Two Drowning Retailers to Sink Together

[GWB]

Sears, KMart to Merge in $11 Billion Deal

[Richard Tanner]

That's great now we'll be able to buy cheap stuff at "going out of business" sales from two stores. THe more the merrier.

Cody

[GWB]

Sorry, wrong forum, but then retail discussions always turn political anyway.

Hillary once was on the Board of Wal-Mart. That's a big mark against them.

[whiskeytown]

you tanked the economy...of course they're struggling.

RB

[andyfox]

K-Mart is doing well of late: turned a profit last quarter and the value of their stock has increased 7-fold since the bankruptcy. The merger will give them more ammunition with which to fight Wal-Mart, Target, and JC Penney. I think they'll swim.

I assume your administration won't oppose the merger?

[Rick Nebiolo]

[ QUOTE ]
K-Mart is doing well of late: turned a profit last quarter and the value of their stock has increased 7-fold since the bankruptcy. The merger will give them more ammunition with which to fight Wal-Mart, Target, and JC Penney. I think they'll swim.

I assume your administration won't oppose the merger?

[/ QUOTE ]

I assume the bankruptcy allowed/forced K-Mart to shed some of their run-down or poorly located stores. There was one a few miles from me that was a disgrace (on par with the recent elRoy post).

When it's been raining I've done some of my walking exercise at local malls. In general the Sears' stores appear to be really struggling. That said, I've bought some decent ties for $10 (maybe that is an indicator they are struggling).

Also notice they have the Land's End merchandise per that buy out. I've been a fan of Land's End in the past but this seems like an odd fit. Your thoughts?

~ Rick

[andyfox]

"I assume the bankruptcy allowed/forced K-Mart to shed some of their run-down or poorly located stores."

This is correct. Plus they sold some stores to Sears. Most big retailer Chapter 11 bankruptcies involve retailers who are looking to get out of bad leases.

Sears and JC Penney find themselves in a kind of no-man's land between the department stores above them and Target and Wal-Mart below. (Although JCP has been doing fairly well of late, due to CEO Alan Questrom's savvy.) The department stores get all the good name brands. Wal-Mart and Target offer lower prices. So what niche is there for Sears and Penney? They take whatever name they can get that has at least some cachet. For example, Penney tried to get Fossil to sell to them, but instead, Fossil countered with "Relic (by Fossil)." Ditto with Liz Claiborne who gave them "Crazy Horse (by Liz Claiborne)." A better strategy would be to simply buy the company, as Sears did with Lands End and as Target did with Mossimo.

The CEO of K-Mart, who will head up the new combined company, seems to have done well. Sears is a great American name, so I hope they pull it off.

I wouldn't be suprised to see JC Penney now become the target of a takeover by Target (pun intended) or possibly even Wal-Mart.

[Rick Nebiolo]

[ QUOTE ]
Sears and JC Penney find themselves in a kind of no-man's land between the department stores above them and Target and Wal-Mart below."

[/ QUOTE ]

Agree completely.

IMO Sears was always a wasteland in clothes (mostly classic nerdy engineer chic) but it was my first choice for tools and stuff in or near that department (e.g. a wet-dry vac). Now I imagine Home Depot and Lowe's cream it. Best Buy and others dominate electronics. What exactly does Sears do well at these days?

On my rainy day exercise mall walks I often cruise thru Sears and it is scary how empty it is. They just have to be losing money in their retail stores. That said, I did get a few good ties for ten bucks on sale. The Arrow label isn't bad at this price [img]/images/graemlins/smirk.gif[/img].

Hope they don't screw up Lands' End. I might need a decent button-down shirt someday [img]/images/graemlins/grin.gif[/img].

~ Rick

[andyfox]

I'm not as kinowledgable about Sears as I am about JC Penney, but I think their Craftsman and Kenmore names were carrying them for a while.

All department stores seem pretty empty midweek, especially on rainy days.

Lots of good articles on the merger in today's Wall Street Journal.

[Stu Pidasso]

[ QUOTE ]
On my rainy day exercise mall walks I often cruise thru Sears and it is scary how empty it is. They just have to be losing money in their retail stores.

[/ QUOTE ]

On some days the goal is not to turn a profit, but to cover the variable costs.

Stu