It’s been a rough few years for a company that once sat near the top of the American retail empire for the brick-and-mortar sector.
Before online shopping became a phenomenon and before big companies like Walmart, Costco, and Target were controlling the big-box shopping scene, Sears remained one of the most versatile and steady businesses in the country.
Sears Holding has fallen on hard times in recent years, however. Sales are down, debts are up, and it’s becoming harder for the struggling giant to compete at the level it once did. With financial troubles all around, management announced that they’d be closing down more stores to try and keep things going.
A company representative said: “Sears Holdings continues its strategic assessment of the productivity of our Kmart and Sears store base and will continue to right size our store footprint in number and size.”
They stated that this assessment led them to close some of their more unprofitable locations as to match current customer demand with the right supply of physical store locations and digital resources to help shoppers.
Sears’s sales have taken a tumble, falling 45 percent in the last five years. Big retail chains have been putting pressure on Sears, a company that saw some long-term plans fizzle out as their competition expanded into new areas and begin finding revenue from new sources.
This trend of closing stores is nothing new for Sears. The company closed down around 400 Sears and Kmart establishments in 2017, and the new set of closures will leave less than 1,000 total locations throughout the country. Just six years prior, Sears had over 3,500 establishments.
Christina Boni, vice president at Moody’s Investor Service, discussed the chain’s strategy of closing down locations in order to improve profitability. But despite the wise strategic move, nothing has changed as far as sales numbers go. “Despite its significant efforts to reduce its stores, it has not materially improved its weak operating performance to date.”
Kmart will be the hardest hit by the change. The chain will close down over half its 941 remaining stores in the country, and will have roughly 400 locations after the next round of closures concludes.
There have been many retailers that have fallen from grace in recent years, a combination of online commerce and the ‘new era’ of physical retailers have made it hard for older companies to stick around.
Modern retailers are doing what Sears always aimed at – offering customers a diverse array of products at a single location. The difference is their financial management and approach toward expansion is a little different. Couple this with how popular Amazon, eBay, and other online shopping platforms have become, and it is easy to see why Sears is struggling.
The company isn’t totally done yet, though. They still have an online component of their own. If they can use it properly, they can keep some type of steady market share as they plan out their next move.