Sears Holdings, which owns Sears and Kmart, announced on Thursday they would be closing an additional 64 Kmart stores and 39 Sears stores, all of which are expected to shut their doors between early March and April, as they grapple with weak in-store sales, according to CNBC.
Closeout sales at the locations are expected to begin next week and all stores will be shuttered by May, Sears Holdings said in a press release. Additionally, “eligible associates impacted by these store closures will receive severance and will have the opportunity to apply for open positions at area Kmart or Sears stores.”
Meanwhile, Macy’s announced on Wednesday 11 locations will be shuttered in 2018, coming as part of a downsize begun in 2016 to close 100 stores. Liquidation sales will also start at the affected stores next week. This will bring the number of closed stores to 81. The remaining 19 have not been announced. Macy’s expects an annual expense savings of $300 million from the store closures and staff reductions.
The fall of Sears has been swift
In 2006, Sears operated over 3,000 locations in the U.S. and several hundred in Canada. But Sears and other brick-and-mortar retailers had a hard time keeping up with the likes of Amazon and other e-commerce companies. This eventually forced Sears Canada to file for bankruptcy last year.
And now, the company is in the process of shuttering its business entirely. And by the end of October 2017, Sears Holdings had just over 1,000 stores left in the U.S.
The company said the closures are part of an ongoing effort to “right size” its store footprint. “The company will continue to right size our footprint in number and size,” Sears said in a statement. Moving forward, the company will continue to shut down unprofitable stores, it added.
Online retailers not all to blame
It’s easy to blame Amazon and other companies for the decline in in-store sales, but that would be unfair. While Amazon has been stealing market share and more brands are marketing themselves directly to consumers, there is little reason to go to the mall unless you just want to get out. Even food from a favorite restaurant can be delivered.
In May last year, CNBC reported that for years “Americans have been making bigger purchases or investments like their homes.” And more people are choosing to spend much more of their paychecks on their screens — on smartphone data plans, or streaming entertainment services like Netflix.
Then there has been a jump in the number of fast fashion retailers, like Zara, Uniqlo and Forever 21. They have been attacking the bottom lines of stores like Macy’s, JC Penney and L Brands, which owns Victoria’s Secret, Pink, and Bath & Bodyworks.
Old infrastructure holding back new in-store retail tech
In early December, Digital Journal’s James Walker wrote about a new study commissioned by retail software provider Zynstra. The study found that legacy infrastructure was just one of the roadblocks holding back digital transformation with brick-and-mortar retailers.
The survey found several specific challenges that impede the deployment of new digital applications, with budgetary restrictions accounting for nearly 50 percent of respondents saying the costs were higher than expected. Difficulty in finding skilled IT experts is the next biggest problem, with 35 percent of retailers struggling to find the talent needed to maintain in-store IT.
And we could add the expense involved in maintaining large brick-and-mortar facilities today, and many of them are a number of years old. This could lead to a future without large shopping malls, especially where a Sears, JC Penny’s or Macy’s is an anchor store.
