Sears was hard hit during the recession and outmatched in its aftermath by shifting consumer trends and strong rivals, but at it peak had over 4,000 stores and was a major force in retail on both sides of the border. But times changes and Sears hasn’t had a profitable year since 2010 and has suffered 11 straight years of declining sales.
With all of Sears past troubles a bankruptcy judge has blessed Eddie Lampert’s $5.2 billion plan to keep Sears’ iconic business going, saving roughly 425 stores from closing their doors and the loss of over 45,000 Sears jobs.
This is a great win for Lampert and Sears, but the battle is far from over as the company’s long-term survival remains an open question.
Lampert’s plan for Sears is to invest in smaller stores like the new appliance-focused stores that are between 7,000 and 20,000 square feet, while a typical Sears averages 138,000 square feet. The smaller stores specialize in selling appliances, but customers can also order other Sears products also making it a scaled down but rebranded version of the Sears stores of old.
Sears recovery and reinvention plans for the company will also include closing additional stores that don’t make money. However, that means giving up some of the economies of scale and power to negotiate with suppliers that bigger players enjoy, but that is only one of the obstacles as you can count on stronger competition from Amazon, Target and Walmart during Sears’s rebuild as they are not going to sit around and just watch what is happening which will take its toll on the iconic retailer as it tries to rebrand itself.
2019 will be an interesting year for the 132-year-old retail, and one that will see if Lampert can bring back Sears from the brink of extinction.
By Jamie Barrie