Sears: The End is Near

What? Is it no longer 1963?

 

I do not understand how no one saw this coming. Sales are slow all around, I understand, but Sears (SHLD) does not attract the customers that are shopping.

 

Sears has done away with its catalog business, except during the holidays. Along with the tossing out of the catalog and catalog department Sears also ostracized its most dedicated customer base, the elderly. Adults unfamiliar with the internet can no longer order items to their homes by simply calling a hotline or visiting the catalog department. Many customers over 50 have had Sears cards for 30 plus years but are unable or unwilling to shop on the net. Furthermore, due to space constraints inside the brick and mortar store many items are only available on line. If the non-computer savvy customer does not see it on the shelf, they simply do not buy it.

 

Sears' floor plan usually employs two stories with most of the square footage dedicated to the soft line business. This is where Sears sees the most markdowns, which kills their bottom line. One fatal flaw of the Sears floor plan is that the appliance department usually resides upstairs. Many customers, by their own admission, do not realize that their neighborhood Sears carries appliances.

 

Sears' lack of initiative or funds to remodel old stores when other businesses have employed attractive eye-catching exteriors and trendy interiors has further deteriorated sales by not attracting the 18 - 36 year old shoppers. Sears sometimes uses its own employees to conduct full store resets and refreshes instead of hiring outside contractors. This takes the associates focus away from the customer.

 

Without the mergers and acquisitions of the recent years, one can now see Sears for what it is. The past quarters have been inundated with padding of the earnings sheet through avenues other than store sales.

 

Again, I say, "What is the surprised look all about?" Sears will stay afloat only until their cash on hand dwindles.

 

Disclosure: none

 

 

Comments

[bulrun100]

LOL! OH BECAUSE YOU SAID SO!40-45 BILLION IN SALES IS JUST GOING AWAY BECAUSE YOU SAYS SO YOUR A FOOL.LOVE PEOPLE LIKE YOU KICK'EM WHEN THEY'RE DOWN KINDA PEOPLE. WHERE WERE YOU WHEN THE STOCK WAS FLYING AND EVERYONE WAS A CHEER LEADER?POST SOMETHING DATED YOU WROTE NEGATIVE PREDICTING YOUR SO CALLED END.LOL!

[MSF]

Bulrun.

What do you think will happen with Sears.

I heard Lampert might buyout the existing shareholders with his hedge fund with a small pemium.

[fxtrader07]

@MSF: that's unlikely. Ackman, berkowitz, Pabrai... will certainly not give away their stakes for "a small premium". And even if - lampert has proven his inability to add any value to sears. rather, he has helped destroying value there at a rapid clip.
i notice that the very smart bruce berkowitz only recently bought a significant amount of shares for fairholme's fund. so obviously, he sees great value here.
I can't see it - and therefore I won't touch the stock.

[MSF]

Fax,

They will not have a choice Lampert's holdings makes him the majority holder.

[notsosmart]

something simple. sears advertises like crazy in my hometown of stamford ct. they closed the stamford store about 25 years ago(never staffed properly) & now the closest store is danbury,ct about an hours drive. i laugh every week when i see their sunday colored ads. this area has a high income population & they chose to leave & never come back.go figure?

[Paul Price]

Sears and K-Mart are two of the worst operators in retailing today.
They can't compete on price, ambiance, style or selection with WalMart or Target.

SHLD is in a slow-motion death spiral. Remember Caldor, Rose Stores, Montgomery Ward etc. SHLD is heading for the retailers' graveyard also.

[MSF]

Forget about the real estate play,Vornado realty sold all the shares.

At least reits pay a dividend.

[Jim Not C]

Waterline is up to the deck, all compartments flooded.


Full Steam Ahead !!!!

[bulrun100]

WE SHOULD CALL THIS THE SSSSSSSSSSSSSHHHHHHORT... BLOG!WHY DON'T YOU ALL SLAP EACH OTHER ON THE BUTTS AND SAY GOOD GAME.

[bulrun100]

MSF IN MY OPINION SEAR'S WILL BE AROUND FOR ALONG TIME BUT SMALLER.IT WILL CONTINUE TO BE A SECOND RATE RETAILER BUT AS THE ECONOMY TURNS THE SALES WILL RETURN TO 06-07 LEVELS(BEFORE RECESSION).AT THOSE LEVELS AS WE HAVE SEEN EDDIE CAN GENERATE HUGE RETURNS.WITH THE SHARES REPURCHASED(YES AT HIGHER LEVELS)THE EPS WILL BE 10-20% HIGHER WHICH WILL IN TURN LOWER THE PE.WHEN AND IF THE ECONOMY/HOUSING RECOVERS SALES ONLY HAVE TO RETURN TO 06-07 SALES FOR THE SHARE PRICE TO MOVE TO$200-220.00.BASED ON 6.00-8.00 ESP WHICH WAS 06-07 NUMBERS.ONE MORE THING IF REALESTATE SALES ARE IN EDDIE'S PLAN HE WILL NOT MAKE THE SAME MISTAKE AGAIN HE WILL SELL OFF STORES INCREASING THE CASH ON HAND.BUY SELLING OFF THE STORES THAT ARE UNDER PERFORMING(WELL THE WORSE ONES)THE COMP NUMBERS WILL IMPOVE AS WELL AS PROFITABILITY.ANY ASSET SALES ARE NOT INCLUDED IN THE TARGET PRICE.AS YOU CAN READ I'M NOT SAYING ANYTHING VERY BULLISH OR OUT OF LINE.AS ALL RETAIL HAS GONE WITH THE ECONOMY SO HAS SEARS(LOW,HD IN THE SAME BOAT).

[AvlGuy]

Letting the retail end slide was part of Lambert's new paradigm for SHLD to make money on real estate, other leveraged investments, etc.
We'll see how plan b or plan c work.

[User 153975]

I just got back from shopping at K-Mart. Bought a pair of Wrangler black jeans for $9.99 and a bargain DVD for $2.50. I've always liked K-Mart and it is sad that the store is so empty of customers. They are price competitive with WalMart, but the choice of merchandise is not nearly as good. It is interesting how stores go in and out of favor. I made a few bucks on SHLD puts a while back but I haven't re-entered on the short side. Timing never seems quite right and yet SHLD keeps going down. It still seems overpriced to me, but I always find a better short.

[vwvt]

Everything said, doesn't seem to apply here in western NY, as well as New England. Sears is the mainstay of all local malls, all merchandise is on one floor, is always busy and fully stocked. When I go shopping, my first stop is Sears and I usually find what I need, so ends up being the only store I shop at.

[lefty]

The largest reason for the Sears downfall?
They forgot who they were. Their downfall started with their adoption of, (The Softer Side of Sears) mentality. As a young couple, we purchased EVERYTHING from sears, mostly on an interest free charge card.

[MrsLinarcos]

Oooh lefty hit it right on the head. Sears will never be what it was in the past. Due to greed, poor communication to it's associates on all levels. Plans that don't work, higher ups getting more than their fair share. Cutting back on a/c, giving customers the run around. That's not the company I worked for. That is long gone and not much longer will the company.

[cheygirl]

I work for Kmart now and I agree. I think they are cleaning stores up to sell them instead of being concerned about bottom line.


On Jun 12 03:54 PM DebCat wrote:

> Oooh lefty hit it right on the head. Sears will never be what it
> was in the past. Due to greed, poor communication to it's associates
> on all levels. Plans that don't work, higher ups getting more than
> their fair share. Cutting back on a/c, giving customers the run around.
> That's not the company I worked for. That is long gone and not much
> longer will the company.