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What Recovery? Sears And J.C. Penney Are Dying
Submitted by Michael Snyder of The Economic Collapse blog,
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...
Selma, Ala. -- Selma Mall
Rancho Cucamonga, Calif. -- Arrow Plaza
Colorado Springs -- Chapel Hills Mall
Meriden, Conn. -- Meriden Square
Leesburg, Fla. -- Lake Square Mall
Port Richey, Fla. -- Gulf View Square
Muscatine, Iowa -- Muscatine Mall
Bloomingdale, Ill. -- Stratford Square Mall
Forsyth, Ill. -- Hickory Point Mall
Marion, Ind. -- Five Points Mall
Warsaw, Ind. -- Marketplace Shopping Center
Salisbury, Md. -- The Centre at Salisbury
Marquette, Mich. -- Westwood Plaza
Worthington, Minn. -- Northland Mall
Gautier, Miss. -- Singing River Mall
Natchez, Miss. -- Natchez Mall
Butte, Mont. -- Butte Plaza Shopping Center
Cut Bank, Mont.
Kinston, N.C. -- Vernon Park Mall
Burlington, N.J. -- Burlington Center
Phillipsburg, N.J. -- Phillipsburg Mall
Wooster, Ohio -- Wayne Towne Plaza
Exton, Pa. -- Exton Square Mall
Hazleton, Pa. -- LaurelMall
Washington, Pa. -- Washington Mall
Chattanooga -- Northgate Mall
Bristol, Va. -- Bristol Mall
Norfolk, Va. -- Military Circle Mall
Fond du Lac, Wis., Forest Mall
Janesville, Wis. -- Janesville Mall
Rhinelander, Wis. -- Lincoln Plaza Center
Rice Lake, Wis. -- Cedar Mall
Wausau, Wis. -- Wausau Mall
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.
So have you been to a Sears or a J.C. Penney lately?
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Montgomery Wards revisited!
I was waiting at the counter in a Wards store in the final months, and witnessed an old fella get so bummed about the disgraceful service that he pulled out his antique looking Wards charge card he'd had in his wallet since 1962, grabbed a scissors, cut it in half, chucked it, and walked out.....
It was from this era (scroll down!):
http://www.flickriver.com/photos/christianmontone/sets/72157622012135293/
Thanks for sharing. Where's the frikin Galmbles add, man?
Campbel's oyster stew, yum!!!
The only stores I see springing up everywhere are Chase branches and CVS Pharmacies. I guess psychotropics and debt-based currency go together. :(
Sears - Where America Shops
Couldn't resist that one, Band.
Wife went to Sears last week to "look" at washers/dryers. The department manager had just 5 minutes before she got there lowered the price of a floor model w/d set, new model year priced at $1850, to $675. Guess what we had delivered today?
BTW, a floor model top of the line refrigerator was priced at $200. Too bad we didn't need one.
sounds like you snagged a good wife...
I need a new fridge. Where is this sears at ??
Sears is at the far end of the mall, the fridges are at the flea mkt.
Hope you didn't get a front loader. Sears appliances aka Kenmore are another brand bought by POS Whirlpool. I can't begin to tell you the trouble I've had with WHP.
Got a Speed Queen to replace them. Commercial grade, metal gears. Could not be happier with them. Both for the cost of the WHP washer.
Continued consolidation and declining quality. Can't find a decent replacement for my old Maytag washer/dryer. Bought a Korean fridge to replace the old GE and dw is wondering about all the 'mystery' dents - stainless seems to dent if you sneeze near it.
The stuff available today is crap.
Yes, Speed Queen!!!!!!!!! My last Kenmore washer was a lemon; clutch after clutch had to be replaced. My neighbor had bad luck with FIsher and Paykel (kept breaking) and Maytag (shredded clothes). So I ordered a Speed Queen on Amazon - they are still made in Wisconsin. It took three weeks to arrive (very frustrating), and it is a water hog by today's standards. But at least it WON"T BREAK. It is very well made.
Retailers are full of cheap merchandise that nobody wants. Unless you go to a high end store, you can't find womens clothes made of quality fabrics. Now they are made of spandex and I don't know what else, but after 3 washings you might as well through them away. Kleenex has more heft then some T shirts at Target.
Target clothing is cheap garbage. It looks awful even before its first washing. Walmart's clothing is, oddly enough, much better made. It will always look dowdy, but the fabric is thick and sturdy and it won't fall apart.
Best Buy is next.
sears already boned the common and the retirees once - with the discovery of amazing real estate values AFTER bk. This second bk will be the real deal for sears and not an accounting setup.
JCP hasn't gone through this first type of bk yet. Good luck common and retirees.
I thought Sears went out of business years ago. Huh.
Sears began life as a catalog store, the precursor to the internet store.
If they were smart they'd close all the stores and become an internet outfit, like amazon.
yeah, but that train pulled out of the station around 1995...
I don't know what Fast Eddie is doing with Sears - some kind of tax hedge or protection for his Hedge. Clearly heading BK - you could see it 10 years ago.
And f'g Kmart - at my nephew's wedding in Kentucky they sent me into town for more booze and ammo and the only I could find was a Kmart. Holy fuck I've seen better stocked and cleaner stores in the outback in Burma and Laos.
So combining 2 POS brands into 1 large POS. Brilliant deception.
Booze and ammo at a KY wedding...now there's a recipe for a damn good time.
;p
I bought a great circular saw (Ryobi) for $35 last year at Sears. Lowest price anywhere else was $69.95.
In my experience Sears is charging MORE for most things. You can get Craftsman tool sets at COSTCO. Not the same as the old stuff though. My father's 1960 Craftsman wrenches and sockets are 1/3 the thickness of the current stuff - can fit in places the new stuff can't get near.
When you've got Lowes and Home Depot in a market they keep each other on top of their game. The stuff sold there is lower quality than what's made for general sales. For higher end tools, you're better off online or at a local contractor supply.
If you pay attention to sales and deals you can do pretty well at the big box guys. The X-Mas sales had some good deals on tools - with prices even lower now to clear inventory. Husky work cabinets comparable to Harbor Freight on sale stuff as well. You just have to know what you're buying. HF can have good deals on limited use stuff but quality can vary termendously.
I stopped going to JC Penny when they dropped their stafford underwear and t-shirt line....
Mine lasted a month, then the charger died. No 12 volt, ever again - now have a useless saw, light, and drill; battery replacement with new charger is just under $70.
Fail.
You guys really do have the strangest kinds of underwear over there in the US.
What, like the metrosexual, bananahammock imporium "intimissi" we have over here?
These dinosaurs have been propped-up way beyond when they should have passed away. Propped up by loose credit and the inefficient allocation that is wall street - a front for central planning and a rigged game as zh sometimes chooses to point out and overlooks when it suits the agenda. Loose credit is crushing little players as the markets are flooded with ever more leveraged super stores and pet.com. The hardworking common sense little guys can than uncle ben for crushing their dreams
Thank uncle Ben ??? Doubtful.
How many remember the other half - Roebuck ???
In every small town across the midwest, there was an alcove-sized sears outlet where the orders from the catalog (our wish book) were sent and received. A telephone call ensued when the item arrived, anything from a spinning jenny to a cast iron stove, and there were few days more exciting than the Trip to Sears, Roebuck.
1947 Catalog goes for well over $100 fiats on ebay - http://www.google.com/search?client=safari&rls=en&q=sears+%26+roebuck+ca...
5 stores closing in Wisconsin, most in small towns, anchoring a small mall. Sad. Very Sad.
I remember the Sears catolog used to be as thick as 2 telephone books (i'm 44) you could buy anything , car engine parts , furniture , anything !! Irecall that in the old days you could even buy a house from Sears ..
I remember the Sears catolog used to be as thick as 2 telephone books (i'm 44) you could buy anything , car engine parts , furniture , anything !! Irecall that in the old days you could even buy a house from Sears ..
JC Penney had much better women's lingerie models and much better lingerie. I enjoyed those as a boy. Now they have Victoria's Secret.
What's the skinny on who will file first?!
Consumerism is dead, back to work......
Sears needs to pull a Goldman and convert itself into a bank.
I feel very badly for any innocent employee that gets hurt by losing their jobs with these companies.
But riddle me this.....how can Kohls Target etc. make it.....and these guys cannot?
I suspect foul management.
Is Kohl's really making it? It seems to me they just put $10 off cards in the mailed circulars every now and then to get people into the stores. That gets turnover up, but has to bite into profits.
I'm happy with kohls. Old navy even better.
About 15 years ago I got some Kohl's gift certificates as a "thank you" for coaching a youth soccer team. Bought a couple of polo shirts and two pair of shorts. This was late spring and the items did not make it through the summer. The shirts developed pills and the shorts developed holes. The items were very thin to begin with. I have never purchased anything from there. I buy quality. Pay a little more, but lasts much, much longer. Also looks better.
Kohl's makes it because they make their profits overseas, just like Nike et al. In Europe you pay $100 - $200 for a pair of Nikes, $60 for a bit of Kohl's face cream. Levi's: $150 - $600 for a pair. etc etc... Europe is subsidizing US companies.
This brings back the good old days for me! Check these prices out!
http://www.flickr.com/photos/wishbook/sets/72057594058700769/page3/
I say we need a new branch of Gov't, FedMart, it will buy out JCP & Sears & Best Buy, save the shareholders and bondholders and bankers. Its the right think to do, Bailout...........
Sears Canada is dying also. Some 12 years ago, Sear's USA came in and bought up all of the "Eatons" stores which was a very popular department store chain in Canada which had been around for well over 100 years. About 6 months back Sears Canada stated it was closing a bunch of stores and laying off well over 1600 employees. Surprisingly, they are closing their largest store which is located in Downtown Toronto's "The Eaton Center" ironically enough.
Isn't Nordstrom going into that Eaton Centre? Maybe they'll accept tire returns too...
Yes, I do believe you are correct that Nordstrom is taking over the vacant room left by Sears. Not sure how big Nordstrom is. Sears used to occupy something like 3-4 floors in the Eatons Centre. Will Nordstrom occupy all 4 floors or just 1, that being the main street level floor????
Went "shopping" this weekend and both purchases were used items off Craigslist. Sorry, Sears, your 7000 shop-your-way reward points offer to save $7 just doesn't cut it anymore.
I've walked through them at malls, but didn't buy anything.
I almost always end up parking near the Sears in big malls because no one wants to go in them and walk through into into the main mall. It happens so often that now I plan on it.
Michael Snyder has got to be the worst writer who has ever lived.
If you think congress cares a flying fuck about this, I promise not to come in your mouth.
That's going to be alot of empty retail space...for a long time.
That's going to be alot of empty retail space...for a long time.
Convert Sears and JCP stores into Univesity of Phoenix campuses. You're welcome.
You forget "Emporium" dept store. Nordstrom is dying too? Kohl's/Marshall/Ross beat Sears/JCP to death.
My health insurance cost just went up $2,500 per year. What did I do? I immediately went to Sears and bought all new appliances! NOT. What I really did was go to Best Buy and look at new applinces. Then left without buying anything. Thanks Obama...he was right...$2,500 per year! He got the number right, just not the direction. And what is the rest of Washingon doing to remedy our national mess? All I hear are proposals that will make everything worse! Afterall, Washington likes it's new found power. Leave it it John Roberts, he can find a needle in a haystack..when the left needs one
My health insurance cost just went up $2,500 per year. What did I do? I immediately went to Sears and bought all new appliances! NOT. What I really did was go to Best Buy and look at new applinces. Then left without buying anything. Thanks Obama...he was right...$2,500 per year! He got the number right, just not the direction. And what is the rest of Washingon doing to remedy our national mess? All I hear are proposals that will make everything worse! Afterall, Washington likes it's new found power. Leave it it John Roberts, he can find a needle in a haystack..when the left needs one
Great article, unfortunately. If a republican was president of the U.S. all of this would be reported hourly. We have voluntary old Soviet style media who are as much a part of Obama's lying and destruction of this country as any one else. I wonder if they have any conscience at all.
Seems Wisconsin Munibonds are in default
There is an obvious recovery for many businesses, in fact, most businesses have been back to normal.
Looking at big box stores that overexpanded as an indicator is kind of stupid. Specialty stores are doing pretty well.
Also, I have never bought anything from Sears in the last 8 years. I was visiting nearby town and Sears there was having store closing sale, I went in to take a look. THERE IS STILL NOTHING THAT I WOULD WANT TO BUY THERE.
This is more of a sign of complete merchandising mismanagement. I also saw mostly older people working there. I don't have anything against older people, but there's certainly lack of 'spark' about the Sears stores.
JCP that's Sears^2. They should rename themselves into "Clothes from 70's Show Store" At least that would catch some attention. Oh, and maybe ugly 90's sweaters.
We bought ammunition at JC Penney and Sears in the 60's. We don't live in the 60's any more. We do however live in America. If our largest retailers aren't aware enough to understand that what they are selling Americans aren't buying and make the necessary changes they deserve to go out of business. My company went BK in 2010. I had worked with them for 20 years and helped the company expand from 3 Ohio citiies to 14 across the upper midwest. When the overall economy caved in 2008 the company went from almost 23 million in sales to not enough to support its factory and staff there. Result, BK. Many good people lost work that they fully intended to continue until they retired. See, if a rising tide raises all ships a lowering tide lowers as many or sometimes more. It is easier to tear down than to rebuild. I read and don't remember the source that 20,000 factories have closed in America since the year 2000. Let that sink in for a moment. We won't ever live in the 60's again nor any decade already past. Retailers retail to the public, hence the label retailers. The internet will show you a video how to do a brake job. That does not make you hand with tools. Working with tools makes you handy with tools. Our nation is in trouble. Our retailers are in trouble. The real estate market is all smoke and mirrors. I don't condem young people who are looking for work. My girls are 23, 30 and 34. My grandkids are 9, 6, 3 and one and a half. Will the America they raise those grandkids in look different than when I grew up? You bet they will. My 6 and 3 year old grandsons ride in the combine. The six year old will be there when we kill and cut and wrap four steers next weekend. Change is what life is about. Teach your children well. Teach them to make things, fix things, do things. American wasn't built with thumbs on a keyboard. It was built with wrenches, and dozers and tractors and cranes. It will be maintained and fed with the same. You want Sears and Penneys gone? Don't shop their. Poor choices will always have consequences. If you don't sell what the public wants you will close.
I went to the mall yesterday to find some socks. They're not that obscure, but I failed to find anything there. I did get a good round of walking around. Went home and bought them from Amazon.com. That's why these stores are failing. I want to buy stuff. I'm even cutting short the limited amount of time I have on my game to go to the stores. I failed to find any, and have to go to the backup plan of Amazon.com.
Right you are-I do my shopping online too. It's a lot simpler and I can get exactly what I want.
Sears, JCP etc. need to face the truth-they are relics of the past.
Everyone in our family and friend network has been boycotting J.C. Penney ever since the company jumped onto the pervert bandwagon. Die, you sick bastards, die!
Pleistocene era entities such as Sears should have their executives go undercover so that they can get a clue.
This is the calm before the storm.
I will not be sad to see them go. Their deaths will mean more decentralization of goods & services, which is exactly what this country needs.
American Retailers could make shopping an adventure again, IF they want the customer's $$$, they ought to be open to negotiating the deal; haggling, if you will.
Got money to spend? It's foolish to pay full price. Lots of places to buy as-new stuff for nearly nothing.
All this China shit costs these guys next to nothing, time to make a game out of shopping.
Of course, all this empty mall space will turn-into something like an indoor Thieves Market, a'la Mexico City. Ever been there? Lots of Izod shirts and real-deal designer stuff; higher than retail, but you get to offer/bid/haggle....
Only things I buy new/retail anymore are underwear and Carharrt double-faced canvas jeans, sometimes shoes. Everything else manages to come from Craigslist or resale/thrifts. What do I care if it is "new"? Gonna wash it or have it laundered anyway...
In the last two days there was a very good ZH article that connected the dots for me. Basically we have reached peak crap and real wages are in a nose dive. This year its Sears and JCP; next year it will be Walmart. One of the posters posted a link to an interview Sir Jimmy Goldsmith did in 1994 with Charlie Rose. He called this disaster 20 years ago in a prescient call.
http://www.youtube.com/watch?v=4PQrz8F0dBI
"Compare, you can't do better than Zayre's"