Bankrupt US retailer Sears has informed 80 further stores of impending closure, in addition to the 40 store closures already announced. The second batch of closures is expected to be finalised by late March 2019, with liquidation sales expected to begin in early January 2019. The closures have been made in an effort to accelerate and facilitate the ‘strategic transformation’ of the business, as well as assist its financial restructuring, though GlobalData Retail managing director Neil Saunders notes that the brand is now at rock bottom.
“As a last roll of the dice, Sears has attempted to shrink its way to success by closing stores,” Saunders said.
“While closure sales have helped to temporarily boost footfall and revenue at some shops, they have done nothing to put the firm on a sound footing. Nor have the efforts improved perceptions.”
According to data from the research firm, overall customer usage of both the Sears and Kmart brands has fallen over the holiday period, and brand perception has fallen below the year prior.
“Ultimately, reinventing Sears now would be akin to raising the Titanic and making it seaworthy again: a thankless and rather pointless task,” Saunders said, continuing that liquidation is the most likely outcome at this point of the bankruptcy process which began in October 2018.
“In our view, the lack of bids and the difficulties [Sears chairman] Eddie Lampert is having in raising finance for his own offer reflects the fact that Sears is essentially worthless.”
Lampert stepped down as company chief executive when it filed for bankruptcy in October, and made a last-minute US$4.4 billion bid to buy the retailer in late December.
The bid would “offer employment to up to 50,000 associates”, according to CNBC, and may divert the liquidation process should Sears’ advisors decide the bid to have come from a “qualified bidder”.