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Friday, February 19, 2010

Craftsman, Sears Auto Center to be farmed out

Update [2/23]: Link to list of store closings: http://www.searsmedia.com/tools/close_022310.pdf
For the year, domestic comparable store sales declined 5.1%, and included a slight decline at Kmart of 0.8% and a decline at Sears Domestic of 8.7%. The flat store sales at Kmart are a good sign, but still concerning since it includes shoe sales (which were taken over last year from a 3rd-party supplier, Footstar) and since the number of Kmart stores has dropped by almost 1/3 in the past 8 years (there were 2,114 Kmart stores open in 2002, and now slightly more than 1,300 remain) meaning usually the most underperforming stores have been cut and cut, so same-store sales declines should decrease as well. Plus, "peers" Target and Walmart have generally seen both same-store sales growth as well as new store openings.

62 Kmart/Sears stores were closed fiscal 2009 and 46 in fiscal 2008. Already at least 21 store closures have been announced this year. There are now only around 2,200 remaining Sears and Kmart stores, not counting franchisees such as Sears Hometown and smaller formats such as Sears Outlet centers.

[End update]

Some pictures of Sears Essentials (what I think of as examples of the numerous miserable failures of Sears Holdings) collected from around the internet, as a sign of what might be more common in the future:









So in addition to offering franchisees the DieHard and Sears Auto Center brand, now the Craftsman brand seems to be being gradually sold and divested for short-term cash. Ace Hardware stores will start carrying the once-mighty and once Sears-exclusive Craftsman tool line. While still the supposed #1 tool brand in America, Craftsman's reputation probably took a little hit when it moved into Kmart stores, but it helped boost Kmart's offerings and appeal, so that move was overall probably a boon. But now, Craftsman will be in other retailers - will this negatively impact Sears/Kmart sales? (It will be good for the contracted tool manufacturer, for sure, but will Sears reap a rich reward?) Also, the Sears Hometown Stores franchisees will probably be royally angered, as they are often in direct competition with other local smaller hardware/tool stores like Ace, and one of their key assets is brand quantity, quality, and exclusivity. (They were pretty mad when Craftsman went into Kmarts, but this one will hurt even more. Do I sense a lawsuit?) Once again, it seems like Sears has failed to capitalize on their strengths and is selling off the company piece by piece. If only five years ago when the Kmart-Sears merger happened, that Sears re-invested and upgraded its stores nationwide (many analysts encouraged and predicted a whole ditching of the Kmart brand for a new Sears store type - instead we got a miserable, haphazard Sears Essentials failure), perhaps today it could compete better against the well-run Wal-Mart, Target, and other retailers. The number of stores has fallen by the hundreds in the past decade, and even the revamped Sears.com and MyGofer sites, while quite impressive, will ultimately face extreme difficulties competing with the established Amazons of the e-retailing world. Indeed, it may already be too late to save Sears/Kmart, and spinning off or selling the best-performing assets like Craftsman, DieHard Auto, and Kenmore may be in the investors' best interests. A previous press release, "creating value rather than solely building market share or sales", makes clear the obvious truth that Sears is not investing in its stores and retail business, but seriously, the cost-cutting and bare-bones capital spending probably has hurt the reputation too much with market share loss nearly irreversible - the so-called death spiral of stores. But for retail fans, we wish you the best of luck in actual retailing, SHLD!

Story:

Craftsman, America's most trusted tool brand, will now be sold through Ace Hardware stores. In May, approximately 100 Ace stores will begin selling Craftsman products.

Under the first phase of the agreement, qualifying Ace stores will be able to sell the Craftsman brand including hand tools, portable power tools, compressors, wet/dry vacs and tool storage. As the number one tool brand in America, Craftsman continued to increase its popularity in 2009 among Americans who want to take on DIY projects with a tool they can trust to get the job done.

In June, Ace will promote a number of Craftsman products, giving all 4,500 Ace stores the opportunity to offer the Craftsman brand to customers.
full article http://money.cnn.com/news/newsfeeds/articles/prnewswire/CG58107.htm

Monday, February 15, 2010

More store closings

Sadly, apparently around 13 more Kmart and 8 Sears stores are going to be closed by May 2010. News has been popping up with Sears closings in North Carolina, New Hampshire (Sears Essentials), Texas, Georgia, Tennessee, Wisconsin and New Jersey (2); and Kmart closings in states including Colorado, Indiana, Kentucky, Washington, Georgia, Texas, and California. No press releases from the company website, though. Either they will release it later or they're trying to keep the bad news more hidden, though there is a PDF with a list of stores closed last year. Still no brand new stores...

Also, the DieHard brand is going to be sold outside of Sears/Kmart stores, to generate more revenues from royalties, etc. Is this the first step in dismantling the Sears portfolio of brand assets? We all know they are not investing in actual store retailing...

Next week: A brief example look at cross-town rival Target!

Update from Chicago Tribune:
Kmart plans to close 13 stores by May 9, including two in Illinois, according to parent Sears Holdings Corp.

The closings were announced to employees earlier this month and include Kmart stores outside Chicago in Woodstock and Crestwood, according to Sears spokeswoman Kimberly Freely.

Among the other stores to close are five Ohio Kmarts in Dayton, Milford, Cleveland, Eastlake and Wadsworth. Also slated to be shuttered are stores in Bremerton, Wash., Longmont, Colo., Cornersville, Ind., Bainbridge, Ga., Jacksonville, Fla., and Austin, Minn.

The Hoffman Estates-based retailer has been gradually closing underperforming Kmart stores for the several years.

Kmart operated 1,343 stores nationwide as of Oct. 31, down, from 1,378 stores as of Nov. 1, 2008. There were 1,445 Kmart stores 2005, the year that Kmart acquired Sears.

Separately, Sears is cutting 60 jobs at its Dodgeville, Wis.-based Lands' End division, announced internally in January, Freely said.

Also, Sears will franchise new Sears Auto Centers, with the first one opening soon in New Jersey.

Tuesday, February 2, 2010

Fall Rivers, MA Big Kmart

New Harbour Mall Big Kmart 372 William S Canning Boulevard, Fall River, MA 02721

After reading a good Labelscar blog post on it, we had to share. Why? This is (supposedly) the only shopping center in the country with both a Wal-Mart and a Kmart sharing the same building! See our Mesa, AZ post about a Target and a Kmart in the same plaza (though separate buildings), and a Big Kmart and a Wal-Mart Supercenter sharing the same parking lot (literally feets from each other) in Gilette, WY. But supposedly this is the only example of Wal-Mart and Kmart in the same building... very surprised the Kmart still exists. The mall opened in 1970 with two anchors; Kmart opened in 1976 replacing Grant City, while Walmart opened around 2002, replacing the defunct mall anchor Bradlees.
The Labelscar post:
http://www.labelscar.com/massachusetts/new-harbour-mall

Some pictures from websites:
An old (2001ish) one:


From the mall management website, note the Wal-Mart on the left and Kmart on the right.


There are more cars on the Wal-Mart side.

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