I used to be convinced that Sears would be done by the end of this month, February at best. Now I'm starting to change my mind. The way things have been going, I'm starting to think they'll actually try to keep Sears on life support for another year or two.
They seem to be closing two-three stores at a time, just prolonging the suffering while whatever they have planned from the start takes place in the background.
At least that's what it looks like to me.
@5iek I agree. The liquidators should be done around Feb. 1, so they should all be available for a huge list. They usually announce it in advance though. Surprised they haven't yet.
Many of the February stores closings have been pushed up 2 weeks so I'm figuring another closing list (that or a bunch of stealth closings) are going to hit right around there.
I don't Know why he doesn't at least end the Kmart side. How are Kmart stores in freaking Hamilton Montana, or Minot North Dakota helping him with his Kenmore numbers? Focus on the Sears if you must, but at least put freaking Kmart out of its misery. They literally have 1 Profitable location and it's in Guam, 1000's of miles from the US.
This is odd. Since Christmas, we have barely gotten out 2-3 Kmarts and Sears. Not sure why he is suddenly fumbling at the 5 yard line. I thought for sure, 90+ stores would have been announced after New Years Day. This is weird.
First, get someone who knows how to run it and can raise cash to pay for building new stores. But then again, the three new Home&Life were built and did not do well, apparently the same as the first pilot store in Fort Collins.
The New owner of Carsons has actually opened a physical store, in Illinois, and have broken ground on additional stores. Sears is next.
Last year the big closure rounds (post-buyout) weren't announced until late-August. Let's just wait to the summer to see how it goes, because right now all non-closing stores just got through the holidays when sales are at their highest in retail. Once summer hits and they're at their lowest, let's just see how many of these survive. Okay? Okay.
Remember, it takes tons of operating capital to keep operating stores. You have payroll, utilities, inventory, marketing, etc. At this point, it would not make any sense to keep stores operating if it generates negative EBITDA. It CAN be cheaper to just close non profitable stores until the lease ends (i.e Dark Store) which is not all uncommon in retail.
On a side note, Circuit City is not operating under teh original parent company. I know the history very well as I used to work at that company. Circuit City filed for Chapter 7 shortly after Chapter 11. It had to liquidate and auction ALL of it's assets. This would include it's inventory, equipment, branding, and basically anything they owned. This was to pay back it's secured and unsecured creditors. This forced the company to become defunct. The rights to the Circuit City name, it's a website, and it's customer mailing list, was acquired through a liquidation auction to Systemax in 2009. Interesting enough, Systemax also owned the rights to the CompUSA name when it also filed for chapter 7.
This was basically done to acquire Circuit City's existing web customers at the time.
Eventually, Systemax got out of the CE business completely and sold off each of their branding (TigerDirect, CompUSA, and Circuit City). Interesting enough, the Circuit City name again has been acquired by another company.
There is a 99% possibility that TransformCo will be forced to file for Chapter 7. I guarantee that it's branding and the rights will live on as it's gets sold through a liquidation auction. There isn't very many assets left in the books. In fact, many defunct retailers are still living online. Check out HHGregg, Montgomery Wards, Carson's. These brands live only online however, they have not the original holdings. They don't carry any of the original products and frankly these holding companies are pretty much banking on peoples nostalgia for easy money. This is where Sears will be going. Mark my words.
Real talk. Transform exists for these reasons. 1) whatever brand equity still exists in Kenmore that has yet to be sold. 2) Craftsman royalties. 3) future tax writeoffs from operational losses for the rest of ESL, it doesn't really need the carryover from Sears Holdings anymore, it's generated plenty of its own. 4) The real estate. There's still vaguely things like ServiceLive, Sears Home Services, the Internet Site, Sears Credit, and Shop Your Way that Eddie has delusions of getting real value out of, but those are going to be about as valuable as Circuit City's residual website and credit properties were/are without their mothership (you can still buy stuff off of Circuit City's website by the way, and it's a much better selection than Sears without having to redeem SYWR points just to get to MSRP). He's still thinks he's an auto genius too because he still has some nostalgia for his AutoZone success, but he may be done with that after the DieHard sale.
Here's the thing, The real estate is worth more with open stores than it is as defunct empty space. There's a calculation that's made at every location weighing the ongoing operational loss vs. the real estate, and a tipping point that results in closure when you consider how quickly it might be leased/sold, the net net, how willing parties might be willing to pay you to get rid of you, the taxes, how quickly it might deteriorate when you turn off utilities, maintenance, and the rest. Transform/ESL isn't staffed to pay really close attention to this at a micro level either, and is at the mercy of the commercial estate agents pimping the properties and whatever management might exist maintaining the properties to varying degrees. Certainly Eddie isn't doing it himself if it's out of his stingy and broke pockets that owe money to everyone. Sears the retailer is done. He might have some delusions of trying to transform SYW and some Internet thing for the umpteenth time, but over tens billion in net losses while destroying probably guaranteed hundreds of billions in future revenue has proven that he has no idea what he's doing. He can only transform value into ash. When it comes to execution and the incompetents he hires, they can only turn value into ash.
Company has to stay open. Craftsman deal hasn’t fully closed yet. That’s worth a few hundred million.
Die Hard is being sold, but license refined to use for free basically.
Kenmore is worth much less without Sears still standing (firesale). SYW and the credit card revenue is worthless without the stores.
I expect that Sears will eventually be a mostly online website-based shell of itself. They will need to get their online fulfillment in order before they can close off the stores though.
It’s effectively a slow liquidation of the business. They want to minimize the burn but it has to keep going because they can’t exit the positions at a decent valuation otherwise.
Ya, I think you're right and that's why this is so colossally frustrating! This is like that baseball team, up 20-0 in the 9th inning, the pitcher is throwing a gem through 8 innings, but the manager decides to pull him and put some backbencher into the game to get some practice. What does he do? He starts walking people, giving up base hits, before you Know, the bases are loaded and he needlessly complicates the game.
Or the football team, up big in the 4th Quarter, coach decided to put in his 3rd string QB for some "work". Instead of just handing the ball to his RB, to draw down Clock, he starts trying to excite the crowd by throwing razzle-dazzle 50 yard pasees, and guess what? He throws some interceptions and gives the other team some momentum.
Look, Eddie. We are at the precipice of Victory. We are at the precipice of something Beautiful happening (i.e., Kmart/Sears closing). We are so close I can taste it. Don't blow it now. We are in the 9th inning with 2 outs. Tell your pitcher to throw strikes and end the game! We are at the 2 Minute warning in a NFL game with a lead. Hand the ball to your running back, and run down The Clock. Let's finally end this thing without this teeth-pulling. Announce like 80-90 stores now, and when those run out, then close the rest of this company. Please leave NO vestiges left. Nice break, clean and simple. END IT! Victory is ours, as the sports analogy goes, "DON'T SNATCH DEFEAT FROM THE JAWS OF VICTORY". You have this in the bag. You're so close to giving me what I have dreamed about for 20 Years. End this now, be a good boy. Don't drag this out. Please........
He’s getting a $250 million payment from Stanley for the rest of the Craftsman plus 3.5% on whatever Craftsman was sold at Lowe’s. That’s about 2 quarters of operation. There’s still the penn station Kmart lease and Kenmore. This can easily last into next year.
People have been trying to predict the demise of Sears and Kmart for the better part of the past decade. When you have such an unusual person such as Eddie Lampert pulling the strings, trying to make nice and easy predictions is futile. He will likely drag this out as long as he can. His past behavior has demonstrated this.
I don't know if Eddie has enough money to drag it for much longer.
@130FzwGv-kma it's only tuesday , info comes in dribs and drabs now
Have there been any this week besides the one in Puerto Rico?
since the new year it looks like 3 to 4 stores a week, if this slow drip goes on for a year, that's at minimum 156 stores over the course of this year. If they close 4 a week that's 208 which is more than the sum of all stores current. So look for 24 weeks with 4 stores closing and the rest with 3. That's if they stick with current behavior, the fact that it's no longer a public company with shareholders they have no responsibility to release a "closing list".
You know what they say about opinions....this has been played out over 16 years already. Get a grip.
As I said, my theory is they are just waiting for the last of the stores closures from the last round to finally finish. That way they can set up the liquidators for the next batch of stores.