Community Chat

[SeaMaiden]

Sears is on the brink of catastrophe as stores closures loom and top execs flee the company

The company is shutting down dozens of Kmart stores this month and two of its highest-ranking executives left this week in the midst of the key holiday shopping season.

This comes following speculation among Sears and Kmart employees, suppliers, and several banks that the retailer will soon go bankrupt — something Sears has repeatedly dismissed.

Jeff Balagna, formerly Sears' executive vice president, left the company Wednesday, "in order to focus on his other business interests and pursue other career opportunities," Sears said in an SEC filing dated November 23.

Balagna did not respond to a request for comment. Sears declined to comment beyond what was stated in the filing.

Sears President and Chief Member Officer Joelle Maher also left the company this week, Sears confirmed to Business Insider. The company declined to give a reason for her departure. 

The timing of the departures — so close to Sears' upcoming third-quarter earnings report and in the middle of the holiday season — is "highly unusual," according to Mark Cohen, director of retail studies at Columbia Business School and the former CEO of Sears Canada.

Cohen, who was fired from Sears in 2004, is an outspoken critic of the company and its CEO Eddie Lampert. He speculated that the timing of the departures could be indicative of something "catastrophic" in its upcoming earnings report. 

[GSPgirl]

I thought this was a new article and they were shutting more Kmarts down.  Mine isn't closing.

[SilleeMee]

This news bothers me in the sense that it indicates how bad our economy is right now. But truthfully, I won't be missing either one of those stores. Can't remember when I last stepped foot in those stores...it's been that long ago.

[QVCkitty1]

I would be sorry to see our KMart go, because that would just leave Walmart in my small community.

[pommom]

Oh dear.  Where will I go for Kenmore/Whirlpool appliances?

[circles]

The KMart in my local Mall closed many many years ago....now has a Kohls.....the Sears which is the anchor at the other end of same Mall...might as well close...you rarely if ever see cars parked at that end of the parking lot...even at the height of the shopping season....

I haven't been in either store in forever...but when I was last in Sears it  seemed so old looking... all the merchandise looked like it was still there from when Sears first opened...it was depressing...

[SilleeMee]

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@pommom wrote:

Oh dear.  Where will I go for Kenmore/Whirlpool appliances?

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Amazon.

[goldensrbest]

Our k mart closed a few years ago, sears is old looking ,i agree i think the on line shopping is what is hurting so many stores now.

[gardenman]

Twenty five years ago Sears was perfectly positoned to become what Amazon has become. Their catalogs sold everything anyone could hope to find. They had warehouses and distribution centers set up all around the country. They sold literally everything through their catalogs.

Then their management got mezmerized by the profits they were seeing companies like K-Mart and Walmart making. They decided, "Heck, we can do what they do!" and they threw away everything that made Sears great and instead of selling everything, as they had since the company started, they started selling the same stuff you could buy anywhere else. They were so entranced with the success of K-Mart that they eventually bought the company.

Sears executives forgot what it was that made Sears great and started to copy what others were doing. A transition from a print catalog to an online business would have been easy for Sears. They had the infrastructure already in place. They had vast experience in order fulfillment. They were perfectly positioned to become what Amazon is now, and they threw it all away.

There's been an unending string of bad decisions since then, most recently they started selling their Craftsmen tools through other outlets, so there's even one less reason to shop at Sears now. Sears is the perfect example of how losing sight of what made a company great leads to its downfall. Sears became a great retailer because you could buy anything and everything through their stores/catalogs. They then decided to become "just another store" and like so many other stores, they killed themselves.

Historians will look back at what Sears was twenty five plus years ago and project what would have happened if they'd simply kept doing what they've always done, only transition it to digital. Chances are Amazon today would just be selling books and music knowing they can't compete with Sears. Sears executives bet the company that the future lay in stores like K-Mart and not maintaining a huge inventory. They gambled and lost.

If you've got a successful business that's not like anyone else, maybe, just maybe that's why you're successful. When you start changing what made you successful to be like everyone else, you lose your edge. Sears has lost their edge is heading heading to a cliff. They could have become what Amazon is by simply sticking to what they'd always done. But no, the lure of more profit at less cost led them astray.

[wildcat fan]

I like to get Land's End clothing at Sears.  I purchased several items there during Thanksgiving weekend sales.  I don't bother to look at anything else there besides the Land's End.  

A couple of years ago, I went to Sears for a new microwave.  Their cost was not only higher than Lowes and Home Depot for the same microwave, but Sears also charged about twice as much for delivery and installation.  They can't compete at those prices.