Things Become Extinct, But Wow ...

[SpeedTchr]

Amazon and others may have pushed Sears over the brink, but you can't wipe your ass with the internet. Game, set, match to the legendary catalog.

 

[dixiehack]

Sears seemed like a gyp to a small-town kid in the early 80s. You had the catalog full of glorious toys, electronics, interesting looking cartoon designs or sports logos on clothing, etc. But the tiny Sears store in Podunk only had room for a few washers and dryers, some hand tools, etc. Then when you made the trip to the big city mall, there were dozens of cooler-seeming shops to explore. Sears was what you walked through to get to the mall from the parking lot.

 

[The Big Ragu]

The department stores are just in a bad way. The world is changing. None of this is new with Sears. It has been dying a slow death right before our eyes for years now.

Sears put out its holiday sales numbers yesterday and they were dismal. Decline of 12 to 13 percent in November and December for Sears and Kmart stores open at least a year. In the last two weeks, they have announced that they are closing hundreds of stores -- huge sales, but losing money.

Sears is maybe the biggest dinosaur, but this is just a trend. Macy's and Kohl's each reported drops of more than 2 percent in their holiday sales the day before. Macy's announced they are going to close 68 stores this year.

Slice Intelligence, which scanned more than a million digital shopping receipts, put out something saying that Amazon accounted for 38 percent of online sales from November 1 to December 29. It's pretty much the same as the year before. Amazon is eating the lunch of the traditional retailers right now, and even the ones trying to play are finding it hard to keep up, because Amazon has years of investment in building up its infrastructure and squeezing out margins. All of this is great for consumers, really. Amazon loses money from its core retail business -- it has never turned a corner and is in this endless mode of trying to take more and more market share. Yet, they keep investing in infrastructure, building warehouses (at a massive clip), trimming delivery times and great prices. They have Prime, which they sell at a loss. And the products they are selling are at razor-thin margins. For the consumer, it means you are getting the lowest prices possible. Anyone competing with them has to offer the lowest price possible.

I am not sure where it all ends. They can't keep operating that way forever. And they have built out into other business -- for example, AWS, its cloud business is killing it and does make money. If things got really bad, they have some serious assets to sell off at a profit. But at a certain point, any business (the shareholders who own it) SHOULD want to make money from the business. You can only invest so much, before you want some fruit from the tree.

As long as they stay on this plan to take more and more market share, yeah, there is no place in the world for Sears and several others. The world has changed.

 

[lcjjdnh]

Seems to me Eddie Lampert shouldn't have been trying to run his business like Ayn Rand would run an economy. It sort of defeats the whole purpose of organizing as a firm--saving on transaction costs. Sort of pointless to force divisions to bargain with each other in the "free market"---just break the company up if you think that's a more efficient method of organization.

 

[Huggy]

There is a Sears in the mall up the street from me - which has a massive vacancy since Target bailed from the Great White North - and as someone mentioned that's the store you walk through from the parking lot to the mall. Up here, Eaton's was another department store giant that got steamrolled by Wal-Mart and all the other big-box competitors.

 

[Michael_ Gee]

There is a Sears in the Burlington Mall, one of the state's largest which is about a five minute drive from my house. I bought my leaf blower there a couple years ago, last time I was in it. It's otherwise a pretty upscale (and busy!) mall, but it remains for now. There aren't so many Wal-Marts in Eastern Mass. as in other places, probably because we're so crowded. To get the space for one that's not in the boonies, you'd have to buy an existing mall and totally replace it, an expensive proposition.

 

[Jake_Taylor]

For me, this is one of those moments when you start to relate to your parents. They were so bummed when Montgomery Ward stared going under, even though they hadn't shopped in one in about a decade. All about nostalgia and memories of youth, I guess. The other day I randomly thought to myself I missed TG&Y, then realized I had no idea why I would actually miss that store.

 

[User 11148]

For me, this is one of those moments when you start to relate to your parents. They were so bummed when Montgomery Ward stared going under, even though they hadn't shopped in one in about a decade. All about nostalgia and memories of youth, I guess. The other day I randomly thought to myself I missed TG&Y, then realized I had no idea why I would actually miss that store.

Wow, TG&Y, there's a brand I haven't thought of in awhile. For the longest time my grandmother -- an avid seamstress -- worked in the fabric department in the one that was in the less-small town just down the way. Her Saturday shift would end late in the afternoon, so lots of times my grandfather and I would meet her there and then go out to dinner. Many was the time my grandfather would treat me to a model car kit on such excursions.

 

[MisterCreosote]

So, I am about to purchase two whole-home warranties from Sears. By all accounts, it's a pretty great service, and the prices are pretty damn good.

Should I not bother?

 

[Jake_Taylor]

Wow, TG&Y, there's a brand I haven't heard of in awhile. For the longest time my grandmother -- an avid seamstress -- worked in the fabric department in the one that was in the less-small town just down the way. Her Saturday shift would end late in the afternoon, so lots of times my grandfather and I would meet her there and then go out to dinner. Many was the time my grandfather would treat me to a model car kit on such excursions.

I think I also just realized I'm muddling memories of TG&Y and Alco/Duckwall's. My great grandparents used to use the Alco pharmacy, so sometimes when I was little I'd go with my dad to take them to the doctor, then we'd hit Alco and the Arby's across the street for five for $5 roast beef. Now the local Arby's advertises 5 for $9.95 occasionally.

 

[User 11148]

So, I am about to purchase two whole-home warranties from Sears. By all accounts, it's a pretty great service, and the prices are pretty damn good.

Should I not bother?

Holy ****, home warranties are generally bad enough deals to begin with. Those sold by firms teetering on the edge of bankruptcy? Even worse.

 

[MisterCreosote]

Holy ****, home warranties are generally bad enough deals to begin with. Those sold by firms teetering on the edge of bankruptcy? Even worse.

They're for rental properties. I'd rather not set aside repair funds if I can avoid it. A few hundred bucks a year covers everything.

 

[Neutral Corner]

I have a lot of relatives in small town, rural, Georgia counties. Everyone wanted a Walmart near their town, then they'd get one and over the next couple of years 1/3 of the small businesses in town would go under. The local hardware store, Western Auto, Rexall Drugs, etc. would be blown away by having a big box discounter nearby. I never thought through the implications, that the same thing would happen to shopping malls and huge department stores chains with decades of history.

It would depress the hell out of me, because we'd drive down from Atlanta for Easter at Grandma's or something, and the drug store with a lunch counter where we used to get a milkshake would be boarded up, as would much of the courthouse square.

Progress? I suppose, but the ripple of societal cost are still spreading.

 

[TheSportsPredictor]

Was behind some Sears service van at a stoplight today. The back door had an advertisement on it for careers at Sears. So if anyone is looking for something ...

 

[User 11148]

They're for rental properties. I'd rather not set aside repair funds if I can avoid it. A few hundred bucks a year covers everything.

I can empathize with that risk aversion. Still, I think I might pass on becoming an unsecured creditor to a company that's got the bankruptcy court on speed-dial.

 

[MisterCreosote]

I can empathize with that risk aversion. Still, I think I might pass on becoming an unsecured creditor to a company that's got the bankruptcy court on speed-dial.

I'm certainly not married to Sears, but my neighbors all have it and swear by it.

As I understand it, retail is the albatross, and the home-services side of the house is actually one of the only things keeping it afloat.

 

[User 11148]

I'm certainly not married to Sears, but my neighbors all have it and swear by it.

As I understand it, retail is the albatross, and the home-services side of the house is actually one of the only things keeping it afloat.

You're still only safe to the degree that home-services is separate from the overall corporation. If it's not -- and I doubt it is -- when the ship goes down, it won't matter whether you were in the first-class cabins.

 

[JimmyHoward33]

So, I am about to purchase two whole-home warranties from Sears. By all accounts, it's a pretty great service, and the prices are pretty damn good.

Should I not bother?

There's a decent chance that if they shutter they'll either spin off the home services or they'll get absorbed by another provider. IIRC when Circuit City when under Sears bought up their extended warranties and serviced 'em until they all expired.

Depends how long the term is too.....with all their real estate and Lampert's cash it'll probably be 1-3 years before it's completely bye-bye.

 

[Roscablo]

There's a decent chance that if they shutter they'll either spin off the home services or they'll get absorbed by another provider. IIRC when Circuit City when under Sears bought up their extended warranties and serviced 'em until they all expired.

Depends how long the term is too.....with all their real estate and Lampert's cash it'll probably be 1-3 years before it's completely bye-bye.

That's what I was thinking. Someone somewhere would pick it up. But I suppose it's a good question to ask about. And on a side note, I don't think all home warranties are a waste. I got one as part of a home purchase one time -- didn't ask for it -- and it actually saved my butt big time on an air conditioner and plumbing issue right away. For rentals I can see it as a decent investment.

 

[Roscablo]

I also get several junk emails from Sears every week on home services. Not sure why since I never have really received any from them. Never anything on retail, even buying appliances. Just home services. Must be a big focus right now.