The brand, so pioneering in its early days with its huge 500-page catalogues selling everything from groceries to cars, has long struggled to adapt to changing consumer wants and needs and is now reported by Reuters to be considering bids for some of its businesses and properties before it files for bankruptcy.
Analysts say the company simply didn’t reinvent itself or create a strong online offering in an age of Amazon and other e-commerce giants.
The brand has also been criticised by consumers and analysts alike for not paying enough attention to its in-store experience, suffering from a very limited line of stock, and generally poor customer service – a lethal cocktail, critics point out.
But, while Sears and its sister Kmart stores have been losing market share for years, they still generate some $14bn in annual sales. So, if the brand does, as expected, close its stores across 800 locations in the US, the likes of J.C. Penney, Best Buy and Lowe’s are likely to be the gainers.
One big slice of pie that rivals will be eyeing is appliances, a category in which Sears is still a big player – it had been expected to generate sales of $3.5 billion this year, UBS Securities told Bloomberg; home and sporting goods retailers are also likely to benefit.
At the same time, some shopping mall landlords are licking their lips at the prospect of having some big spaces to put on the market, the Wall Street Journal reported.
Leases on Sears stores were often signed many years ago, locking in rents that could be as low as $4 a square foot; new tenants in the more successful malls would nowadays expect to pay up to six times that amount.
On the other hand, mall landlords in more economically rundown areas, or those most affected by consumer migration online, are likely to struggle to fill the big void left by the closure of a Sears shop.
“The top 50 mall owners in the country were dying to get Sears out of the mall, so they're thrilled,” Corey Bialow, chief executive at Bialow Real Estate LLC, a firm that represents retail tenants, told the Journal.
Sourced from Wall Street Journal, Bloomberg, Reuters; additional content by WARC staff