Sears selling out - just announced

[WR250F]

Hardware and Outlet stores

http://www.chicagotribune.com/business/ct-biz-0224-sears-20120223,0,4483819.story

Just announced.

Looks like the spin offs are starting.

Who knows, maybe they'll sell to someone who has their act together

 

[volunteers]

craftsman gone?

 

[reddog289]

Glad I found my USA MADE 1/4 ratchet at KMart today.

 

[Skin]

craftsman gone?

never. The brand has been spun off since the get go. Kmart/Sears have their pitfalls but Craftsman has always been and will remain a cash cow.

 

[nicks78camaro]

Who knows, maybe they'll sell to someone who has their act together

Maybe someone who understands what Craftsman USED to stand for....

 

[gt eunuch]

Seems like they are mostly getting rid of outlet and their 'hometown' stores (hometown stores have a hometown tag under the sears name and I am assuming these are more prevalent in rural areas)

Not a big hit to most of us, but hopefully a benefit will come from this overall.

 

[reddog289]

Another thing, Last time I went to the Sears Outlet by me. A big For Sale or Lease sign greeted me.

 

[ajchien]

What I don't understand is that last sentence of the whole article. Sears stock rose, given all the bad news. Weird how that works.

 

[kartracer55]

We could form Garage Journal LLC and buy out the craftsman brand...

 

[Ed_EOD]

What I don't understand is that last sentence of the whole article. Sears stock rose, given all the bad news. Weird how that works.

That's because it is seen as a positive move. Sears is generating cash by selling real estate and shedding stores with lagging profits.

 

[arizonaadam]

So they quit spending on stores to focus on online business?? Uh, their online experience is awful. Would have done better to sell their brands through amazon.

 

[Danglerb]

The news today is a road sign, not a tomb stone.

Sears is raising some cash, but not setting any real new direction I can see, just selling some assets that have value like the Hawaii store for $250M.

The outlet stores around me are a mix, but all odd operations. The Santa Ana, Calif store is in a LARGE corner of a whole city block of warehouse and distribution space Sears appears to own, and last I looked it was a forest of floor models and returned appliances for not much if any discounts vs normal sale prices. The business model appears to be to unload this junk to the unwary odd consumer without impacting any sales at regular stores, with periodic likely insider sales to actually move merchandise at heavy discounts to smaller stores or swap meet sellers.

The Brea, Calif store is totally different, its a large store front in a typical non mall (big collection of secondary retail stores in a common parking lot, but no anchor stores). This one has a much fewer appliances than a regular Sears, about a 50/50 mix of non Sears brands, and the upper floor is all clothing of a end of season, returns, clearance variety. I've been there about a half a dozen times in the last few months because members of the Sears reward program get an email every Tuesday for one free item of apparel (two Dickies shirts, 4 Lands End, and a few Sears brands so far).

I think the second type of store is more common, they run them already as a separate enterprise with the exception of employee shirts having a Sears logo. These stores have no roots, like a Hickory Farms that shows up in a mall during the holidays and is gone a week after them.

OTOH I don't see the point in selling or closing them, unless Sears plans to dump a BUNCH of product to some third party instead of extracting some profit, or they plan to put a good sized area in stores for clearance good, which is what I assumed they wanted to avoid.

IMHO Lambert the major stockholder and Chairman has damaged Sears making very poor choices that has led to lower profits, and that is the bottom line, poor profits. Premium goods are what you need for profit, and they gave us Evolv and Chinese Craftsman.

 

[USMCdodge]

so they are selling the sears in hawaii?!? That BLOWS but the afterthought of closing prices comes to mind...

 

[kippieland]

I have always wondered why they are in the malls next to Macy's and Penny's. But at the same time, whats the point of having a Kmart and Sears in the same town?

I over-heard some association talking the other day when I was shopping at Sears. They said that they want Sears to be more of an online dealer, like Amazon, instead of in the Malls. Maybe we will only Sears online in the future....not sure!

 

[browntown]

The outlets always annoy me in that being individually owned, their receipt coupons don't generally work at the big sears stores. Plus, their selection is usually pretty bare.

The interesting part in that article is about the real estate. In business class many moons ago we were taught Ray Kroc's addage that McDonalds is not in the hamburger or restaurant business, but in the real estate business.

Too bad no-one will buy the box blights when they're empty these days. Ray Kroc wouldn't have ******* an "anchor" store in a mall. Our local circuit city is an indigent clinic now. They did finally re-carpet the place, but it is still kind of silly.

 

[William Payne]

I have heard that same thing about mcdonalds, here in new zealand in the town where I live mcdonalds spent 1.3 million nz dollars on a little bit of land on a corner by a bridge heading out of town just because of the passing traffic. They are never empty either.

 

[expfcwintergreen]

Sad, but Sears prices on things I buy are way, way out of line with the exact same items at Walmart. I can't remember the last time I bought anything at Sears that didn't say Craftsman on it. Their online prices on other brands of tools such as SK, the last time I checked, are in Fantasy Land on Make Believe Street.

 

[allinon72]

When you lose 2.4 billion in a SINGLE quarter, this is something you do out of necessity, not out of choice.

The Sears Hardware stores are a joke. I see inventory in there that is from the early 90s.

 

[4x4gearhead]

When you lose 2.4 billion in a SINGLE quarter, this is something you do out of necessity, not out of choice.

The Sears Hardware stores are a joke. I see inventory in there that is from the early 90s.

Wouldnt a lot of things from the early 90's be better quality than the junk they sell now? Either way sears can go down in a ball of fire for all I care, just another company that sells Danaher junk.

 

[G_P]

The Sears Hardware stores are a joke. I see inventory in there that is from the early 90s.

I would prefer that over the made in China **** they have now

 

[djjsr]

According to CNN, Sears will continue to sell Craftsman and Kenmore products.

 

[kythri]

The outlets always annoy me in that being individually owned, their receipt coupons don't generally work at the big sears stores. Plus, their selection is usually pretty bare.

Outlets are not the same as Hometown stores.

Hometowns are the privately-owned "franchise" stores.

I can see how closing the outlets makes sense - there's really no point in moving discontinued or customer-returned stock from store to outlet to discount it and sell it. That can be done at the store without having to pay additional leases, wages, etc.

But the Hometown stores? Don't really understand how they save money by getting rid of their network of operators PAYING them to sell their goods.

And what are the Hometown stores being spun into? Are they still going to be selling Sears-branded goods, or what?

I hope we don't see the Hometown stores fold up. Granted, I don't put a lot of business their way, since I've pretty much got everything I need from their limited tool selection, but it's nice having another option for appliances, electronics, etc. in smaller towns that don't have an actual full Sears around.

The one here always seems to be doing a decent business, so I'm hoping their supply of merchandise doesn't dry up.

 

[jeffmoss26]

2 or 3 sears hardware stores in this area have already closed.

 

[rsanter]

one thing that companies do is that they will sell their property and then lease it back.
this helps in short term cash in hand but long term increases the operating costs.

often I have seen this done when the leadership wants to short term improve their position and increase their stock values so that upper management can sell off a bunch of their stock or sell off the company because they want to be paid and dont care about the long term of the company.

it can also be done in a last ditch effort to stay alive a little longer.
in this case it would seem to be a mix of the 2....

seems to me like sears needs to evaluate where there stores make their money and get rid of all the departments that dont help the bottom line. its funny how in an age of the boom of the big box store that one of the original big box stores cannot survive. that tells me that the people running the company have their head up their ***

I havent been in a sears in over a year because to me their value as a retailer has dropped to near nothing. they are not helpfull, they dont know what they are talking about, their store is unorganized.
one of the thinggs that I think hurts sears the most is their sales and how they price their stuff.
the same things are always on sale month after month for 50% off.
what we have learned from that is that they are obviously putting too much mark up in that item and that if we want one just wait for the next sale.
this brings the precieved value down and give people the apparent indicator that all of their stuff has that high markup.
they need to lower their everyday prices, reduce the discount amount on the sales stuff and have a little more variety of what goes on sale.
for craftsman tools they need to have good quality USA made stuff that has a true lifetime warranty even if they need to raist the price a little.
they can have a cheaper line (like they almost always have had) that can be made in china that has a more limited warranty
their premium line needs to be and stay premium and they need to pull their head out and start doing things the right way for todays market

bob

 

[chrenan]

They also need to evaluate whether they should have an online presence or not. Frankly, I was shocked to read that they were thinking of getting out of bricks and mortar and being a solely online store. The only thing worse than Sears in store service is their online service. Sears online is terrible, they are the worst I have ever experienced in terms of customer service, ease of using the site, ease of payment.

The writing has been on the wall here for a while when it comes to tools in Sears. The tool department in my local store hasn't been re-stocked in a year. Bare shelves, a few left over tools, its like Soviet Russia in there but without the luxury of a 5-year plan from central intelligence in Moscow.

 

[ishiboo]

Outlets are not the same as Hometown stores.

Hometowns are the privately-owned "franchise" stores.

I can see how closing the outlets makes sense - there's really no point in moving discontinued or customer-returned stock from store to outlet to discount it and sell it. That can be done at the store without having to pay additional leases, wages, etc.

But the Hometown stores? Don't really understand how they save money by getting rid of their network of operators PAYING them to sell their goods.

And what are the Hometown stores being spun into? Are they still going to be selling Sears-branded goods, or what?

I hope we don't see the Hometown stores fold up. Granted, I don't put a lot of business their way, since I've pretty much got everything I need from their limited tool selection, but it's nice having another option for appliances, electronics, etc. in smaller towns that don't have an actual full Sears around.

The one here always seems to be doing a decent business, so I'm hoping their supply of merchandise doesn't dry up.

Because they Hometown stores will likely continue on basically the same path, in the meantime Sears gets a short-term cash influx it needs, while selling off what amounts to what are basically independent retailers of their products.

The Hometown stores will probably still sell all the same stuff, accept Craftsman warranty returns, etc. General Growth will plan to cut some costs and make them more profitable and loose some or all of the franchise fees to Sears. (Depending on how they're rebranded, if they are.)

These stores sell a variety of appliances - not just Kenmore - and with the China-positioned tools at a lower price point for Sears, it'll make sense for them to continue selling Craftsman. There's no point in moving over to cheap Chinese tools and trying to compete with everyone else.

Since the hometown stores are independently owned, most of the ones that are in business are probably at least somewhat profitable, so there is little concern for General Growth "closing" them, they probably can't.

It'll be interesting to see though if Sears was desperate enough to not restrict the sale/branding of these stores... you would think in the position they are in, it would be written up so that they weren't sold off and rebranded as one of their stronger retail competitors "hometown" stores. You would hate to see them sold and turned into Lowes Hometown Appliance stores or something, but I doubt this is possible.

 

[Ign]

snip... Sears online is terrible, they are the worst I have ever experienced in terms of customer service, ease of using the site, ease of payment.

...snip... Bare shelves, a few left over tools, its like Soviet Russia in there but without the luxury of a 5-year plan from central intelligence in Moscow.

So true! Probably the worst place to try to shop online.

There was a WSJ article about how Sears refuses to even pay for basic upkeep at their stores, and profits reflect it:
http://online.wsj.com/article/SB10001424052970204517204577042442598865710.html

Note they say:
"Mr. Lampert, who serves as company chairman and whose ESL Investments Inc. controls more than 60% of Sears shares, hasn't given a media interview in more than three years. But he has previously denied his endgame was to dismantle Sears and sell off real estate."

I hope my hometown store folds up. I never go in there. Employees are either rude, incompetent, or pushy (they work on commission). Prices are terrible. Selection is very poor.

Sears also needs to start having REAL sales. Ever notice how their sale dates are only good for 2 or 3 days? And generally the sale isn't even worth it - like 10% of select Kenmore appliances.

Whatever happens to Sears, they did it to themselves.

I haven't seen any mention of OSH, are they still around?

 

[jjjrmx5]

Because they Hometown stores will likely continue on basically the same path, in the meantime Sears gets a short-term cash influx it needs, while selling off what amounts to what are basically independent retailers of their products.

The Hometown stores will probably still sell all the same stuff, accept Craftsman warranty returns, etc. General Growth will plan to cut some costs and make them more profitable and loose some or all of the franchise fees to Sears. (Depending on how they're rebranded, if they are.)

Serveral of the well stocked Hometown stores in my area have closed starting in Nov last year.

It's a shame because they really carried some things the big stores did not.

The bad part about the Hometown stores is that as Sears business has slowed, so has thier business as thier competition locally is the Ace Hardware stores on the small scale and big box stores like Home Depot and Lowes for the big scale .

For the big Sears stores, as several have mentioned, Sears ran off the premise of being hooked into and onto the local Malls and on top of that buying the property they put the store on. Unfortunately, in this day and age, both are antiquated philosophies as traditional malls are now being replaced by large strip malls and open air retail developments and the big box stores are far cheaper to build and maintain as they are usuall a singe story and not part of a larger attached building system that you have to pay high rent due to shared systems, high dollare maintnance items and securty.

Take a look at how a Best Buy or Home Depot is built and the high end is brick walls with bar joist flat roof with no drop ceiling and cheaper is cinder block or vertical joists metal I beam frames/pole barn type constratuon with exterior sheathing and padded insultion interior walls. All simple but cheap as &^* to build.

As stated above, it's sad to see one of the first users of big box retail fail by not keeping up with changes in retail climates , emvironmetns and business models.

 

[Stuey]

The numbers don't make a lot of sense.

I just looked up Home Depot's figures - 28% more revenue with more than 700 million in profit. Sears has less revenue, but a lot of losses. Granted they're not competitiors, but still...

Conclusion - many costs, expenses, and dead stores are dragging everything down. Sears needs to get rid of all that dead weight before they can even think about boosting sales.

Lowes' 4Q report is coming out next week.

 

[t1r2u3s4t]

ESL Investments Inc. is probably converting Sears Holdings' assets to cash to pay off their equity investors. When the Sears Holdings' cash runs out, they will file for bankruptcy and stiff the stock holders. This is classic really.

 

[kythri]

What exactly are they "selling" when they sell a Hometown? I thought these were independently owned/operated.

That's the part of the thing I don't understand at all.

 

[98TJ]

so they are selling the sears in hawaii?!? That BLOWS but the afterthought of closing prices comes to mind...

No kidding. Now what am I supposed to do while the wife is shopping?

 

[mrshaun]

I call on a sears store and these guys go all over the place cleaning up the other shops and training the techs how to work. They use mainly snap on tools, ad grove about the sears craftsman stuff.

 

[Joe B.]

ESL Investments Inc. is probably converting Sears Holdings' assets to cash to pay off their equity investors. When the Sears Holdings' cash runs out, they will file for bankruptcy and stiff the stock holders. This is classic really.

ESL owns 61% of all Sears Holdings Stock. They are in so deep they can't get out.

 

[saturnman]

does anyone remember the "powercraft" tools from montgomery wards? my dad loved them, they would never disappear.........

 

[kythri]

does anyone remember the "powercraft" tools from montgomery wards? my dad loved them, they would never disappear.........

Powr-Kraft was good stuff. I've got a few pieces floating around, as does my dad.

It's a few years old, but Wikipedia had this to say:

In July 2008, it was announced that DMSI was on the auction block, with an auction scheduled for August 2008. Catalog retailer Swiss Colony purchased DMSI on August 5, 2008. Swiss Colony has announced that it will keep the Montgomery Ward catalog division open. The Web site launched on September 10, 2008, with new catalogs mailing in February 2009. A month before the catalogs' launch, Swiss Colony President John Baumann told United Press International the retailer might also resurrect Wards' Signature and Powr-Kraft store brands.

 

[mlittle29]

What I don't understand is that last sentence of the whole article. Sears stock rose, given all the bad news. Weird how that works.

Totally agree. That makes no sense. There is something that the investors are not telling us.

 

[djjsr]

If Sears gets rid of unprofitable sectors of it's business, it should make more profit. Investors are speculating that the stock is cheap now compared to what it may be down the road. Buy low, sell high. The active demand for the stock pushes the price up just because of the speculation.

 

[welder4956]

Seems like Sears may have come full circle. They started out in mail order and are evolving into online version of mail order.

 

[cdseven95]

I call on a sears store and these guys go all over the place cleaning up the other shops and training the techs how to work. They use mainly snap on tools, ad grove about the sears craftsman stuff.

Read this a couple times... What?