Sears' Collapse Is Now 'Inevitable'

Sears store closedWikimedia CommonsSears is closing hundreds of stores around the country

Sears is shutting down hundreds of stores.

The chain announced today that it is accelerating store closings to 235 this year, 100 more than previously planned.

Sears’ total net loss for the quarter was $US296 million.

Sears’ and K-Mart’s collapse is “inevitable” and could happen by the year 2016, retail analyst and author Robin Lewis writes on his blog.

“These two retail brands are dead men walking,” Lewis writes.

“As a retailer they’re at the point of no return,” David Tawil, cofounder of Maglan Capital and an expert in distressed retail companies, told Business Insider earlier this year. “The real question now is when does it all end?”

The company, which has currently has 800 namesake stores and 1,100 Kmart stores, has lost $US6 billion since 2012. Suppliers are growing concerned that they won’t receive payments for merchandise.

Lewis believes Sears Holdings’ inevitable decline started decades ago.

He says that executives spent too much time investing in side businesses and ignored the competition.

“This did not have to be fatal; however, it actually starved those resources (capital and management) from the retail business, leaving it unable to respond and adapt to the needs of the evolving consumer and marketplace,” Lewis writes.

We reached out to Sears for comment.

To offset losses in the retail department, the company is planning to ramp up e-commerce and make the most of its extensive real-estate properties.

Sears has been leasing store space to other retailers and is considering “spinning off hundreds of its properties as a real estate investment trust,” reports Lauren Coleman-Lochner at Bloomberg News.

Selling and then leasing back retail space would be a way for Sears to generate some quick cash, analysts told Bloomberg.

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