The retail crisis continues as Sears and Kmart will close 43 additional stores. Numerous factors have contributed to stores closing, especially online shopping. But believe it or not, one market correspondent has used the situation to criticize President Donald Trump.
However, CNNMoney even reported that Sears Holdings “has struggled to stay afloat as customers turn away from traditional brick-and-mortar stores to shop online.”
Logical Reasons Behind Closures
Sears Holdings even admitted the company will focus “on bolstering digital sales” and try out some “small, specialized ‘concept stores’ that offer Sear’s [sic] best-selling items.”
USA Today reported:
“We have fought hard for many years to return unprofitable stores to a competitive position and to preserve jobs and, as a result, we had to absorb corresponding losses in the process,” Sears CEO Eddie Lampert said in a blog post.
“It is obvious that we don’t make decisions to close stores lightly. Our efforts have been, and will continue to be, fact-based, thoughtful and disciplined, with the goal of making Sears Holdings more relevant and more competitive for our members and other constituents.”
The company has closed 300 stores this year. This may not be the last we see of this, though, because Sears Holdings admitted back in March “there was ‘substantial doubt’ it would survive on its own, though the company said its cost-cutting maneuvers and other retail strategies would greatly improve its chances of carrying on.”
Sears Holdings has not turned a profit since 2010. Since then, it has lost $10 billion. Sears Canada “filed for bankruptcy protection last month” even though the country developed that leg in 2012.
Comparing Coal to Retail?
Fuzzy Slippers sent me an article from Yahoo! Market Correspondent Nicole Sinclair that placed the retail crisis on President Donald Trump. Because of course she did.
Sinclair complains that Trump has paid too much attention to the coal industry as the retail market consistently does not add jobs.
But in all honesty what can Trump do? The retail industry has not collapsed due to regulations and government strain. Physical stores have died out because of e-commerce.
Meanwhile, America’s retailers are closing stores faster than ever as they try to eliminate a glut of space and shift more business to the web. S&P blamed retailer financial struggles on their inability to adapt to rising pressure from e-commerce.
Urban Outfitters Chief Executive Officer Richard Hayne said as much on a conference call with analysts last month. There are just too many stores, especially those that sell clothing, he said.
“This created a bubble, and like housing, that bubble has now burst,” said Hayne. “We are seeing the results: Doors shuttering and rents retreating. This trend will continue for the foreseeable future and may even accelerate.”
The retail crisis also didn’t start with Trump’s presidency. CNNMoney reported that Sears Holdings “closed 240 stores last year and 53 in 2015.”
That same Bloomberg article noted that many companies have decided to concentrate on online shopping:
Others are trying to re-emerge as e-commerce brands. Kenneth Cole Productions said in November that it would close almost all of its locations. Bebe Stores Inc., a women’s apparel chain, is planning to take a similar step, people familiar with the situation said last month.
“Today, convenience is sitting at home in your underwear on your phone or iPad,” Buss said. “The types of trips you’ll take to the mall and the number of trips you’ll take are going to be different.”
How do I economy? How do I market? You follow the demand. More and more people (including me) prefer to shop online. If that’s what your customers want that’s what you have to give them in order to turn a profit and stay in business.DONATE
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