Who could have predicted this tragic course of events? Oh yeah. Me.
When the credit ratings agencies say your toast, you’re toast. If they can’t finance their inventory purchases for the Christmas holidays, they’re finished. Even if they survive through the holidays, the bankruptcy liquidation announcement will be no later than February. Good riddance. Sears/Kmart has been the worst run retailer in America for two decades.
That’s gonna be a lot of vacant anchor positions in ghost malls across America. How long can the real estate developers extend and pretend with the help of the Fed and the Wall Street banks? The loan losses are going to be epic. I’m just gonna get me some popcorn and watch the show.
Moody’s: Sears’ and Kmart’s shutdown is imminent
Moody’s analysts say Sears and Kmart don’t have enough money — or access to money — to stay in business.
In a note published Wednesday, the analysts downgraded Sears’ liquidity rating, saying the company is bleeding cash and will have to continue to rely on outside funding or the sale of assets, such as real estate, to sustain operations.
“We recognize the risks associated with relying on these sources and continued shareholder support to finance its negative operating cash flow which is estimated by Moody’s to be approximately $1.5 billion this year,” the analysts wrote.
Kmart in particular is at risk of shutting down, according to Moody’s.
“The ratings… reflect our view on the uncertainty of the viability of the Kmart franchise in particular given its meaningful market share erosion,” the analysts wrote.
Sears said in August that its cash and equivalents have fallen to $276 million from $1.8 billion one year ago.
As a result, the retailer was forced to accept $300 million in financing from Sears CEO Eddie Lampert’s hedge fund, ESL Investments, in the most recent quarter.
The company is losing cash as sales plunge at its namesake and Kmart stores.
Net sales fell 8.8% to $5.7 billion in the second quarter. Same-store sales plunged 7% at Sears stores and dropped 3.3% at Kmart stores.
Sales have been falling for years.
Sears’ sales dropped from $41 billion in 2000 to $15 billion in 2015.
Kmart, which merged with Sears in 2005, has seen its sales plunge from $37 billion to $10 billion in the same period.
Moody’s analysts noted that Sears has a sizable asset base, but “its debts are significant with approximately $3.5 billion of funded debt as well as an unfunded pension and post-retirement obligation of $2.1 billion.”
The company’s minimum pension contributions are an immediate threat to its cash flow. In 2016 and 2017, minimum pension contributions total approximately $596 million, analysts said.
It’s Kame-A-Part not KMart.
It’s obvious Sears is going the way of Wards. Sears is a ‘dowdy’ store – it’s like entering a time-warp back to 1970 – Professor Peabody and the Way Back Machine. I walked through a Sears, at an upscale Mall in Minnetonka. There was nobody in the store
There are so many competitive stores that are more ‘hip’, have better merchandise, and category killers – such as: Target / Costco / Sam’s Club / Home Depot / Best Buy. Then there are online stores such as Amazon / Lands End / LL Bean. Stick a fork in Sears – it’s done.
JC Penny can’t be far behind.
chuckle chuckle Kame-A-Part!
Dutch….Fuck Target. They don’t support Veteran Charities and recently the ‘Transgender’ bathroom idiocy.
The queers that run Target would like to fuck you.
I don’t shop there – just making an observation.
They =Target- also ban the Salvation Army bell ringers at Christmas, or any Christian observation at that time, while counting on the profits of the Christmas season to to put them in the black and carry them through till the next Christmas.
Quit shopping there years ago when they started this policy.
Weird. Admin is a great man. Thinks like me. I drove past our local Sears Outlet the other day. You could land a 747 in the parking lot. 5 cars. The local malls are looking rather spooky as well. I walked into a Nordstrom the other day and was tackled by five salespeople desperate to sell me a shirt already reduced by 50 percent. Creepy.
Costco lots here (greater Minneapolis) are always near full.
Costco is for people who think paying $5.99 a pound for some pork chops that they can buy anywhere for $3.99 is so great that they should pay a $50 annual fee for the privilege. It’s for people who don’t have any idea what things should cost. It’s a cult – like USAA Credit Union.
Iska, I don’t know where you got the idea that Costco is more expensive than a supermarket. All this summer we have been getting lamb chops for $6.99 a pound. A market near my home wants $18.99 a pound. Same for produce.
We buy all our gas at Costco. It’s been at least 10 cents less a gallon than the stations around us. Plus you get 4% discount. This alone saves us over $100 a year.
They should turn all of these empty malls into giant car lots. Some of them are so big that every new car dealership including their massive inventories could easily fit in a single mall property.
I stopped shopping at SEARS at least 15 years ago. I no longer return any broken Craftsman tools either. I simply stop by the local pawn shop and replace them with Snap-On or MAC tools for pennies on the dollar. Good Riddance!
Crapsman = Craftsman
I have somewhere near 700 Craftsman tools and in 37 years I’ve only broken about a dozen and that was usually due to using them in a manner they were not designed for. I went to replace a 3/8 ratchet that I had worn out internally and they handed me a kit that included a plastic part or two. I said fuck that, gimme the good stuff and they said that was it. I looked at their new ratchets and they had a plastic lever for reversing the drive too. I just tossed the old one in the trash on the way out and never went back. Replaced it with a much nicer Snap-On at the pawn shop on the way home.
you sound like a dick
“your toast, your toast” or “you’re toast, you’re toast”…or ur toast or ur toast.. 😉
your toast = it is the toast that belongs to you.
you’re toast = “you are” the same thing as toast.
..no worries though, I used to make the same mistake with its and it’s..
Here is a way to visualize the difference, assuming you are one of the 1%:
scenario one:
in the morning your butler comes in and very dispassionately intones, with a voice like Steven Fry portaying Jeeves:
‘Your toast, sir”
meaning: the first course of your breakfast in bed has just been brought to you
scenario two:
in the morning your butler comes in and very dispassionately intones, with a voice like Steven Fry portaying Jeeves:
‘You’re toast, sir”
meaning: the peasants are downstairs with pitchforks and torches. Social justice is about to be brought to you
Now then, see what a difference an apostrophe and a silent letter e can make? Thanks monkey for the tutelage!
As for the 3d person confusion, long ago i penned a little mnemonic poem i recite each time i see someone online confuse the two:
It’s ‘its’ dumb shits!
“Let’s eat, Grandpa.”
“Let’s eat Grandpa.”
Punctuation-it can save a life.
There was a time when Craftsman tools were the best on the consumer market, but today even Harbor Freights better qualities easily compete with them and are of comparable quality (their better stuff, not the cheapest ones which are still reasonably good tools for the most part if they are only intended for occasional home use).
Last Craftsman tools I bought were made in China, not the American made tools of the past.
MOST tools are made in China even your Harbor Freight ! & check Kabolt & Snap on too GENIUS !
Selfishly speaking, the Sears I frequent in 21030 zip code, is as much Lands’ End as Sears, and IF it goes kaput, I’ll miss the ability to return LE items free of charge.
I still fondly remember the Sears catalog of my youth, especially the year when Cheryl Tiegs modeled bathing suits; the sight of her still makes my motor run; Grrrrrrowl. Oh yeah, I’m still a deplorable.
I am not a big boycott guy but Target will not be getting any of my money. Neither will the NFL. I refuse to give money to my enemy.
They just closed the Sears in my hometown. I went to see if there were any deals last day. There was a sign that said.
Everythjng for sale including fixtures. I they meant the kutchen sink too.
Anyways went in to see what was left and there were two bins of shoes and shit. Stuff even a 20 dollar whore wouldn’t wear.
Fitting end for that retail giant. The stuff that was worth selling was likely just moved to the next store they are closing.
Nice to go looking for shit to buy you really dont need and run your mouth as people lose their jobs !
Question: does the bankruptcy and freeze of the Hanjin shipping line have any effect on US retail? I have to imagine that a lot of paid-for goods are sitting in stranded containers, either on ships or on Asian docks, and won’t be in US stores to get purchased.
I read that J.C. Penny is benefiting from the closing of Sears and Macy’s stores across the US. People got to shop somewhere so if you go to a mall and Sears and Macy’s are closed Penny’s maybe the only department store left.
Sad, especially if you are long time employee about to retire. Hard to believe that mighty Sears Roebuck could sink to such a pitiful state. It should have parlayed its catalogue success and become Amazon.
Me thinks the big box retail model is going to run into more and more trouble as time goes on. Too many of them operate almost completely on credit. If there is a credit crisis look out below….
And the winner is………. WALMART! Who could have thunk it? With an illegal crackback block from Amazon. Trump’s DOJ is going to have some fun with those assholes. Jim I don’t think you’ve been wrong about anything in retail in the four or five years I’ve been on this blog. If you say they’re going to close, I damn sure believe they’re going to close
I know I will sound like my grandpa talking about the days of handlebar mustaches and penny arcades…
I don’t look forward to sears’ demise. I have a lot of happy memories of the place back in the 60s and 70s. As a kid wandering through the toy department before Christmas, it was almost as cool as a visit to the north pole. Pushing a shopping cart down the cluttered aisles of wallace mart’s C.C.C. will never be comparable for my grandkids. Of course then again, already my kids don’t understand “playing” with anything that lacks an LCD display and a CPU so I guess the toys I swooned at are as archaic as a steel hoop and a stick now.
Not long after I was married MonkeyWard rang up one last sale in that big cash register in the sky. I was very sad then too for comparable reasons. I thought of my then-late grandparents shopping there and already marveled at how quickly America was being utterly transformed economically from a world they would have recognized. Man if they could only see 2016 they would think they were in an unwakeable nightmare. Maybe we all are…
I do like being able to order *anything* from Amazon but it’s not the same as dressing like a grown up with self-respect and appearing in a public space to shop. That was a pretty significant civilizational archetype we’ve swept away like yesterday’s house dust.
Of course since I can count my visits to sears per decade on one hand pretty much, I am as much culpable as everybody else in its demise.
The point above about catalog sales is spot on: ironic that mr. sears built his empire really on direct marketing via catalog back in the day — isn’t that precisely what amazon is? Either somebody at sears was really asleep at the switch, or TPTB decided a long time ago Bezos was the annointed “winner” in that sphere and to relegate sears to the pump and dump / asset-strip vampires…
As for KMart… I must have lived a pretty sheltered, Lord Fauntleroy life as a child. I was about 15 the first time I ever ate McDonalds. I was about 12 or so the first time I set foot into a KMart. On that occasion, I was spending the weekend with a friend and his dad took us there. I still recall my impression of the place, hmm, so this is where the other half shop… I would come to understand that the word ‘mart’ telegraphed something about socio-economic status of its clientele. Again, ironic most of America now frequents a different “mart” — somebody missed the boat there too in Schaumburg or wherever they are headquartered. (Also a tell that most of us shop at the other mart in 2016 — 99% of us have been sorted into the bargain bin of consumers.) I remember also feeling embarrassed for sears when it acquired KM. Sort of like old money fell on hard times and married the town prostitute who had won the lottery trying to recover their family name via quick cash infusion. I don’t think the real world works that way for people or for corporations…
Don’t understand this? I thought the economy was booming?
Retail Sales Growth Tumbles To 6 Month Lows, Stuck In Recession Territory
by Tyler Durden
Sep 15, 2016 8:40 AM
Having warned that retail sales could be weak (based on BofA’s credit card data), year-over-year growth in retail sales rose just 1.9% (its weakest since March’s plunge) and worryingly in historical recession territory. MoM data was disappointing across the entire spectrum with actual contractions versus expectations of gains (Core -0.1% vs +0.3% exp, and Control -0.1% vs +0.4% exp). While clothing and food services saw spending increase, a drop in gasoline spending along with a tumble in ‘retailers’ down 2.4% MoM and sporting goods weighed the overall index down.
Retail sales less autos fell 0.1% in Aug., est. 0.2% – MISS
Retail sales fell to $456.321b in Aug. vs $457.669b in July – MISS
Retail sales ex-auto dealers, building materials and gasoline stations unchanged in Aug. – MISS
Retail sales ‘control group’ fell 0.1% m/m in Aug., est +0.4% – MISS
The July bounce is over…
This is not what Janet wanted… (or maybe it is).
The real economy has been shrinking since about the year 2000. The decline was just masked by the housing bubble and then currently by the stock market/bond bubble.
Do you know how Michael Jackson really died?
He was listening to the radio, and a KMart ad came on and said: “Little boys pants, half off”. He died of a heart attack!
In the old days ….
Took a trip and bought my first 1/2″ drive electric (corded, of course) drill from Sears around 1981. Wore that thing out, finally, think the motor shorted. And in the old days, you could actually order PARTS and REPAIR tools bought at Sears; and frequently, they were actually WORTH REPAIRING. Dryers and washers (usually rebranded Whirlpool or similar, made under the Kenmore name) were good quality and lasted decades. Craftsman tools also solid steel, good until overstressed by a factor of three or more, return and replace. Decent quality clothes, wore them through junior high and high school (but I was a common size, they fit out of the catalog). Shoes that would last a school year, jackets and coats, you name it: good stuff.
Not so much lately, they had to cut corners and skip costs like everyone else. I won’t miss them badly, but hate to see incompetence drag another iconic brand down to dust. Who will sell my next set of tires? Probably Big O (a local chain).
My local KMart is closing in December, which is not surprising at all. Many times I went there it was usually dirty and empty, at least in the last couple of years. It only lasted as long as it did due to the almost lack of competition until recently (KMarts in nearby similarly-sized towns mostly closed during their first bankruptcy). Meijer opening a location on the other side of town last year likely did them in. Many people in my hometown also think the KMart chain could easily go under in the near future.
It is shame to see what has happened to Sears. I worked for Sears while going to college, it was a wonderful place to work, I started out part-time but was eventually made full-time, the pay was good and the benefits were beyond belief, I needed a hospital stay I had no out of pocket expense. Sears was doomed when it was acquired by K-Mart. K-Mart was a relic from the 1960’s, the stores were old, dirty, and poorly staffed. When K-Mart ran a sale, they would hide the sale merchandise, and to find anyone to assist you, good luck, usually there was only one checkout line open staffed by someone who did not speak very good English. I stopped shopping at K-Mart 20 years ago, I don’t care if they were giving away diamond rings I would not go!
Sears on the other hand, was always well respected for a very fair return policy, which has now been replaced by one of the worst in the industry. The current CEO does not have a clue how to run a once crown jewel. He tried unsuccessfully to merge a discount mass merchant with a Department Store, he did not listen to industry trends and just bullied employees into accepting his ways.
I was at a Sears store today, in a local mall, the store was downsized to a former shadow of itself, the remodel screams cheaply and quickly done. When I went upstairs to the appliance, tools, housewares area, the store was heavily staffed, but, there were no customers. Congratulations Eddie, you have done a fine job of running a once mega store, highly respected name into the ground