Sears has been crashing for the past decade.
The retailer, which also owns Kmart, reported a loss of $454 million in the third quarter. The massive loss is the latest in 10 years of declining same-store sales.
Sears’ comparable sales declined 9.6% in the third quarter, while Kmart’s declined 7.5%.
Executives blame weak results on warmer-than-usual fall weather that kept consumers from buying items like coats and gloves. They say that the brand is investing in its “Shop Your Way” loyalty program, which offers personalised deals.
But many retail experts believe Sears is denying a darker truth: its is beyond the point of returning to its post as a major US retailer. In fact, it’s in danger of not existing at all.
“Sears is like a rudderless ship, devoid of compass heading, manned by a demoralized crew and worth nothing more than the old rotten boards and nails it’s made of,” Doug Stephens, founder of industry website Retail Prophet and author of “The Retail Revival: Re-Imagining Business for the New Age of Consumerism” told Business Insider.
“If they really care about their retail business, which frankly, is debatable, nothing short of a complete and radical brand and positioning transformation will make any difference,” he said. “Even then, I wouldn’t hold out hope. The time for bold and decisive action has come and gone.”
Sears spokesman Chris Brathwaite told Business Insider that Sears is “highly focused on restoring profitability to the company.”
The company’s EBITDA — or net income with interest, taxes, depreciation, and amortization added back into it — have been improving for five quarters. He said many of the company’s losses were a result in inventory investments for the holiday season.
But turnaround efforts by CEO Eddie Lampert won’t make Sears a place Americans want to shop, retail expert Robin Lewis, who is the author of industry website The Robin Report, told Business Insider.
Sears has spun off Land’s End and its auto businesses to make money.
“Eddie is running out of sleight-of-hand financial tricks and asset sales to turn a quick buck and appeal to short-term, short attention-span investors,” Lewis said. “Far more cash is bleeding out than is being generated, and that’s unsustainable.”
“What I see in their future is no future,” Lewis said. “The end is near, very near.”
Sears once dominated American retail, and didn’t respond to competitors like Walmart, TJ Maxx, and JCPenney, according to the book The New Rules Of Retail co-authored by Lewis and Michael Dart.
Between 1998 and 2010, the number of competitors within a 15-minute drive from any Sears grew from 1,400 to 4,300 stores, according to Lewis.
Sears could have fended off competitors by altering its strategy. Instead, the company’s complacency led to a massive loss of market share.
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