- Kmart‘s parent company, Sears Holdings, filed for Chapter 11 bankruptcy protection on Monday. The company says it will close 142 Sears and Kmart stores before the end of the year, and its CEO, Eddie Lampert, will step down.
- The rise of e-commerce, declining foot traffic to malls, and a higher demand for off-price products are just some of the factors that have caused department stores to suffer in recent years, and Kmart is no exception.
- We visited a Kmart store the day after the company filed for bankruptcy, and it was a mess.
The company says it will close 142 stores before the end of the year, and its CEO, Eddie Lampert, will step down.
Sears has been closing stores and selling off assets following years of crippling sales declines. The company operates 687 Sears and Kmart stores, according to its bankruptcy filing. That’s down from nearly 2,000 stores in 2013.
The rise of e-commerce, declining foot traffic to malls, and a higher demand for off-price products are just some of the factors that have caused department stores as a category to suffer in recent years.
«The problem in Sears’ case is that it is a poor retailer. Put bluntly, it has failed on every facet of retailing from assortment to service to merchandise to basic shop-keeping standards,» said Neil Saunders, the managing director of GlobalData Retail.
Inside Sears’ death spiral: How an iconic American brand has been driven to the edge of bankruptcy
Kmart stores seem to be facing the same issues. When we visited one of the discount stores the day after the company filed for bankruptcy, it had rusty shelves, huge empty spaces, and piles of boxes left around.
Here’s what it was like:
We went to the Kmart store in New York’s Penn Station.
At the front of the store was a small Halloween section …
… greeting cards and gift wrap …
… and luggage.
There was also a recycling machine near the front of the store, though it was tucked away in the corner and hidden by other merchandise.
There was also a huge cosmetics section carrying drugstore products …
… and behind that was a small electronics department. It felt pretty outdated — most of the electronics department’s offerings were DVDs.
The rest of the first floor was a bit of a mess. There was one whole aisle in which the shelves were caged off. It looked as if it was intended for online order pickup, but it was hard to tell.
The holiday department was alternating shelves between Halloween and Christmas.
There was a lot of empty spaces on the shelves.
In the middle of the store were a table and a few chairs in a setup labeled «Welcome Center,» but I couldn’t tell what it was actually for. It seemed really out of place.
Behind the Welcome Center were boxes of merchandise stacked halfway to the ceiling.
The back of the first floor wasn’t in very good shape. There were cleaning supplies and trash bags laying around …
… and a lot of the plants that were for sale had seen better days.
There were a lot of empty and rusting shelves in the grocery section …
… and parts of the floor were peeling up.
The second floor wasn’t much better. It held kids’ and men’s clothing, as well as home decor and kitchen appliances. All of the clothing was packed very tightly, so it was cluttered and hard to shop around.
There was a huge empty space in the middle of the floor, and the wall was only partially painted. It looked unfinished.
One of the escalators up to the third floor was closed off, and the other was not working.
The top floor was also very cluttered and difficult to navigate. It carried women’s shoes, clothes, and accessories.
It also carried some men’s clothing that didn’t fit on the floor below.
The line was really long for checkout and for customer service. A lot of the store was a mess.
Extracted from Business Insider