Sears or JCP who will die first?

[Garin]

What Recovery? Sears And J.C. Penney Are DYING
By Michael Snyder, on January 16th, 2014


Two of the largest retailers in America are steamrolling toward bankruptcy. Sears and J.C. Penney are both losing hundreds of millions of dollars each quarter, and both of them appear to be caught in the grip of a death spiral from which it will be impossible to escape. Once upon a time, Sears was actually the largest retailer in the United States, and even today Sears and J.C. Penney are "anchor stores" in malls all over the country. When I was growing up, my mother would take me to the mall when it was time to go clothes shopping, and there were usually just two options: Sears or J.C. Penney. When I got older, I actually worked for Sears for a little while. At the time, nobody would have ever imagined that Sears or J.C. Penney could go out of business someday. But that is precisely what is happening. They are both shutting down unprofitable stores and laying off employees in a desperate attempt to avoid bankruptcy, but everyone knows that they are just delaying the inevitable. These two great retail giants are dying, and they certainly won't be the last to fall. This is just the beginning.

The Death Of Sears

Sales have declined at Sears for 27 quarters in a row, and the legendary retailer has been closing hundreds of stores and selling off property in a frantic attempt to turn things around.

Unfortunately for Sears, it is not working. In fact, Sears has announced that it expects to lose "between $250 million to $360 million" for the quarter that will end on February 1st.

Things have gotten so bad that Sears is even making commercials that openly acknowledge how badly it is struggling. For example, consider the following bit of dialogue from a recent Sears television commercial featuring two young women...

"Wait, the movie theater is on the other side," the passenger says.

"But Sears always has parking!" the driver responds.

Sears always has parking???

Of course the unspoken admission is that Sears always has parking because nobody shops there anymore.

I have posted video of the commercial below...



A couple of months ago I walked into a Sears store in the middle of the week and it was like a ghost town. A few associates were milling around here and there having private discussions among themselves, but other than that it was eerily quiet.

You can find 18 incredibly depressing photographs which do a great job of illustrating why Sears is steadily dying right here. This was once one of America's greatest companies, but soon it will be dead.

The Death Of J.C. Penney

J.C. Penny has been a dead man walking for a long time. In some ways, it is in even worse shape than Sears.

If you can believe it, J.C. Penney actually lost 586 million dollars during the second quarter of 2013 alone.

How in the world do you lose 586 million dollars in three months?

Are they paying employees to flush giant piles of cash down the toilets?

This week J.C. Penney announced that it is eliminating 2,000 jobs and closing 33 stores. The following is a list of the store closings that was released to the public...

The CEO of J.C. Penney says that these closures were necessary for the future of the company...

"As we continue to progress toward long-term profitable growth, it is necessary to reexamine the financial performance of our store portfolio and adjust our national footprint accordingly," CEO Myron Ullman said in a news release.

Actually, his statement would be a lot more accurate if he replaced "continue to progress toward long-term profitable growth" with " prepare for bankruptcy".

It would be hard to overstate how much of a disaster 2013 was for J.C. Penney. The following is an excerpt from a recent CNN article...

It's been a brutal year for J.C. Penney, its stock falling over 60% in the past 12 months. The company has been losing hundreds of millions of dollars per quarter, and is in the midst of another turnaround effort after ousting former Apple executive Ron Johnson last year.

Overall, shares of J.C. Penney have fallen by an astounding 84 percent since February 2012. And keep in mind that this decline has happened during one of the greatest stock market rallies of all-time.

For now, J.C. Penney will continue to try to desperately raise more cash from investors that are foolish enough to give it to them, but all that is really accomplishing is just delaying the inevitable.

If you would like to see some photos that graphically illustrate why J.C. Penney is falling apart, you can find some right here.

And of course Sears and J.C. Penney are not the only large retailers that have fallen on hard times. This week the CEO of Best Buy admitted that sales declined at his chain during the holiday season...

Best Buy shares skid on Thursday after the retailer said total revenue and sales at its established U.S stores fell in the all-important holiday season due to intense discounting by rivals, supply constraints for key products and weak traffic in December.

In the immediate aftermath of that announcement, Best Buy stock was down more than 30 percent in pre-market trading.

And Macy's just announced that it is laying off 2,500 employees in an attempt to move in a more profitable direction.

So why is all of this happening?

Aren't we supposed to be in the midst of an "economic recovery"?

That is what the Obama administration and the mainstream media keep telling us, but it is simply not true.

In fact, a new Gallup survey has found that the number of Americans that are "financially worse off" than a year ago is significantly higher than the number of Americans that say that they are "financially better off" than a year ago...

More Americans, 42%, say they are financially worse off now than they were a year ago, reversing the lower levels found over the past two years. Just more than a third of Americans say their financial situation has improved from a year ago.

That is why these stores are dying.

Things continue to get even worse for the middle class.

But a lot of people out there will continue to deny what is happening right in front of their eyes. They are kind of like that woman over in California who was conned out of half a million dollars by a Nigerian online dating scam. They will never admit the truth until it is far too late to do anything about it.

[Easy180]

I would say Sears will die first since I see actual living human beings walking into Penney's

[kevinpate]

ThomPaine, fwiw, that experience, quite sadly, is not one unique to dealing with Sears. What passes for customer service these days in way too many businesses is quite appaling, particularly to those old enough to remember when there was not a pandemic of chronic GAD deficiency in retail and food service.

It would be a far better world if there were far more give a damn enzymes than whatever dude enzymes in most bodies.

[Snowman]

ThomPaine, fwiw, that experience, quite sadly, is not one unique to dealing with Sears. What passes for customer service these days in way too many businesses is quite appaling, particularly to those old enough to remember when there was not a pandemic of chronic GAD deficiency in retail and food service.

It would be a far better world if there were far more give a damn enzymes than whatever dude enzymes in most bodies.

While I don't doubt that there are sometimes issues with the design of inventory tracking systems. Most of the time I have noticed a store can not track items, it goes back to how well the individual store is managed. The items in store may have just been thrown a random spot to leave early than finding the proper place, this also goes along with how often they inventory a store.

[SoonerDave]

ThomPaine, fwiw, that experience, quite sadly, is not one unique to dealing with Sears. What passes for customer service these days in way too many businesses is quite appaling, particularly to those old enough to remember when there was not a pandemic of chronic GAD deficiency in retail and food service.

It would be a far better world if there were far more give a damn enzymes than whatever dude enzymes in most bodies.

You beat me to it, Kevin. While this is certainly nothing less than a suitable indictment of Sears, it rings all too true of many if not most other retailers these days. I loathe, loathe, loathe trying to deal with anyone on the phone these days. It borders on an exercise in futility.

[kevinpate]

I will say this. Because the Budget Kiosk in Norman is in the Sear's store, I've been in it several times over the last few years. the store appears to be well stocked in most all departments, with active shoppers throughout. Whatever problems Sears may have elsewhere, it seems to have a loyal following out at Sooner Mall in Norman.

[MWCGuy]

I will say this. Because the Budget Kiosk in Norman is in the Sear's store, I've been in it several times over the last few years. the store appears to be well stocked in most all departments, with active shoppers throughout. Whatever problems Sears may have elsewhere, it seems to have a loyal following out at Sooner Mall in Norman.

I did my Christmas Shopping at the Norman store last year. It is one of the best maintained stores I have seen in awhile. Midwest City and South Western appear to be holding their own as well. The traffic at both stores has picked up since they closed the store at Quail Springs. Every now and then they will see a packed parking lot. Nothing compared to the old school days but, busier then what the used to be. I think they could do really well if they went down to two full sized stores for the metro the rest of the city could be served by Sears Hometown Stores. A perfect place for one would be right off I-40 between Air Depot and Downtown.

[bluedogok]

My wife shops at Penney's again after the Apple person was fired, while he was there she started going to Kohl's more.

[Snowman]

Which goes first is hard to say but I from articles I have read Penney's seems more sure to die, Sears though did so much damage to their brand it will be impressive if they can ever make a comeback.

[blangtang]

About a year ago I stopped in the JCP at Penn Square, and most of the floor space was just open areas with carpeting. I think people stop in their to use the toilet since there's not much of a line.

How about Radio Shack? I wonder who buys from them these days.

[Bunty]

About a year ago I stopped in the JCP at Penn Square, and most of the floor space was just open areas with carpeting. I think people stop in their to use the toilet since there's not much of a line.

How about Radio Shack? I wonder who buys from them these days.

I do. A clerk at Wal-Mart a couple of days ago told me to go to Radio Shack to find a wafer battery I needed. Wal-Mart didn't have it.

[SoonerDave]

I do. A clerk at Wal-Mart a couple of days ago told me to go to Radio Shack to find a wafer battery I needed. Wal-Mart didn't have it.

I'll be amazed if there's anything left of what we know as Radio Shack in five years. And in all honesty, I think five years is being generous. I just don't see how their business model can sustain the stripmall storefronts they occupy, and the hobbyist electronics niche they filled for so many years is either filled now by Internet retailers or is just shrinking in general. I seriously doubt that RC cars and cell phones are going to turn them around.

[Pete]

Almost all the old department stores are already dead; Dillard's and Macy's are about the only ones still standing and they have bought out a bunch of other failing chains themselves. Some of the higher end versions are doing okay, like Nordstrom, but of course many in that niche are long gone as well.

Like large malls, it's merely a concept which time has mostly past. In their place are scores of big-box discount stores and on-line options.

In the case of Sears, the only thing that has kept them going this long was the sell off of other big assets, like Allstate Insurance, Dean Witter and Coldwell Banker Real Estate. They even sold Sears Tower! People probably don't even remember when Sears had a big financial empire that stretched well beyond it's retail arm.


If and when Sears and Penney's die, I doubt too many people will miss them.

[Jim Kyle]

Is Federated still using the Dillard's brand name out west? Here in OKC the name changed first to Foley's, then to Macy's. All, of course, are simply parts of the Federated empire so far as I can determine...

And is the May company still the biggest department store group in the L.A. area?

[Pete]

Is Federated still using the Dillard's brand name out west? Here in OKC the name changed first to Foley's, then to Macy's. All, of course, are simply parts of the Federated empire so far as I can determine...

And is the May company still the biggest department store group in the L.A. area?

Federated is now Macy's Inc., which operates Macy's and Bloomingdales.

May Co. merged with Macy's some time ago.


We don't have Dillard's in California, just Macy's, Bloomies, Nordstrom and a few Nieman's and Saks. And of course, the remain Sears and Penney locations.

More and more, Target is going into malls out here.

[ThomPaine]

Anecdotal and very frustrating (and long) story...


Need a microwave, and would like to replace my Kenmore with another Kenmore (trying to find the same but newer model since it's a built-in).


Go online and see that my nearest Edmond Sears has"3 in stock."


Awesome. This whole endeavor can be fixed in under an hour!


Go to the store. I tell the man what I need to pick up. He checks his computer then disappears to the back for a few minutes, but returns empty handed. None in stock. Evidently, their online inventory is "not always accurate." I ask if he can check the two other metro stores to see if they have them in stock.


"No, we cant, we're independently owned and have no access to the other stores' inventories."


He can order one for me and have it in a couple days, but I have to use a Sears credit card for special orders. No thanks (I haven't had a Sears credit card in 20 years).


Back home online. Sears on the south side and MWC both show the microwaves in stock (two and three respectively). No fool, I'm calling ahead to see if they have one before I trudge across town. I choose the south side location because going to Heritage Park Mall just makes me sad. Call the Sears and get a typical menu based system, choose "appliances" and then "microwaves and other smaller appliances" and the phone begins to ring, and ring, and ring...


"Menswear, can I help you?"


"Um, yeah, I'd like to speak to someone about a microwave."


"Hold on a sec..."


Ring, ring, ring, ring...


Different voice "Menswear, may I help you?"


"Um, yeah, I'd like to speak to someone about a microwave, but evidently there's nobody over there picking up the phone."


"Sorry, hold on, I'll get somebody for you."


On hold. After five minutes, I hang up.


Back online to get the MWC store number. Same menu, same choices, ring ring ring...


"Sears, can I help you?"


"Yes, I need to see if you have a microwave in stock. I have the model number and your online..."


"Hold on, I'll send you to appliances."


Hold, hold, hold, hold, hold. Hang up, dial back and ask for "manager" at the prompt. Ring, ring, ring...


"Sears, may I help you?"


"Yes, I was just on hold for about ten minutes with no answer. I just need to see if you have a microwave in stock. I have the model number and your online system says you have three of them."


"Sorry about that, what's the model number, and I'll check for you."


"Great, thanks. The model number is..."


"Please hold, I'll check to make sure we have it."


At this point, I'm invested, and morbid curiosity keeps me on hold for 10 minutes before somebody picks up the phone.


"Hello? Can I help you?"


Exasperation, explain, explain, explain...


"Sorry, let me check."


"Thanks."


Less than a minute later...


"Yes, we have them in stock."


"Great. I'll be right over."


Jump in the truck and head to what used to be a decent little mall where I spent hundreds of dollars in quarters at the Aladdin's Castle arcade, but is now a sad ghost town. Park right up front and charge into the store and head to appliances. I find a young man hiding in the aisles and look at him until he speaks.


"Can I help you?"


"Yes! I'm here to pick up a microwave."


"Did you pre order it?"


"No, but I called ahead, and you said you had it in stock. Here's the model number."


I hand him a printout showing all the data, his store, and '3 in stock' highlighted. He turns to his computer and enters an impossibly long string of commands.


"Yeah, we're supposed to have them in stock, but these computers aren't always accurate. Lemme call the back."


Ring, ring, ring... "I need you to see if we have a microwave. The model is ... Thanks."


Hangs up the phone.


"He's going to check and call me back."


Wait, wait, wait. Watch another couple stand two feet from my salesman with a hopeful look on their faces. No love, he's helping me, and evidently cannot address them without breaking his concentration on the un ringing phone. Eventually the couple breaks in and asks for assistance.


"Yeah, like I said, we don't have that model in stock (referring to an item in that day's sale paper), but I can order one for you..."


Ring, ring, ring...


"Yeah? Okay, thanks."


Hang up.


"Yes, we have one in stock. Would you like it?"


"Um, yes."


Transaction completed after turning down, three, two, and one year service contracts.


"Do you know where customer pick up is?"


"Yes, I'm parked there."


Skip over to customer pick up and after finding somebody to help me, I pick up my microwave.


Personally, I don't see how Sears has stayed in business this long.

[SoonerDave]

I have thought for years that I could drive by the old, nasty Sears on SW 44th and Western on any given day, and there was no worse than a coin flip's chance the thing would, out of the blue, be shuttered and gone from the earth. It hasn't happened yet, but I still would never bet against it. That's a nasty, nasty store that holds for me only hollow, fleeting memories of the vibrant retail atmosphere that, believe it or not, once reigned there. Sears was almost as big and routine a part of my family's shopping efforts as TG&Y. A week without a trip to the Sears catalog desk to pick up an order was an exception. Sears used have a candy counter with hot, roasted peanuts and popcorn, the aroma of which would flow through the store. On the south end was a big coffee shop, and to the west were the hardware and sporting goods where they always had the current incarnation of Pong on display and for sale - and I never lost a game . They sold furniture, console TV's, VCR's, you name it, and Sears had it.

Then things, well, changed. Their namesake brands started being built by no-name mass manufacturers overseas, and the quality that had made Kenmore and Craftsman household names went down the toilet with it. The stores fell in to disrepair. They had no marketing direction, floating on the momentum of "well, we're Sears, we'll always be relevant," until they weren't. The 44th street store is a smelly, slipshot place that belies the industrious retailer Sears once was, and resembles it these days in name only. Marketing, business plan, advertising, whatever it was, Sears has failed in nearly every respect. And it's sad.

JCPenny wasn't nearly as critical a retailer for us as Sears, but its clearly a rudderless company that is grasping for direction and air. THe Apple misstep was a gargantuan failure, right down to the logo change. And I think Pete is more or less right in the general notion that both stores are examples of a bygone era in US retail - the big box, multidepartment store that serves everyone. And its precisely the reason I loathe the JCPenney store in Moore - its so freaking huge you have to pack a stinking lunch to get from the front door back to whatever department you want. And the perpetual reinvention of the company has been, well, exhausting. I can't see them continuing to hemorrhage cash before someone sees the writing on the wall and calls it a day - the recent closure of 33 stores and layoff of 2,000+ employees is probably only the beginning in much the same way the early shutdowns were harbingers of bad things to come for Blockbuster over the last few years as their market disappeared from beneath them.

Who will fail first? I guess with KMart to prop them up, Sears might endure longer merely through the sheer force of will of its owner. But JCPenney has hardly much better future, seems to me. There's hardly much future for either. As for who will last? Who knows. As likely to end up a photo-finish to the bankruptcy line as either one hitting it first.

[Pete]

Sears was almost as big and routine a part of my family's shopping efforts as TG&Y. A week without a trip to the Sears catalog desk to pick up an order was an exception. Sears used have a candy counter with hot, roasted peanuts and popcorn, the aroma of which would flow through the store. On the south end was a big coffee shop, and to the west were the hardware and sporting goods where they always had the current incarnation of Pong on display and for sale - and I never lost a game . They sold furniture, console TV's, VCR's, you name it, and Sears had it.

When I was very young, it was the same for my family with the Sears at 23rd & Penn.

I think we bought all our appliances and hardware there in the 60's.

[poe]

I've had pretty good luck with JCP; bought quite a bit of decent items there since last summer, and they had good sales during Christmas. I got a Cuisinart coffee maker for $20 cheaper than at Kohl's. Sears, on the other hand, I wouldn't miss. For awhile, I got my car serviced at Sears, but the staff always seemed to hate their jobs and usually argued with each other in the presence of customers, so I decided to go somewhere else. The Sears store in Amarillo seems to always have activity in the tool section, but that's about it.

[Soonerman]

Well folks, Sears in Shawnee is going out of business.

Sears store in Shawnee closing - News - The Shawnee News-Star - Shawnee, OK

[bchris02]

Sears, definitely. It's a relic of the past along the lines of Montgomery Ward. I disagree about department stores going the way of the dodo though. High-end ones like Nordstrom, Saks, and Neiman Marcus are doing well and I am pretty sure Macy's and Dillard's are doing well also. Another one that is doing pretty well is Belk, which doesn't have a presence in OKC but is every bit as high-profile as Macy's and Dillard's in malls in the Southeastern US.

[zookeeper]

Sears, definitely. It's a relic of the past along the lines of Montgomery Ward. I disagree about department stores going the way of the dodo though. High-end ones like Nordstrom, Saks, and Neiman Marcus are doing well and I am pretty sure Macy's and Dillard's are doing well also. Another one that is doing pretty well is Belk, which doesn't have a presence in OKC but is every bit as high-profile as Macy's and Dillard's in malls in the Southeastern US.

It's not just high-end stores that are thriving. You left out the largest department store chain in the country. Kohl's is sitting mighty pretty.

[Bunty]

Sears, definitely. It's a relic of the past along the lines of Montgomery Ward. I disagree about department stores going the way of the dodo though. High-end ones like Nordstrom, Saks, and Neiman Marcus are doing well and I am pretty sure Macy's and Dillard's are doing well also. Another one that is doing pretty well is Belk, which doesn't have a presence in OKC but is every bit as high-profile as Macy's and Dillard's in malls in the Southeastern US.

I'm not surprised that Belk is doing well. The Belk store in Stillwater is much more impressive than JCPenney.

[mugofbeer]

I think if Sears would just drop clothing and concentrate on hardware and appliances and the contract their store size, they might make it. Turn into an Ace-like store

[Bill Robertson]

I think if Sears would just drop clothing and concentrate on hardware and appliances and the contract their store size, they might make it. Turn into an Ace-like store

I think they might be doing just that. There is an almost completed building just north of the old theater building on the west side of Quail with a sign "Sears Coming Soon". It's just about the size of an Ace.