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Tuesday, December 27, 2011

End of 2011

Happy new year, for they may be numbered for Sears/Kmart...

SHLD announced year-to-date results as of 12/25/2011 with Kmart same store sales down 1.8%, continuing the familiar news of declining sales, revenue, profit, etc.

From the press release:
"While our past practice has been to keep marginally performing stores open while we worked to improve their performance, we no longer believe that to be the appropriate action in this environment. "

What does that mean? Basically, over 100 stores will be closed in 2012... as in they know a bunch of stores are "marginal" and haven't done diddly-squat to improve them, and are now going to pay the price. Here's more from the PR:

"Given our performance and the difficult economic environment, especially for big-ticket items, we intend to implement a series of actions to reduce on-going expenses, adjust our asset base, and accelerate the transformation of our business model. These actions will better enable us to focus our investments on serving our customers and members through integrated retail - at the store, online and in the home," said Chief Executive Officer Lou D'Ambrosio.  Specific actions which we plan to take include:
  • Close 100 to 120 Kmart and Sears Full-line stores.  We expect these store closures to generate $140 to $170 million of cash as the net inventory in these stores is sold and we expect to generate additional cash proceeds from the sale or sublease of the related real estate.  Further, we intend to optimize the space allocation based on category performance in certain stores.  Final determination of the stores to be closed has not yet been made.

Basically, this means they have no clear plan for recovery other than continuing to close stores, which is not a good plan at all. "Integrated retail" isn't going to work - MyGofer was a flop (even Wal-Mart now has site-to-store online shopping), Sears.com marketplace isn't going to beat Amazon on price, Walmart has layaway nowadays... why would most people still shop at a 40-year-old Kmart whose last remodel was in the 1980's other than to beat the crowds at large Walmart supercenter? Yes, Kmart still has profitable urban/city center locations, but even Walmart is adapting with smaller footprint urban stores and continued invasion of major cities like Chicago, NY,  Philly, DC, San Francisco, and Boston.

from
http://www.searsholdings.com/pubrel/pressOne.jsp?id=s16310_item98114

UPDATE: A partial list of store closings can be found here.
http://searsholdings.com/about/122711_close.pdf
UPDATE 2: As noted per some astute readers in the comments, some of the closing stores were profiled previously on this blog, for example:
http://superkmart.blogspot.com/2010/09/hendersonville-tn-big-kmart.html

Monday, November 28, 2011

Super Kmart, revisited



Store 3147, Kingsport TN (de-Superized), copied from other website

#3251, Indianapolis IN

#3251, Indianapolis IN

#3251, Indianapolis IN

Store 3555, Cambridge OH

#3575, Detroit MI

#3575, Detroit MI

#3575, Detroit MI

#3575, Detroit MI

#3575, Detroit MI

3785 Newport News, VA (This store pics from someone else's website, sorry I forgot who...)

3785 Newport News, VA 

3785 Newport News, VA 

3785 Newport News, VA 

3785 Newport News, VA 

3785 Newport News, VA 

3785 Newport News, VA 

3785 Newport News, VA 

3785 Newport News, VA 

3785 Newport News, VA 

3785 Newport News, VA 

3785 Newport News, VA 

#3786 Medina OH

#3910, Lorraine OH

4108 Portage, IN

4108 Portage IN

4203, Indianapolis IN

4203, Indianapolis IN

4203, Indianapolis IN

4438 Indianapolis, IN

4438 Indianapolis, IN

4438 Indianapolis, IN

4438 Indianapolis, IN

4745 Ashtabula, OH

4745 Ashtabula, OH (Note that it is in a mall!)

4745 Ashtabula, OH

4758 Concord, NC

4758 Concord, NC

4758 Concord, NC

4858 Caguas, Puerto Rico (!)

4910 Mentor OH

4913 Terre Haute, IN

4913 Terre Haute, IN

4928 Queensbury NY

4935 Moon Township, PA

4935 Moon Township, PA

4936 Unionstown PA

4936 Unionstown PA

4937 Chillicothe OH

4937 Chillicothe OH

4938 Round Lake beach IL

4938 Round Lake Beach IL

4939 Warren OH

4953 Charleston SC

4953 Charleston SC

4964 Hillsboro OH

4966 Cleveland OH

4966 Cleveland OH

4966 Cleveland OH

4966 Cleveland OH

4966 Cleveland OH

4966 Cleveland OH

4984 Tinley Park IL

4988 Norfolk VA

4995 Taylor MI

4995 Taylor MI

4996 Tucson AZ

4998 Roseville MI

4998 Roseville MI

7353 Johnson City TN

7525 Bradley IL

7525 Bradley IL

7634 Port Huron MI

7634 Port Huron MI

9814 Detroit MI

9814 Detroit MI

9814 Detroit MI

9814 Detroit MI

9814 Detroit MI

4997 Virginia Beach, VA

From our own blog, spotlight on the Fremont OH Super Kmart:
and the Lubbock Super Kmart
(both have since been de-supersized)



A brief unofficial history of Super Kmart Centers:
Kmart Corporation reached $1 billion in sales in 1966, a full 13 years before Wal-Mart reached that milestone, and opened its 2,000th store in 1981. But recognizing the rise of Wal-Mart, Kmart began trying to diversify in 1984, buying up a seemingly random collection of big boxes such as the Sports Authority, OfficeMax, Builder's Square and Borders Books and Music Group. By 1994 it abandoned the strategy , seeking instead for the one-stop shopping of a Super Center and by 1997  Kmart had converted 107 stores to Super K format. 

The first Super Kmart to be built was in Ohio, and the first existing Kmart to Super Kmart conversion was in 1994 (from a store that opened in 1992 in Fresno, California - with projections of $80 million/year in revenue for the Supercenter. This store is now a RV sales lot, while a Walmart Supercenter which opened next door is busy as ever). There were grand plans of converting most Kmart stores into Super Kmarts, or at least offer some groceries. In 1996 Super Kmarts hit $3.7 billion sales, and in 2001 pre-bankruptcy, there were 124 Super Kmarts. In 2002, the peak, there were 129 (out of 2113 Kmart stores), but then 12 were shuttered, and the trickle downward toward zero continued for the next decade...  But at the peak in 2002, Super K's sales per square foot have been estimated at a now-impressive for Kmart $308, below Wal-Mart's $400, but higher than the forecast for SuperTarget of $290 - and at that time, there were only 80 SuperTarget and 1180 Walmart Supercenter stores and 152 Meijer stores. Following the merger with Sears, a grand plan of Sears Essentials was hatched – first hybrid conversion opened in 2005 with public plans for 400 more by 2007, but a lack of investment quickly sank this potentially decent idea. Super Kmarts were an afterthought, and most stores were closed. In the recent years, the few remaining Super K’s have been “de-supersized” into normal Kmarts, such as those stores in Greensboro NC, Burlington NC, Lubbock TX, Thornton CO, Charleston SC, Fremont OH, etc, losing the grocery department. Sears Outlet sometimes took over the vacated space. The last few Super Kmarts are mainly in the midwest (Ohio, Michigan).

Super Kmart’s strategy may have been flawed – for example, papers have been published on the geographic locations of Super Ks. Many believed that Kmart expanded too broadly with locations far flung apart, resulting in insufficient market saturation, increasing both marketing costs and distribution issues. Distribution was probably a major problem – with the demise of the American Fare hypermarket and struggles with Fleming and other food distributors, Kmart never had the leadership to grow its local supplier, national supplier, and distribution truck networks as well as Wal-Mart. In the 1990’s, there were attempts at mergers with then-leading supermarket chains such as Albertsons, but ultimately, nothing resulted.

At any rate, we present a small collection of Super Kmart photos, most by our blog, some from other online sources (tried to give the credit). Many Super Kmarts had Olan Mills portrait studios, K-Cafes converted to Little Caesars, barber shops, banks, flowers, deli, auto centers, Kmart Express gas stations, etc… 

Map of remaining Super Kmart locations in the continental US, around 2010

Site plan of Johnson City TN Kmart 7353 with highlighting of the perishables section that would be replaced with a tenant such as Sears Outlet or sub-leased.


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