Nearly 10 months after the bankruptcy, Sears is limping in the holiday shopping season.
Eddie Lampert, the hedge fund billionaire who promised to save 425 Sears and Kmart stores and about 45,000 jobs when he bankrupted the company, saw its $ 5.2 billion lifeline wither.
Although there were plans for new small appliance-centric stores, only three were opened. The current is still shrinking. In February, the store count will be reduced to 182.
Many of the stores that remain have the same old problems. They are dirty and understaffed, low on stock and losing suppliers. By the end of the year – a pivotal moment for retailers – Sears' tattered Black Friday catalog indicates you'll have trouble getting shoppers to their doorstep. And online, it cannot compete with Amazon and its traditional rivals.
"They used to stand out, especially at this time of year," said Coye Nokes, a partner at OC&C Strategy Consultants. "Now they have disappeared into the landscape. They have become irrelevant."
The ever-shrinking Sears means more job losses. Thousands of jobs have gone, although the owner of Sears, through a spokesman, has declined to say how many since Lampert bought the company for bankruptcy in February. There are fewer options for buyers and suppliers. It also puts more pressure on malls, which need to figure out how to fill the holes left by Sears.
Lampert's failure does not surprise industry experts. He was the only buyer who offered Sears a lifeline – other competitors just wanted to liquidate the chain – but he had already chaired a long decline of Sears over a decade ago.
Signs at Sears are threatening to the holidays when retailers acquire new customers.
Black Friday was gloomy in his store in Jersey City, New Jersey, where a disconnected Christmas tree was sitting on a round table near the entrance. Few shoppers were in the store, and the toy section had no Legos or Hatchimals, even if signs indicated they would be there.
A store needs to have things on its shelves to attract customers, and Sears is having trouble with some suppliers. One vendor, Stolaas, stopped selling refurbished Apple devices on the Sears website because it was not being paid, said David Wander, Davidoff Hutcher & Citron bankruptcy attorney representing Stolaas.
The vendor problem is showing up in Sears advertising. His revised Black Friday circular had eight pages of deals, less than a quarter of its size last year, according to Edgar Dworsky, founder and editor of the Boston-based consumer protection website Consumer World. None of them were for the major electronics – one of the reasons people used to go to Sears.
Lands & End, a clothing brand that was once a big draw when Sears bought it in 2002 but was spun off in 2014, is nearing the end of its remaining leases due next month. Now, Lands & End's clothing is on sale and Sears was selling its mannequins at the Jersey City store for $ 75, with an additional 60% discount on Black Friday. The empty paint cans were marked for $ 2 each, with the discount.
Peter Doliente bought a Seiko watch from the store for $ 200, under $ 500.
"There aren't many customers around," said the Jersey City professor. “I was surprised when I went to the parking lot. Normally it would be packed at this time.
Sears has already stood out in the retail landscape, but has been in slow decline for years. Lampert combined Sears and Kmart in 2005, pledging to return Sears to greatness. This did not happened. Sears was hit hard during the recession a decade ago and never recovered.
Selling well-known brands, such as his Craftsman tools, and opening stores were money infusions that helped Sears survive. Lampert has loaned his own money, but critics say he never invested in the darker stores.
Even after all of Sears' pain, Lampert argued during bankruptcy that he was his best chance. Industry experts remain skeptical of his ability to revive Sears, saying he is still neglecting the stores.
"I don't think this came as a surprise to anyone," said Scott Stuart, CEO of Turnaround Management Association, whose members include business recovery specialists and store liquidators. "It was a surprise that (Lampert) publicly determined that this was something that could be recovered."
In a statement, Transform Holdco, owner of Lampert-managed Sears, said it "has faced a tough retail environment and other challenges" and is working to "prune its operations." The company said in November it received another $ 250 million in funding.
That's no consolation for employees like Victor Urquidez, assistant manager at Sears Auto Center in Chula Vista, Calif., Who said he will lose his job when the store closes in late December.
"We were waiting," said Urquidez, who watched deliveries drop from 100 tires at a time two years ago to nine today. "We knew this would happen."
What's next for Sears? There is little optimism. While there are still many suppliers shipping goods, the redemption plan has just begun and buyers simply have much better options elsewhere.
"It's a walking dead man," said Craig Johnson, president of Customer Growth Partners, a retail consultancy. "It's perfectly possible that next Christmas, Sears is not around here as it is currently structured."
AP retail writer Joseph Pisani in New Jersey contributed to this report.
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This story has been corrected to show that the watch buyer is Peter Doliente, not Dolente, and the CEO of the Turnaround Management Association is Scott Stuart, not Stewart, and the store count in February will be 182, not 128.