it turns out, it was just the top of the By the end of August, Transform Holdco had initiated the store closure process for about 100 more locations, according to USA Today suggesting that the Sears and Kmart chains could be near collapse entirely . It would provide billions of dollars of sales to roof for competitors, ranging from JC Penney [19659003] (NYSE: JCP) to Target (NYSE: TGT) . -reactid = "12"> As it turns out, it was just the tip of the iceberg. By the end of August, Transform Holdco had initiated the store closure process for around 100 more locations, according to USA Today . This action suggests that the Sears and Kmart chains may be close to collapsing completely. It would provide billions of dollars of sales for competitors, ranging from J.C. Penney (NYSE: JCP) to Target (NYSE: TGT) .
The pace of store closures accelerates again
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "I beginning of 2018, Sears Holdings operated around 1,000 stores between the Sears and Kmart nameplates, the remnants that survived bankruptcy were less than half that size, and the store closures announced just since the beginning of August will leave the two chains with fewer than 300 full-line stores in total. "data-reactid =" 14 "> At the beginning of 2018, Sears Holdings operated around 1,000 stores between the Sears and Kmart nameplates. The remnants that survived bankruptcy were less than half that size. The store closures announced just since the beginning of August will leave the two chains with fewer than 300 full-line stores in total.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8 em) – sm" type = "text" content = "The official closing shop announcement in The beginning of August was primarily aimed at Sears stores, and a statement of business indicated that the move was part of a broader shift to a strategy centered on small format stores with a limited product range Transform Holdco has agreed to buy Sears Hometown and Outlet Stores – or at least the hometown section of the company – which will be expanded immediately to its geographical reach. Sears Hjemby stores primarily sell appliances, tools and grass and garden articles – commodity categories in which Sears still competes relatively well . "data-reactid =" 15 "> The official closing store announcement in early August was mainly aimed at Sears stores. A company statement indicated that the move was part of a broader shift to a strategy centered on small format stores with a limited product range. Transform Holdco has agreed to buy Sears Hometown and Outlet Stores – or at least the Hometown section of the company – which will expand its geographical reach immediately. Sears Hometown stores primarily sell appliances, tools and grass and garden items – commodity categories in which Sears still competes relatively well.
Exterior of a Sears fullline store
Sears and Kmart have closed fullline stores at a rapid pace. Image source: Sears.
By contrast, more than 80 of the around 100 sites marked for closure later this month were Kmarts. This move has nothing to do with a transition to small format stores. It simply marks a haven from the soft goods, grocery and pharmacy categories that account for the bulk of Karmt's sales.
Beginning of the End
This massive wave of store closures is a clear signal that bankruptcy did not solve the underlying problems of Sears and Kmart. If more evidence is needed, Transform Holdco turns its head office employees on, and holds just enough staff to perform the essential tasks needed to be in business.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "It is not surprising that Sears and Kmart are in a downward spiral, considering that relatively stronger chains like JC Penney are also Some retailers – such as Target – are gaining market share quickly thanks to a combination of low prices, compelling products, well-designed stores and convenient retrieval – and delivery options. Others, such as Sears, Kmart and JC Penney, struggle to adapt to changing consumer behavior. "data-reactid =" 31 "> It's no surprise that Sears and Kmart are in a downward spiral, considering that relatively Stronger chains like JC Penney are also in the mountains. Some retailers – such as Target – quickly gain market share thanks to a combination of low prices, compelling products, well-designed stores and convenient pick-up and delivery options. Others, such as Sears, Kmart and J.C. Penney, struggling to adapt to changing consumer behavior.
In recent years, management has often argued that closing unprofitable Sears and Kmart stores would make the chains stronger in the long run. It is no longer a plausible argument. What is left of the Sears and Kmart chains is too small to be viable in today's competitive environment. Adding a bunch of small format Sears stores won't change that either.
J.C. Penney's last chance to gain a certain market share
Several years ago, under former CEO Marvin Ellison, J. C. Penney adopted a growth strategy focusing on taking market share from Sears as it shrank. Most noteworthy, JC Penney began selling large appliances, hoping to capture part of Sears & # 39; multibillion-dollar appliances business.
<p class = "canvas atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8 em) – sm" type = "text" content = "But selling appliances proved to be unprofitable , like many of the company's other growth initiatives. Meanwhile, JC Penney allowed its core apparel business to decline and lose market share to affordable retailers, discounts such as Target and Walmart and fast-fashion chains. finally abandoned Ellison's entire growth strategy, leaving the company with lower sales and lower profits than it had been some years before. "data-reactid =" 39 "> But selling appliances turned out to be unprofitable, like many of the company's other growth initiatives. In the meantime, J.C. Penney's core apparel business is getting worse, losing market share to price traders, discounts like Target and Walmart and fast fashion chains. JC Penney's new management team eventually abandoned Ellison's growth strategy, leaving the company with lower sales and lower profits than it had had a few years before.
Today, JC Penney has turned back to focus on fixing core clothing and home businesses and improving the shopping environment of the store to give back to growth. If this strategy is successful, the retailer can take advantage of the ongoing downward spiral in Sears and Kmart. Kmart in particular still sells many clothing and home goods and targets customers similar to J.C. Penney & # 39; s.
However, to reverse its own sliding sales, J.C. Penney will have to make sure rivals like Target don't continue to eat lunch. Considering the strong sales momentum of the debate, it will be a very tough task.
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<p class =" canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" Adam Levine-Weinberg owns shares in JC Penney. The Motley Fool has no position in any of the listed shares. Motley Fool has a disclosure policy . "data-reactid =" 50 "> Adam Levine-Weinberg owns shares in JC Penney. Motley Fool has no position in any of the shares listed. Motley Fool has a disclosure policy.
<p class = "canvas atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "This article was originally published on Fool.com "data-reactid =" 51 "> This article was originally published on Fool.com
