A spokesman for Sears recently announced that they will be closing 46 Kmart locations, 31 Sears stores, and cutting about 5,300 jobs. This announcement came after they stated in their second quarter earnings that they would be closing any unprofitable stores. The company currently has about 1,900 U.S. Kmart and Sears locations, 166 stores less than October of last year.
The article mentions the fact that most of the stores will be closing before Christmas, the most profitable time of year for retailers. The stores that won't close until after Christmas are holding going out of business sales rather than preparing holiday promotions. The author suggests that this is the company's equivalent of "raising a white flag", or giving up. Many are not expecting Sears to be around long-term. Sears Holdings were lowered to just above default status. This suggests that the company might not have enough cash to continue operations after 2016.
The fact that Sears is closing so many stores before the holiday season instead of keeping them open to generate extra revenue shows just how poorly they are doing. I don't think it's really news to many people that the company hasn't been doing well, but it may surprise some that they may not have enough money to stay open past 2016. It will be interesting to see if Sears makes any effort to turn their sales around.
I think this illustrates just how much time, and consequently consumer demand, is changing. At one point in time, Sears was THE retail store, enjoying enormous admiration, loyalty and popularity. Now, however, it appears to be a dying dinosaur. Many suggest that over the years, the company has ignored changing customer preferences. Management’s failure to understand what the customer wants has led them to their current situation. Unfortunately, I think Sears has reached the point of no return and will soon be a thing of the past.
ReplyDeleteI also feels that this shows how consumer behavior plays an important role in the aspect of Sales. As Ally said that at one time Sears was a very popular retail store at one time. But now as preference changes then the demand for that particular product shifts onto another one hence in this case causing sear to have a massive slack in sales.
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