There’s good buzz and then there’s the kind Sears Holdings – parent of Sears and Kmart stores and a ton a valuable real estate – has been getting of late. Sears’ negative press in recent months has been more of a public flogging.
First, neither Sears nor Kmart stores faired very well in the recent holiday season, with comparable store sales well down in both cases year-over-year. Made JCPenney look profitable. Bah humbug!
Making matters worse, the investment community has been taking shots. Brian Sozzi of Belus Capital Advisors in particular has been vigilant in leveraging social media and Huffington Post to support his assertion that Sears and Kmart stores are in massive and hopeless disarray and that the light at the end of Sears’ tunnel is, in fact, corporate heaven.
Sozzi has reportedly toured a number of Sears and Kmart locations, taking snaps with his smartphone and posting his findings online for all to share. Broken displays, clothing tossed about the women’s department, busted lights in milk cases, chronically empty shelves in some case while others are overwrought with unsold family board games.
Ironically, those board games? Monopoly.
In short, it’s a rather ugly presentation, a demonstration of management and staff indifference – and he sees no redemption possible.
The indifference – and a lack of investment, claims Sozzi – has led the retailer to consistently bad results. Sales have fallen from $47 billion in 2008 to just under $40 billion in 2012. 2008 saw a comparable YoY store sales at -7%, trending to just -2.5% in 2012.
Last year saw Sears Holding close several stores in Canada in order to reap more than $300 million for the valuable real estate underneath. It also spun off its Lands End unit, and was said to be considering the same for its vaunted 800-store tire and auto service center business.
But who knows now.
“This is a company in absolute crisis,” Sozzi said. “Sears is not investing in their name brands so they can keep the customer coming back to the store for them. I view Sears in a slow death spiral.”
He’s not alone. In a note to investors last week, Credit Suisse analyst Gary Balter said, “As Sears passes off its good locations and its profitable segments, and loses marketshare to stronger retailers in its core franchises, the hope of this disaster turning around becomes remote.”
