Sears "burning money" & closing stores

[jeffg]

"THIS IS NOT WHAT HAPPENS WHEN CAPITALISM HAS TO COMPETE WITH COMMUNIST SOCIALISM."

IMO it's a riot how you're hellbent on disagreeing with me, then you proceed to write paragraphs explaining why it's the precise problem.

For all the reasons you stated, Nixon sold out our labor force on his criminal and disgraced way out of office, and Reagan after him (if anyone cares to review the "America's workers can compete with anyone's" speeches from Reagan's presidential campaigns.. hundreds of these speeches exist).

Here's the bottom line imo: our annual trade deficit just with China now exceeds one trillion dollars. If anyone of any political persuasion wishes to claim this situation is sustainable long-term, please go ahead. In the meantime, us adults have to fix the problem, hopefully before our current de facto bankruptcy becomes official. And it's a problem that didn't exist for the first 200 years of our history, before Nixon.

In fact I've found the fastest and easiest way to separate real Republicans from fake ones is to propose cutting off all trade with China, and watch their reaction. Members of the latter group will start enumerating reasons why it's not possible, real Republicans will explain it's exactly what U.S. presidents did for almost 200 years -- because it was and still is the only way to maintain fair labor, trade, environmental and other standards among Western nations. Among these other standards btw is the integrity of our major religions, e.g. the Communists have now installed party-loyal "bishops" in the RCC in China. Drop an RMB in the basket on Sunday and it's in the government's hands on Monday. Pretty neat huh? Now imagine this same interference with/control over the private business sector. Hopefully you can imagine it, because it's what U.S. and other workers in Western countries have been competing against since Nixon "opened the gates to China" and finished burying the gold standard in 1971.[this post was last edited: 5/18/2014-10:52]

 

[washman]

Meanwhile, back on topic

Kmart is simply another classic case of:

1. Losing focus of your core business.
2. Failing to reinvest in said core business.
3. Failing to capitalize on consumer trends.
4. Failing to listen to lower echelon workers
5. Putting a beancounter in charge of things.

And finally paying handsome sums of money for rewarding failure. Anyone who believes this country is a meritocracy is either brain dead or on drugs or both. A CEO is covered no matter what. Don't quote or spew nonsense about how they "risk" everything in the dog eat dog world of business. Don't expect me to cry when said CEO gets canned for a piss poor job and walks away with more money than the GDP of Luxembourg. I marvel at the "exit packages" these clowns get when they fail. Imagine what they'd get paid IF they actually did a good job? I know, I know, this is because said CEO "negotiated" his pay package when he came on board. Yeah, right. Ever hear of nepotism? You serve on my board and I'll serve on yours and all the while, we'll rubber stamp our pay packages.

What I find interesting is this. Supposedly the shareholders are the "owners' of a publicly traded company. That being said, why is it then there's so much pushback when a resolution regarding pay packages is put forth? Chucky Conoway made sure he got his then bailed out while the getting was good. And as usual, the Kmart worker got the shaft. Even the feisty J. E Antonni was in utter denial when, in 1995, he was interviewed on a Detroit TV station saying in part...."Kmart is fine". Guess he didn't notice the drawdown of nearly 900 Million in financing just to put basic merchandise on the shelves. Amazing. Simply amazing.

The graveyard of business is littered with corporate corpses that are the result of D-U-M-B decisions. Roger B Smith, in 1984 blew up GM in one stroke doing away with GMAD and replacing it with CPC and BOP. For nearly 2 years, GM was dead in the water. Nothing got done. Meanwhile across town, Ford was bringing out some exciting, stylish cars and even Chrysler was making hay. In 1986 Ford out-earned GM for the first time on about 2/3 the sales volume. Yet Roger was more interested in his "lulu" gadfly plans to buy EDS from Perot and putting unproven technology into Hamtrammck assembly where the robots painted each other instead of cars.

I clearly recall once upon a time at Kmart we were to flip the oil and air filters with the automotive chemicals. Prior to the flip, you bought your motor oil turned around and selected your Motorvator or AC Delco filter. Makes sense right? Well according to one of Kmart's many SVP of merchandising, this was not so. In fact, they sent another VP clone to my store to oversee it being done. I was the poor dolt who got stuck over the course of 3 days flipping counters. In the middle of it, I suggested that this really wasn't such a hot idea as our customers are accustomed to buying an oil and or air filter when they bought their case of Valvoline. Now they have to walk all the way around the OTHER side to get their oil or air filter. I was told, in fairly direct verbiage, that I was to keep my opinion to myself and the corporate VP clone made doggone sure I saw his name along with the letters VP at the end of his name badge just to make sure HE not ME had all the answers. After all, he was a VP right? Therefore he MUST know what's going on or else it would not be so.

It was then I knew Kmart was headed for a fall and a mighty one at that. I put in face time for the next 4 1/2 years, finishing as a loss control mgr for my local store. I resigned effective 12/31/1994. That store is no longer open.

And in a twisted form of poetic justice, just 3 months AFTER all 2,000 Kmart stores moved the automotive chemicals to same aisle as motor oil, it was all moved back, just like before. I guess the corporate clone from Troy didn't have the answers after all!

 

[mrb627]

IMO

The killer for my Sears loyalty was their customer service department. It is one thing to have a Kenmore appliance fail, but having to argue with some idiot on the phone to get a service call scheduled only to have your efforts at diagnosis not get recorded to the service ticket terrible!

Malcolm

 

[DigAPony]

Sears Essentials". Kmart closed for about a month,

Ah, the saga of Bradlees-Kmart-Sears Essentials-Kmart in Parsippany N.J.

Kmart in goes back even further, to the 70's when they were up Rt. 46 in the former J.M. Fields.

Anyway, in the old location they had an automotive section that would rival a well stocked auto parts store, (quality stuff too), plus a nice little sporting goods/gun department.

Before Kmart moved to the new building they had a blowout clearance sale, then another one when when the changed back to Kmart again. Sears Essentials wasn't too bad, they had more inventory, lots of brand name items and decent sales compared to the present Kmart.

 

[firedome]

Tomturbomatic hit the nail directly on the head...

Scandianvian countries are constistently rated to have the most contented and least stressed citizens in the world for good reason.

The only time we ever go to Sears here anymore is for large variety to be found in the tool department. The rest of the invetory continues to shrink, the financial vampires are sucking it dry.

 

[twintubdexter]

There's smoke from burning money at Target too

After opening 100 stores and losing 1 billion dollars, Target's Canadian division is not proving to be a shining star either. The CEO has resigned and a new guy has been promoted. But don't feel bad for the outgoing executive, he got a 16 million dollar severance package. Target's security breach problem, regardless if corrected, will be on consumer's minds for a long time. Security breach incidents make for good headlines and are in the news everyday. Poor Target always gets honorable mention. Their sales and stock price continue to slide.

Retailers eventually all have their day in court. Many of them are similar to what Celeste Holm said about Broadway plays in "All About Eve"..."they flare up, burn hot, then they're gone"...or at least not what they once were.

 

[washman]

Seems the death rattles are getting louder

http://www.businessinsider.com/r-sears-posts-bigger-loss-as-sales-slide-2014-22

Net loss attributable to shareholders widened to $402 million, or $3.79 per share, from $279 million, or $2.63 per share, a year earlier.

Revenue declined 6.8 percent to $7.88 billion, but came higher than the average analyst estimate of $7.71 billion, according to Thomson Reuters I/B/E/S.

Read more: http://www.businessinsider.com/r-sears-posts-bigger-loss-as-sales-slide-2014-22#ixzz32SaXmpM9

Betcha Eddie thinks he's doing a bang up job too!

 

[DigAPony]

Betcha Eddie thinks he's doing a bang up job

On Tuesday afternoon I went to Sears at the Willow Brook mall to get a new lawn tractor blade. There was just a handful on cars in the parking lot on a sunny afternoon. This is a high volume mall and Sears has been there since it was built in the early 70's. These rest of the mall seemed to have the typical amount of shoppers.

Inside I find the skimpy lawn mower section is buried at the back of the store near the hair salon and the exercise stuff is front and center where the lawn and garden equipment would always be displayed this time year.
No big loss as their lawn tractors are mostly rebranded BOL junk these days and prices on replacement parts are sky high

What a shame.

 

[kenmoreguy89]

All I know is that I am done with Sears they can go to hell, they're simply ultra incompetent, and remember that I live in Italy so I am used to incompetence!
It's a really bitter feeling, seeing what once was an american proud company, that I used to love through history and talkings of people who could see Sears in their glorious days, to be reduced to be like that today....but they have what they deserves, result of how they ran things lately and of which I have been a victim of...is not the only thing going down the drain in America today.....Nor unfortunately seems will be the last.
[this post was last edited: 5/22/2014-15:59]

 

[laundromat]

We rarely shopped at Sears or KMart. We liked Montgomery Ward. The only Kenmore appliance we ever bought was their 1963 gas washer dryer combination. It was used 3 times a day and lasted almost 30 years with only one major overhaul repair. The balance system lock.

 

[washman]

Amazingly enough

IIRC, in 1972 or so Sears sales was equal to about 1% of the GDP that year. And it was during that time the Sears Tower was built. Such a fall from grace!

While we were Pennys shoppers, I do recall a large number of committed Sears shoppers back in the 70's. We did not have a Wards in my neighborhood.

 

[davey7]

Surprised at the surprise in Sear downfall

I'm surprised people are surprised that Sears is going down the tubes. They started coasting on their laurels in the 50's before which they were a leader and innovator in retail (out of central area stores, parking onsite, as well as merchandise policies, etc) but by the 50's they were pretty much doing what everyone else did.

Then there is also the Luxury Fever which gripped the nation in the 90's as well as the demanding bargain prices on everything else, there was no way they could keep up as a department store, which as a whole are flailing, partially because everything is the same and partially changes in retail with growth in discount stores and in luxury goods. I'd disagree about Target's older stores, some get quite worn looking and their selections are mainly only volume selling (understandable but means I go elsewhere for stuff).

I think some of their appliance and tool business was usurped by the big box home centers and never recovered from that. But even the Polk Brothers and such died off too - partly as the fad for luxury appliances hit, many wouldn't have been caught dead with their goods in Sears, though you could get Bosch there of late. But our appliances came from Sears to a greater extent (even got Belgian carpets at one of their South Side stores - 79th Street - in the 80's). Though my mom always got her detergent in huge drums from Field's, which is where our Sony TV came from since Sears didn't carry outside brands then.

 

[whirlcool]

note: Polk Bros

The reason for Polk Bros shutting down was not because of business failure. The company was family owned and run. None of the kids in the family wanted to take over the business. In short Polk Bros saw Best Buy, Circuit City, etc. coming their way so they shut down voluntarily. They literally had hundreds of millions in the bank when they did.

So Polk Bros saw the storm coming, shut down the stores and became the Polk Bros Foundation. The Polk Bros Foundation gives grants to inner city students who may not otherwise have the money for college. And they are still active today.

There is a book called "I bought it at Polk Bros" that goes into great detail about this. Plus it's a fun read.

http://www.polkbrosfdn.org/

 

[e2l-arry]

I bought my first Washer & Dryer at Polk Brothers

in 180, A Whirlpool compact, stackable unit. It was GREAT for an apartment or condo without hook ups.

I thought Polk Brothers closed after it burnt down in the 80's?

 

[whirlcool]

For those who have never heard of Polk Bros, they were a large appliance/furniture retailer in the Chicago area from the 1930's to the 80's. The company was owned and operated by the family who oversaw everything in each and every store. At one time they must have had 20 something locations all around Chicago & suburbs. The family consisted of six or seven brothers and a sister. A nice Jewish family.

Polk Bros started things in retail like getting exclusives from manufacturers, special volume discount pricing (which had never been done before) They carried only major brand goods. No knock offs here. And they offered easy credit too. In fact it was known amongst people who worked there that if your credit app was iffy the salesman could find one of the owners, and after talking with you approve your app if they felt you were a good risk.

By 1947 it was found that nearly 87% of the complete population of Chicago had bought "something" at Polk Bros at one time or another. Maybe a sewing machine, maybe a washer or even a television.

But the "owners" were stuck in their ways. In the early 70's IMB came in and sole them a mainframe so they could track their inventory, (20 stores worth and a huge warehouse full!) employee payroll and A/R & A/P. The computer was in a glass room in the middle of their main warehouse where customers could see it in "operation".
While visiting the place I never saw any computer tapes on the tape drives, never saw anyone in the room with the computer at all. And I didn't see any computer terminals anywhere either.

It turns out that the family had the "we've kept inventory by index cards in tubs for years and it has always worked out, so we'll continue to do inventory control that way." The only thing that ever got put on the computer was employee payroll.
Everything else was still being done manually. This was to be a grave mistake on the part of the family later.

All the inventory control records were kept in index cards in "tub tables" at the warehouse. If someone from a store needed to know if a particular item was in stock they'd call the warehouse, someone would pull the index card for that item and see how many were in the stores and which stores had the item.

Sometime in the late 70's the warehouse caught fire at night and burned down. And it really burned down to the foundation. Polk Bros had enough insurance to cover the damage, but the insurance company needed inventory records so they could assess the loss. But the inventory records were in the warehouse and got burned up.
So the insurance company sent their investigators out to rummage through the debris to see if they could figure out what that damage total was. The absolute best they could figure it was a $25 million dollar loss. But actually the total should have been closer to $40 million. If they had put the inventory on the computer there could have been offsite backup tapes to find out what was in the warehouse but they never put it on the computer. So they took the loss.

After the fire Circuit City and then Best Buy began making inroads into the Chicago area. Polk Bros sales started to slip. The family that ran the stores were in their 70's now and getting tired. Their kids were all grown, finished college and were lawyers, doctors & CPA's and had no interest in the company whatsoever.
So they had $400 million in the bank and decided to just shut the stores down and then form the Polk Bros Foundation to thank the good people of Chicago for their loyalty through the years. And within just a few years all the family members began dying off and soon only the Foundation existed.

 

[paulg]

Polk Bros story

One of our friends bought a new air-conditioner at Polk Bros on North Avenue.
That night, the building burned down.
Afterward our friends never got a bill for the air-conditioner!

 

[whirlcool]

You now know why they never received that bill!

 

[alr2903]

SHLD, closed Friday  at  $33.00  per share.   I think the plan is to sell the Canadian interests next.

 

[frigilux]

ALR2903-- I read yet another article about Sears's downward spiral and their "increasing irrelevancy." It would seem only a matter of time at this point.

The $64,000 Question: What will become of the Kenmore line of appliances when the inevitable happens?

 

[combo52]

What will become of the Kenmore Brand of Appliances

Lowe's or Home Depot will buy it and sell KM as their exclusive appliance brand.

Or the Sears appliance stores may be the only thing that survives.