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Thanksgiving Day Massacre: Sears Slaughtered On Collapsing Margins, To Shutter Hundreds Of Stores, Provides Revolver Update
That retailer Sears, aka K-Mart, just preannounced what can only be described as catastrophic Q4 results should not be a surprise to anyone: after all we have been warning ever since the "record" thanksgiving holiday that when you literally dump merchandize at stunning losses, losses will, stunningly, follow. Sure enough enter Sears. What we, however, are ourselves stunned by is that as part of its preannouncement, Sears has decided it would be prudent to provide an update on its credit facility status as well as availability. As a reminder to anyone and everyone - there is no more sure way of committing corporate suicide than openly inviting the bear raid which always appears whenever the words "revolving credit facility" and "availability" appear in the same press release. Just recall MF Global. And here, as there, we expect shorting to death to commence in 5...4...3...
Sears Holdings Corporation ("Holdings," "we," "us," "our," or the "Company") (Nasdaq: SHLD - News) today is providing an update on its quarter-to-date performance and planned actions to improve and accelerate the transformation of its business.
Comparable store sales for the eight-week ("QTD") and year-to-date ("YTD") periods ended December 25, 2011 for its Kmart and Sears stores are as follows:
QTD
YTD
Kmart
-4.4%
-1.8%
Sears Domestic
-6.0%
-3.3%
Total
-5.2%
-2.6%
Kmart's quarter-to-date comparable store sales decline reflects decreases in the consumer electronics and apparel categories and lower layaway sales. Sears Domestic's quarter-to-date sales decline was primarily driven by the consumer electronics and home appliance categories, with more than half of the decline in Sears Domestic occurring in consumer electronics. Sears apparel sales were flat and Lands' End in Sears stores was up mid-single digits.
The combination of lower sales and continued margin pressure coupled with expense increases has led to a decline in our Adjusted EBITDA. Accordingly, we expect that our fourth quarter consolidated Adjusted EBITDA will be less than half of last year's amount. For reference, last year we generated $933 million of Adjusted EBITDA in the fourth quarter ( $795 million domestically and $138 million in Canada ).
Due to our performance in 2011 we expect that we will record in the fourth quarter a non-cash charge related to a valuation allowance on certain deferred tax assets of $1.6 to $1.8 billion . Although a valuation adjustment is recognized on these deferred tax assets, no economic loss has occurred as the underlying net operating loss carryforwards and other tax benefits remain available to reduce future taxes to the extent income is generated. Further, we may recognize in the fourth quarter an impairment charge on some goodwill balances for as much as $0.6 billion . These charges would be non-cash and combined are estimated to be between $1.6 and $2.4 billion .
"Given our performance and the difficult economic environment, especially for big-ticket items, we intend to implement a series of actions to reduce on-going expenses, adjust our asset base, and accelerate the transformation of our business model. These actions will better enable us to focus our investments on serving our customers and members through integrated retail – at the store, online and in the home," said Chief Executive Officer Lou D'Ambrosio. Specific actions which we plan to take include:
- Close 100 to 120 Kmart and Sears Full-line stores. We expect these store closures to generate $140 to $170 million of cash as the net inventory in these stores is sold and we expect to generate additional cash proceeds from the sale or sublease of the related real estate. Further, we intend to optimize the space allocation based on category performance in certain stores. Final determination of the stores to be closed has not yet been made. The list of stores closing will be posted at www.searsmedia.com when final determination is made.
- Excluding the effect of store closures, we currently expect to reduce 2012 peak domestic inventory by $300 million from the 2011 level of $10.2 billion at the end of the third quarter as a result of cost decreases in apparel, tighter buys and a lower inventory position at the beginning of the fiscal year.
- Focus on improving gross profit dollars through better inventory management and more targeted pricing and promotion.
- Reduce our fixed costs by $100 to $200 million .
In addition to the specific store closures listed above, we will carefully evaluate store performance going forward and act opportunistically to recognize value from poor performing stores as circumstances allow. While our past practice has been to keep marginally performing stores open while we worked to improve their performance, we no longer believe that to be the appropriate action in this environment. We intend to accentuate our focus and resources to our better performing stores with the goal of converting their customer experience into a world-class integrated retail experience.
We currently expect the store closure and inventory reduction actions to reduce peak inventory in 2012 by $500 to $580 million and reduce our peak borrowing need by $300 to $350 million in 2012 from levels that may have resulted in 2012 without such actions.
At December 23rd , we had $483 million of borrowings outstanding on our domestic revolving credit facility leaving us with over $2.9 billion of availability on our revolving credit facilities ( $2.1 billion on our domestic facility and $0.8 billion on our Canadian facility). There were no borrowings outstanding last year at this time.
During the fourth quarter through December 23, 2011 , we have not repurchased any of our common shares under our share repurchase program. As of December 23, 2011 , we had remaining authorization to repurchase $524 million of common shares under the previously approved programs.
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I bought my son a metric socket set there recently. Store was pretty quiet for the Christmas season. I could see Best Buy sinking next year too.
No. no, no things are just fine. AAPL will save everyone. Their new iEconomy app will be out soon.
Let's just hope their new plutonium batterie is strong enough to run the full app.
I read that it's going to be a hydrogen fuel cell battery that will keep it running even after the end of time.
And we are clearly witnessing the death of the Big Box. In the west. Here in India.... mushrooming.
Malls and big-box retail, now wal-mart has a partner, Tesco has a partner....
It's just a shift of priorities. Many more willing/controlled dupes here in the east it seems.
ori
/the-plan/
"And we are clearly witnessing the death of the Big Box. In the west. Here in India.... mushrooming."
Let's hope. Next time they will think twice before pushing manufacturing overseas. I wonder why Americans are spending less. Could it be that jobs are less plentiful?
Don't worry......the 4th greatest President is coming to the rescue.
Dream of green shoots baby......dream on.
Just as soon as they can sand off George Washington's face from Mt Rushmore......he's going right up.
I harken back to my (admittedly anecdotal, but now becoming confirmed on a wider, more nationalized basis) experience in big box and mall stores that had lighter traffic in the week before Christmas Day than at any other time than I can recall in my lifetime. Foot traffic was so light, in fact, that I had store employees, including a store manager at Home Depot, remarking to me on the 'oddity' of it all.
That brick and mortar retail is getting killed should be no surprise and not have any 'odd' aspect to it when one considers that a) online "e-tailers" are using their operational efficiencies to undercut brick and mortar stores, and especially b) fewer Americans can afford to do nearly as much shopping nearly as often given how Ben Bernanke & The Non-Federal Reserve Non-Bank has used monetary policy to absolutely break all markets, whether financial or economic, and use it to subsidize and transfer extraordinary amounts of cash/fiat/credit to banking and financial entities, essentially shifting monies that would have been available to be expended in the retail and other sectors of the economy in terms of consumption and job creation towards the too-big-to-fail and hundreds upon hundreds of other financial entities (flooding them with trillions in subsidies).
This process will only accelerate now as Americans continue to deleverage as long as Bernanke's policies continue & grind their real incomes and standard of living into a fine powder: This year the Sears, Kmarts and Best Buys; next year the Sam's Clubs, Costcos and Grocery Chains.
Bernankeconomics 101: Robbing from Peter (organic, real economy) to pay Paul (subsidizing inefficient and non-job creating, as well as black holes of vicious capital destruction, financial sector) & driving the sales at Dollar Stores through the literal roof.
Strictly anecdotal, but it seems to me that flea markets are becoming the new American malls. I see more and more flea markets opening around the country. Most of the stuff for sale is new cheap plastic Chinese crap.
more typical of the third world market, for anyone who has been there. Stall after stall of the same, cheap crap.
usa is slowly becoming a third world country. very slowly...
No it will be quite sudden. All they need to do is stop the checks going out to half the population who is alive only due to those govt checks, and we're Zimbabwe overnight.
The checks will never stop thanks to the invention of the PrintingPress!
The 3rd world drive is not THAT slow. I remember as a boy crossing into Mexico, and even then thinking, this "stuff" looks like a bunch of cheap crap...who would buy this? That's the exact sentiment I experience today walking through NICE malls. The building are beautiful, the marketing, lighting, music, etc. is all the best it's ever been....and the products they sell are cheap crap.
Toy Stores used to be FULL of very cool items. Today, nothing but cheap disposable crap. My 4 pound all Steel John Deere tractor toy from 1970 sells for considerably more today on Ebay than it did in 1970. That will not be true of the crap that's sold today. Todays $20 toy will be in a yard sale in 4 years where the owner will be arguing over whether to sell it for 20 or 30 CENTS!!
The advantage Europe had in their "decline" is that when they lost their power they still had assets that lasted for centuries. (e.g. homes, churches, roads, etc..) America will not be so fortunate as we've sold our financial souls for short term gratification above all else.
More anecdotal, there is a Thrift Shop close to my home. For years it kind of carried on with not many customers. The past couple of years their parking lot is always full. There is no stigma with getting stuff at Thrift Shops any more, particulary among people in their 20's.
Speaking anecdotally from my recent experience as a seasonal hire at a major retail/catalog company, I can say that "e-tail" didn't do all that well this Christmas either. Phone/net/mail sales were down 10-15 percent below projections, which had already been scaled back because of the economy. I suspect the Sears/K-Mart announcement is only the first of many we'll hear over the next few months.
... hmpph ... The Dollar Store in a shopping mall near me went out of business just before Thanksgiving They must have been truly inept.
The consumer is absolutely cash strapped and credit broke. No credit = no goodies. When folks are forced to spend their paycheck-to-paycheck on necessary items such as food and rent (and I shutter to think healthcare in the form of Rx), the plastic crap becomes unneccesary altogether.
I can't corroborate it quantitatively, however, I would bet that this year was probably the largest in Layaway sales that Sears and Kmart saw in at least 10 years.
If gas prices increase (although I'm sure the Great Obama will do his best to stop that from manifesting itself prior to his re-election), then game over. Now the decision will be: "Do I pay 30% of my after-tax dollars [on gas to be able to get myself] to work or do I simply just go on government cheese?" Factor in the cost of daycare and you have your answer.
IMHO, If O gets in for a second term, this will become the norm rather than the exception.
The question is, can we find a big enough piece of coal to carve his face into?
Don't worry......the 4th greatest President is coming to the rescue.
Are you expecting a resurrection?
Are there any living presidents in the top 20?
"They" still don't understand that it was them that forced manufacturing overseas. They just imposed regulations "for the good of X lobbyist, I mean, uh, er, the people". The regulations raised the cost of doing business until it became prudent to source goods abroad.
I want to thank whoever "They" is/are. At least we have all that clean air to breathe and clean water to fish in thanks to government (EPA) strangulation, er, regulation. And workplaces are so much safer, if you're lucky enough to have a workplace, thanks to OSHA. Not to mention kinder and gentler now that all gender, racial and religious humor has been banned.
I'm so glad my job ended in August. Now I have no excuse not to go to the beach and just 'hang out'. Pretty soon I'll start collecting my Social Security benefit, so a heartfelt 'Thank you' to anyone still working and 'contributing' to my retirement, as well as paying my medical expenses via Medicare (not much choice there once one reaches 65).
It's amazing what hundreds of years of caste system training can produce. To their credit, some are waking up:
http://www.salem-news.com/articles/july122011/india-monsanto-beaten-tk.php
Not so much since India just decided to cancel 51% ownership for commercial retailers.....my gut feeling is this - why would you suffer the hassle of going to a big box store on the outer limits of the city / suburbs when one can just as easily stay home and order on-line - whilst tracking 1/2 dozen different stores for the same product / pricing with delivery thrown in? Internet killed the box stores and India has already realized that....why suffer the capital losses of stores / advertising / staff etc... when you just need warehouse / distribution?....I did my entire x-mas shopping from home this year all delivered.....
All the Best Buy stores near I are in sad shape. The shelves haven't been properly stocked in at least 6 months. Even display items are missing regularly. The employee to customer ratio is easily 4:1 on any given day, and most of those customers are at the return/geek squad counters.
What are the rest of you fine ZH people seeing? Is this just something in my area?
Noticed the same inventory and display situation at Best Buy and KMart months ago. KMart had a/c temp turned way up, half of ceiling lights turned off, too.
I was shopping the large chain furniture stores. As I entered each one I was literally jumped by three or four sales "associates". When I found what I liked I simply looked at the price and stated what I'd pay for it. Each time I received my price.
Best Buy and the Geek Squad are the pits. GS service is so bad it can't be measured but it's good for me because I get paid to fix their f'ups. I know people who were pressured to buy the in-house warranty/service and won't even use it because they know it's a disaster and would rather pay again just to have things fixed right the first time. BB was a source for upgrade purchases for me until they changed their policy and wanted me to bring in a new tax exempt certificate EVERY time I bought something for resale. No one could explain the change to me and since I had just bought several hard drives and was being charged the tax on it I decided I didn't need them. I was standing at the same register where they were rung up before the tax cert debacle and told the girl I needed to return them, 'But you can't, you just bought them!?' 'I did, I can, and I will' When she looked at the Manager who just failed to explain the tax cert issue I just stared him down. The new stores are just tiny display fronts for their goods and online in-store pickups. They have little if any inventory so if you shop one of their sales ads you'll likely never find it in stock unless you're the first one in the door. I send customers there to try out the laptops in person then find it online for them cheaper and order it in. Personally, I'll never set foot in one again.
I go in there because it's like a sheeple petting zoo.
I went to Best Buy last Friday to pick up a pre-ordered DVD for the wife (stocking stuffer). A few large flat screens were going out the door (hispanics with store credit???). Alot of smaller purchases were the norm (cell phone cases, gift cards, DVD's , music, etc).
I wanted to be in and out of the fucking place. I was stuck in the pickup line for about 10 minutes, waiting while a 17 year old, nose and eyerbrow pierced female "asociate" was on the phone trying to find some item for the guy in line in front of me. The dufus in line was a 25ish year old male, overweight, tatooed up to his ears. I noticed he was styling: wearing $150 sneakers and fake baggy camo pants. He was there with his mother who was buying him a bunch of Playstation games. I guess one of the games was missing from his order. Mommy has a good credit card and was fronting the order for jr.
Back when I was 25, I owned my own home, drove a new car and was working a fulltime job and a nightitime parttime job, playing off student loans as quickly as a could. I had no time for video games. I played weekend ice hockey in the winter and softball in the summer. When I had a night off, I was at the gym, lifting real weights. Real games. Real activity.
This is our future. Inept underemployed man-boys, living in mommy's basement, playing video games and masturbating to the Kardasian whores. When mommy finally kicks the bucket and the reverse mortgage takes her house, there will be millions of these Gen X-Y assclowns out on the street.
No doubt these people you describe are pathetic. But the incentives you had are just not there for most young people. I say that and I work 50-60 hours a week- but I am just observing my peers and their viable options. There was an article here on Zero Hedge in the last few months that showed the average highschool educated adult in the 70s had a better inflation adujusted income than college educated adults in 2011. I think you're focusing on the cultural aspect of laziness and ineptness, but don't forget, there are systemic issues affecting those who desire to work as well.
I agree the problem is systemic and related to a lowering standard of living which the Fed explains away as non-inflationary because people can substitute beans for meat as protein substitute and walking for driving as a transportation substitute. Also outsourcing manufacturing is part of the problem, the growth of gov employment, overleveraging of the private sector, etc.
And yes ZH posted that the average male blue collar worker has returned to 1970 or 80 income levels from what I recall.
yeah just talking about this last night,,,,, i used to mow lawns, deliver papers, and odd jobs when i was a kid. now you have grown men mowing lawns, delivering papers and doing odd jobs. there is no room left for the young man-boy to squeeze in and start making money.
also when you get out of college today you have way higher college debt and lower earnings to pay it off.
We used to get those free community newspapers... we don't even want those.
On the other hand, sometimes I wonder why my parents bother with their newspaper subscription.
I can't find fault with a single thing that you said there.
But what your words leave me with is the idea that there is an out for the people who were born into the greatest period of prosperity that this world has probably ever seen, and are currently going down faster than flies in a bug zapper.
Momauguin Joe's epistle was a magnum opus for me. Took me straight back to my youth, the weekly magazine of our local Saturday paper, featuring an in depth profile of Bobby Hull(don't look it up on wikipedia kids...Chitown Blackhawks guided missle with the hardest shot in hockey from afore yu was thought of)..Bob went home to Belleville to work the family farm in the off season....there was a pix of him forking hay bare chested that gave me the decided impression for the rest of my life that if anyone ever told Bob that his ambitions would be limited by his cultural circumstances, that fork woulda been up somebodies ass faster than you could say Moose Vasco.
Bob and his entire generation were consummate gentlemen. But at the end of the day, you fucked with them, on or offa the ice, things weren't nice. That's the difference between today and not too long ago....no quarter, no excuses. Best man won. How far we have fallen, in such short a time.
p.s. Joe, though you may not know it, You are a Writer. Use the talent lad. It's sorely needed.
Mr. Hull also happened to work for one of the nastiest pieces of crap in sports...Dollar Bill Wirtz. Look at the difference since his son Rocky has taken over the Hawks. Old man Wirtz couldn't be bothered to ever thank Bob and it took Rocky to make him welcome again. Let's not forget how vicious management can be.
Thanks Joyful. The writing comes in spurts. Bobby Orr was our guy here in the Northeast. I did see Bobby Hull play towards the end of his career with the Winnipeg Jets, against the local New England Whalers in the old WHA. Bobby Hull and those two Swedes on his line wreaked havoc everytime I saw him.
Time premitting, I'm starting research on one of the greatest hockey games I saw televised as a young lad with to intent of possibly writing a children's book on it. Back on New Years Eve 1975, the great Montreal Canadians (on the verge of winning 4 straight Stanley Cups) played the equally great Soviet Red Army team to a 3-3 tie in Montreal. Nonstop up and down action, a great game all around.
Find a DVD of thegame and check it out some time. Mahovlich, LaFleur, Dryden, Tretiak, Kharlamov, Mikhailov. They don't make them like that anymore.
couldn't agree more about the lame ass kids now. having been laid off from the auto field after 35 years i went to work at the local grocery store stocking the shelves at night. at 56 years of age i showed up for every hour they would give me. not true for my 18-19-20 year old co-workers, who picked and choose the hours they worked!!! the store manager would show up at 6:00 am all full of piss and vinager wanting to know why the work wasn't done....what???....hey moron...see anyone else here but the 56 year old???? yep, the kids won't show up for 2 or three days in a row and this ass clown manager couldn't even look at a time card to see who showed up for work on any given day. working in the inventory part of the automotive field for years i find it frightening that these ass clowns at sears have $10 BILLION in inventory and are just now getting around to inventory control...un-fucking believable. who the hell is running the store? some ass clown with a business degree who has reached the top of "A" field with no knowledge of the business they are in????? just wants to make a person dig a hole and pull the dirt in behind them.
It is because the incompetent promote the incompetent in a Failocracy where they don't want someone who will be so good as to challenge them and they want someone bad enough to pass the buck onto when they fail in the future as is inevitable...but at least the head failure is still in control.
Easy to Fix
Hand'em all guns and tell its just like a video game.
(And stay the fuck out of the way!)
Momauguin Joe,
While the majority 25 years old are complete fuck-nuts. Not all are. I got my girlfriend pregnant in high school at age 17. We both finished HS, got an apartment, I got two jobs. Fast forward 8 years.....We just had our third child last Monday, I own my current home in a nice, suburban golf course neighborhood, own and rent out our first home that we bought when we were 18, I finished my BS degree, I work for a living but am able to provide for my now family of 5 without my wife working outside the home. Shit, if you told me 8 years ago that I would be learning how this who financial system works (or doesn't work) through a site like ZeroHedge which is extremely technical for a non-financial professional, I'd laugh in your face and here I am....trying to learn how to not get raped by the system in the future. Hopefully hedging well enough with SPY puts, PHYS etf and going to buy a gun next month (still researching). Oh and did I mention I've listened to most of the lectures on mises.org and have been a strong, non-waivering Ron Paul supporter since 2007?
All in all, there's still some hope, I hope...
Otherwise, hand me some new-age piece of technology and let me put my blinders back on so I can be one of the sheeple again! LOL.
Good Job Aeon. Stories like yours give me some hope that possibly all is not lost and that some of our younger folks still have their shit together.
Some advice on guns, if I may. For personal carry consider a solid smaller double action REVOLVER (i.e. Ruger SP101). A semiauto PISTOL, when discharged, sends shells flying all over the place. A double action REVOLVER (like the SP101) is easily concealable in your clothing and holds 5 bullets (.357 magnum or .38 special). You fire and the revolving cylinder turns, with the spent shells remaining in the cylinder until you empty them.
If you get caught in a situation where you have to shoot and run, you won't have to worry about leaving behind empty shell casings for the cops to trace back to you. You can ditch the gun and be none the worse for wear.
Good luck to you and Happy New year.
GS is a joke, their only purpose is to tell sheep that replacing a hard drive is too much effort but that buying a new machine is easy. Especially if the sheep finances it.
I'm glad I live in a market with a Fry's.
The best buy in my area (bloomington, MN) was slammed Dec 24th. However, I'm not sure about the national level.
I just didn't do much shopping, let alone at brick and mortar stores during December, what with product availability windows being so narrow anymore and having to go online for practically anything made here. Even amongst what they do have at retail, the selection's downright terrible, like if you don't want a cardboard printer from HP or Brother don't even bother getting in your car. The two or three times I was out with family the stores looked busy, but who knows how much of that was window-shopping versus buying.
Hope and change is living it up in Hawaii.
Yeah, if only McCain had won!
Granted....only marginally better.....but still better.
I read that as
Margarine, it's like butter.
I read it like a choice between "Asshat" and "Douchebag".
+1000 - what makes anyone think McCain would have done anything different from Obama? McCain supported the NDAA.
If only. Just imagine a world where the POTUS is asked tough questions by the media, rather than the media begging for a seat at the table. Imagine the president actually getting some blame for gasoline prices doubling and for millions fewer jobs, even after expressed policy to increase jobs. Imagine real analysis of entrance into new wars instead of silence from the MSM.
Having a president who is held accountable versus one who isn't is the difference between a McCain and an Obama, even if their actions and policies were identical.
Blame the Discovery Network show "Hoarders: Buried Alive." They're curing way too many of them--at least two or three a week . . .
The headline is a lie: "to shutter hundreds of stores" when it's only 120
Well, it's technically innacurate, as it should read "[o]ver 100 hundred stores...", but this is a rather trivial bitch you're pitching.
But do not fret. It won't be long before "hundreds more" becomes the headline.
Sears/Kmart, as well as many other retailers, have now begun the unmistakeable wingless dragonfly death spiral caused in significant part by Bernanke's subisdization of Wall Street/Banks.
TruthInSunshine accurately observed:
This is confirmed by RobotTrader's recent touting of shopping mall REITs as a good investment.
The problem with Sears is that their customer base is largely working-class people, with a large component of illegal immigrants, basically people who don't own computers and can't get their stuff from Amazon. In other words, their customer base is the demographic group that is being squeezed the most by rising food and energy costs. Other than pepper spraying each other for Black Friday deals, they don't have the money to support the infrastructure and personnel costs of Big Box stores.
I watched the evening news just to see Monday sales and the local
story people told were that after xmas sales stunk and returns were
extremely high.
how about the apple douche who is trying to save jc penny. they're going down too...
I would add Kohl's too
There's a sale at Penney's!
http://www.youtube.com/watch?v=uJSgZYUnQn0
Thanks for the laugh, and the reminder. That was a FUNNY movie.
Heck of a week to try and quit drinking!
I'm not trying.....not this week.
Solid as Sears.
Doesn't someone hold this in their "charitable trust"?
Krammer is still batting a thousand...lol.
Someone is going to need charity.
"Solid as Sears"
Sound as a dollar.
Cheaper than dirt.
Three things that were true in the 1950s but not any longer. In 1955 a silver dollar 'cost' $1.00 and could be obtained at any bank. I don't know what dirt cost then, but I just paid $2 for 3/4 cubic ft. of dirt. The dirt (bags) in DC have gotten more expensive (to purchase) too, apparently. http://www.hawaiireporter.com/while-president-obama-arrives-in-hawaii-am...
IS Eddie Lampert still at the helm? If so the failure is obvious. Should have booted him out along time ago.
Eddie Lampert's entire plan from the beginning was to use Sears-Kmart as a REIT, and sell off the real estate on the non-leasehold properties for buku $$$.
One only has to harken back to the nosebleed real estate prices, especially in commercial properies, back in the 2000 to 2006 period, while the property bubble raged on, to get the Lampert 'vision.'
But no one could have seen the property bubble forming, and inevitably bursting (/s/.
Not Lampert, nor the Bernank:
Ben Bernanke's repeated forecast for real estate and banks (2005 to 2007) - YouTubeAnd this is after the Japanese had a nearly identical RE bubble/crash. And Grenspan/Bernake knew it. Hell I knew it cause it was in radical publications like "newsweek" "US news and World Report" "Business Week with Louis Rukhouser" (sic)
snarc: But we dont do anything like japan. we are different... we are not going to have two lost decades .....
CNBC needs to get Cramer on quick to tell everyone Eddie Lampert is the next Warren Buffett for the umpteenth time.
You mean $1.28 towels are now considered too expensive for Americans?
looks like they only bought the towels at sears/kmart...
Once used for wiping the tears away the towels were returned.
Sears figures out a way to get SNAP cards to useable there in 5...4...3...2...
Start selling chocolate wratchet sets, & pork rinds & snacks in it's TV dept...
Anybody know if SNAP cards can be used to buy the licorice & popcorn at the checkout at Best Buy?
What kind of margin do you think Sears is getting on those 1.28 towels? You could sell a towel to every man, woman, and child in America and I bet Sears will still be swirling the bowl.
They pay $.50 for the towel, actually get good margins on that. Margin is not the problem. For many products margin has never been higher. The problem there aren't enough consumers to pay the inflted price to clear inventory. Average sellthrough is around 5%, so even with 70% margin they don't sell enough to clear the initial cost of aquiring inventory.
Actually another reason why no one wants to buy a $1.28 trowel is because it is a cheap chinese piece of junk made from pot metal. It will snap in half the first time it hits a good-sized rock. Ask me how I know this.
I would LOVE to be able to buy a $30 trowel made of actual stainless tool steel whose lifetime could be measured in generations, not minutes.
Towels or trowels? Don't you have to pay more for adding the 'r' to towel? Is there a trowel made by Craftsman? I love Sears' tools. They're the only things I buy there.
lol dude
Towels are now fity cents at Dollar Store General (and other Dollar Stores), in the post Christmas 50% off a dolla' bill Yo sale.
Dollar Stores are the new Wal-Mart.
Wal-Mart is the new Macy's.
Christ, that is so sad. But you are right on the money. Walmart is now becoming 'high-end' for the destitute.
The destitute being about 62% of the population.
I actually do the majority of my shopping online, as you cannot find even satisfactory crap in box stores anymore. Even a garbage disposal. Got one for half the price as a crappy one that leaks in a year. Built solid, in California I think too.
I have a difficult time even finding acceptable items in most stores now. Just shake my head and walk out.
Speaking of Sears, I think I have a couple of cheap ass ratchets I have to see if they will still replace before they close. Even Craftsman is now basically junk for any tools that have moving parts.
pods
The K-Mart here in Holland, Michigan closed a couple of years ago. Now planning to make it a Senior Center, presumably for bingo nights. Sears has been in a downturn for years, too. Haven't checked out how they are doing lately but given all indications it can't be positive.
Where have all the good times gone?
The good times seem to be gone. Piss, Santa is even shooting people.
Prosperity was legislated away under orders from the globalists.
Where have all the good times gone?
My opinion, unbacked by any solid research, is that the good times began post WW II when U.S. manufacturers were the only ones left standing in the whole world. It was easy for the manufacturers and their unionized employees to make lots of money. There was no competition. Once Japan and Germany began making quality merchandise the party was over. Cheap electronics and automation did their part, too. The baby boomers got lucky to be born into such a can't-fail situation. Their kids are not so lucky; I think we're reverting to the mean.
Can anyone tell me if blue collar workers were ever considered middle class before the 1950s? I know that Henry Ford shocked everyone by raising workers' salaries to unheard of levels (for the era), so I doubt many of the blue collar workers were ever anything above the lower middle classes before the 1950s.
Maybe I'm totally off base in this assessment, but the good times seemed to coincide with our (the U.S.'s) postwar supremacy. Why and how we squandered that advantage is another story.
Calling Chainsaw Al... Calling Chainsaw Al... Calling Chainsaw Al
I'd rather look @ the Target & Best Buy numbers.
What could be happening is the death of the shopping mall as more ppl use the internet to buy goods.
And use Apple & Amazon guidance as confirmation of the trend.
I wonder if the Fed will start buying RMBS, if we are in the era of the death of the shopping mall.
Let's face it, driving to your favorite place of consumption is physically taxing. You have to like, walk and look at things, constantly reach for the credit cards.
Can't forget the massive crouds of annoying sheeple.
and make a run for your car to avoid the muggers, carjackers, and panhandlers.
Not to mention avoiding Feral youth:
http://minnesota.cbslocal.com/2011/12/26/several-fights-reported-at-mall-of-america/
While true that the internet is a big factor in the "death of the shopping mall", perhaps the collapsing economy has something to do with it.
It's interesting that so few make the connection.
The bias around here is that The Fed is distorting markets, so bad news must be the result of bad monetary policy. If not for Benny and the Ink Jets, we'd be happy campers.
In fact I suspect that Fed monetary policy is being used to plaster over some really bad -- I mean exceptionally bad, as in apocalyptic -- global economic conditions brought about by the ongoing train wreck that is peak oil.
In the middle of downtown Green Bay, Wisconsin, stands a huge mall... 'Port Plaza Mall' - right on the shore of the Fox River and within sight of Lambeau Field. Back in the day there were fashion shows, holiday events, mall walkers and loads of people from all age groups.
About 20 years ago, one by one, the stores started closing. No one thought much of it at the time: another would come in and take its place (the 'new' stores were always a tick less in quality than their predecessors). TPTB thought a name change would help ('Washington Commons' - very homey and community-sounding). Then an anchor store closed, storefronts stayed unoccupied, another anchor closed and the property was foreclosed on. Last I heard, they were either going to buldoze it and make a big park or it was going to be purchased by Schreiber Foods for construction of a corporate center. I'd prefer a park.
We're most certainly in the era of the death of the mall. There's a lot of reasons: bad economy, dumb kids, Internet, lazy shoppers, etc. Personally, I think we could use more parks. The Earth laughs in flowers.
Maybe the de-industrialization and off-shoring of the paper mills had something to do with it. I think most ot the stores moved to the 172-US41 area because of easier parking/access. It's like a mall, but you have to drive between stores instead of walk.
I don't shop at Sears anymore. Once while standing in the checkout line, the clerk only waited on people who were her own race. She ignored me and asked people standing in line behind me if they were ready. I finally had to go to another line to have my stuff rung up so that I could leave the store. I am white.
How it feels whitey? We be hasin Rs 40 acahs wit O-BA-MA! O-BA-MA! O-BA-MA!
keepsa tellin yos liberal friends to prove days not rayciss ana vote fo da rappa-in-chief!
I've been saying for years the next war in this country will be a civil war between liberals and conservatives. There is only so much Americans can take from a 'cultural-diversity' standpoint shoved down their throats along with reverse racism tactics like affirmative action before the rubber hits the road. Don't say you weren't warned.
I bet you subscribed to Ron "The Hatemonger" Paul's newsletters. Probably had a few Confederate flags strapped to a M1A with whistling Swastika LEDs instead of a Christmas tree. Even gave out spam for presents, didn't you? Admit it.
Giving Spam for Christmas is racist? What about canned beans is that Mexican nationalism? And is falafel mix as a stocking stuffer a terrorist act? I'm so confused...
Peggy Jospeh just called to remind you that while she's still happy that Obama is paying for her gas & mortgage, until he starts paying for her socket wrench kit she ain't goin to no Sears...
Wow, so many comments. The Sears incident happened 10+ years ago, not within Obama's reign, most likely Clinton era. Personally, I feel bad for society, people are just spouting the garbage that they hear. I agree with the comment below. Another Civil War, she is a coming.
This whole thing with Sears happened back in the Nixon era.
How anyone could think Obama is to blame is just stupid.
It's DICK'S fault.
You must be a fan of Zardoz:
http://www.youtube.com/watch?v=YOROvO2fxTc
Hadn't made the correlation......until now.
OH NO NOT THE "TRICKY DICK" AGAIN!!!!!!!!
At least you didn't say it was Bush's fault.
Seeing as how the Ghetto-fication of America is near complete and a coherent argument for a genuine threat being outside of US borders is failing so far, this would not surprise me at all. Except it'll be kinda sad when you realize these people can't articulate why or what they think is threatening them. Apparently your typical US persons have reached the breaking point of the confirmation bias. All it takes is one idea that is alien to them before they reach for the gun.
Some people would like to pull you down to their level rather than rise to yours.
Also, remember that to get respect you have to give respect.
I happened upon a scene in the parking lot of an older
harrowed looking angry white female, overweight, lumpous
skin texture from psychotic rage syndrome, being
overly snappy with a young black man from an auto
help service who had come to jump start her car.
Her psychotic rage felt the urge to share itself
when he told her she should have her car checked
out because for some reason the battery was going
dead. I couldn't help but feel she was tapped into
some undercurrent of thought that she was entitled
to abuse the negro because A. "this is the south"
B. the coming race war warrants it anyway.
That wasn't because he was black. It was because she was a bitch cunt. I worked in the auto service business and ran into the same thing. Someone's car breaks down and they get all upset, sometimes take it out on the mechanic. Happens all the time.
I also like the snobby ones who think because they wear a tie to work and never get their hands dirty they have the right to look down on the people who do the actual work.
One yuppy used to call every half hour to inquire after the "status" of his car. It was a Mazda, it didn't have any status. If he wanted status he should have bought a BMW ha ha ha ha ha ha ha. What a dipshit.
At some point consumer items will become unavailable because production will stop. I was putting together a tube type set amplifier last year and could not source the high voltage capacitors. Now these are not "common" consumer goods per say, but you can see where I'm going with this. This global economic rot has already killed off thousands of businesses and as it continues it may become harder to get things that we need for this modern life. Then the sheeple will be wide awake.
Dude- there is "common', and then there is "obscure".....
Read the post more carefully.......
Just like us ham radio people have to get most of our tubes from Russia. They're basically the only manufacturers of vacuum tubes now.
Stock up on 100 watt incandescent light bulbs. They'll make amazing future returns, done in dingy back alleys deals, on the black market, in an effort to avoid the eco-police.
By all means. go with the 19th century technology. You may also want to invest in the latest buggy whip while you're at it.
What are you talking about?
"Congressional negotiators struck a deal Thursday that overturns the new rules that were to have banned sales of traditional incandescent light bulbs beginning next year."
http://www.washingtontimes.com/news/2011/dec/16/congress-overturns-incan...
I hadn't realized they stripped the bill of that provision, hence the incandescent lightbulb faux pax.
But they will eventually do it, and sooner rather than later.
As far as the 19th century technology comment that was made, that's a fair statement, but I would be remiss not to mention that there is a qualitative difference between the light thrown off by CFC and incandescent bulbs, and the incandescent light is warmer and better for reading, IMO.
LED lighting is fantastic in certain applications, and LED technology is great in many respects (the bulbs last a long time, and are efficient).
But incandescent has a role that it fills that neither current CFC or LED lights can't duplicate in certain respects.
You don't really need any of that stuff, nor will you miss it.
At the end of this long journey awaits a healthy kind of simplicity where a shovel becomes the most valuable thing you own.
Stock up on 100 watt incandescent light bulbs
Yes... it was overturned...
But TIS "Speaks the Truth" here... STOCK UP!
...all of you bitchez who are stocking up on gold & silver bullion (not that that's bad), would probably calculate that the FIRST $1000 of your investment ought to go towards the likes of what TIS just mentioned...
Tampons bitchez!
And then, every bodies grid bias voltage goes west!
I can't 'prove it' but I think one reason - and only one reason - Sears has been and is going down the tubes is how they treat and pay their employees - abused employees have families who know of that abuse first hand.... and those family members WERE Sears customers... No company can continually shit on their employees and expect to keep their customer base...
And nobody here at ZH sees Wal Mart as, at least part of, the problem? I wish somebody would graph WM's rise in net worth and contrast it against the decline of the middle class. I suspect said graph would look similar to an X.
No. If Sears and K-Mart had kept in touch with their customer base, Wal-Mart would not have gained market share. There was a K-Mart close to my house before Wal-Mart took over. Every time I went to K-Mart to purchase an item, it was either a) out of stock or b) not stocked at all. Most of the time, I left K-Mart empty handed and hunted for a local speciality store to buy what I needed. At the time, K-Mart was considered to big to fail. The K-Mart management attitude was, " If we don't stock it, you don't need it."
There may be a correlation between Wal-Mart and the decline of the middle class, but that also coincides with the loss of manufacturing jobs and the open borders policies, like NAFTA.
Sears employees ... used to be considered quite famously privileged, several decades ago, as I remember.
In the old days Sears employees got shares of the company's stock ... which I recall hearing made some common old-time Sears employees millionaires ... but some of them still went to work every day because they loved working at Sears.
Quite something to see the great old business names go under ... history before our eyes ... I once visited an American who was in a grand old house built in the first decade of the 1900s I think ... the house, the whole house itself, came from a Sears catalogue.
When I was a kid there was a chain of stores called Kresge's. When they moved downscale they became K-mart.
+Folks around here remember reading the catalog in the outhouse before useing. Maybe it will be the same soon.
Sears has been behind the curve for years, even their sub. Land's End is cheapening its textiles with Chinese-cloth-stealing-sizing and really has to get into a Value-For-Money Mindset or go the way of all Degenerating Corporations focused simply on harvesting customers. You can only go so long running your franchise into the ground by milking customers for every last cent, but when they feel squeezed from all sides, they start turning on the most accessible group of larcenists and work up the chain.
The wonders of modern management......
But the Waterside Shops in Naples, Florida were quite crowded.
Yes, there are pockets of prosperity. And they are becoming conspicous. Country clubs, posh seasonal homes and lavish resorts will be needing increasing levels of security.
Sears is a REIT with retail bolted on.
If they are a REIT does that mean we should buy buy buy before they announce a secondary stock offering?
No supprise to me. They made a huge blunder. They closed thier paint department.
I have painted my Apartments with the same color of Sears Easy living for over 30 years. It makes it really easy to paint after a Tenant as you can just paint a wall or two and not have to paint the ceiling, doors and woodwork, as the paint always matched. I was shocked when I went to load up on more paint to find out they closed out their Paint department. I was so upset, I cannot even express the anger as now it will take me weeks and weeks to repaint everything with a new color from someone else.
Sears lost a lot of money on me. I would spend hundreds on paint, supplies and tools every year. Plus, other things while I was in the Store. I would when buying paint, buy tools for my Son and Son in Law for Christmas and their Birthdays. I now have not been in the store since I found out they do not sell their paint anymore.
Like Sears is a place to go for clothes or home appliances. Right. someone made a HUGE mistake.
Been dragged to K-Mart a few times over the years and I would say to myself every time “How do they even pay the electric bill – this store is empty”. There is plastic China crap as far as the eye can see and it is covered with dust … DUST. Wow they must really move the inventory ROFL. I predicted they would go under just from my observations. I can’t believe they made it this long, they’re a joke.
I agree many times I went into a Kmart and it was really dirty. Plus, I hate the Bathrooms ALL the way in the back. At least Walmart is smart having them at the front of the Store. A lot of times I come into the store and have to go to the bathroom. So, it is a bee line all the way in the back before I can even begin shopping.
The big box store = dinosaur
disposable income going down, down
Even Walmart facing margin compression
When Sears and KMart got married, it was a blend of two dying, diseased concepts that could not compete with Target and Walmart; the executive talent was piss-poor and totally out-of-touch.
Interesting. I view all those retailers as various forms of dinosaurs. And oddly enough, I don't see the online retailer being the next species to take over . I have been pondering this for some time and I am still looking for the answer.
Actually that above statement isn't totally true. I've realized for some time that retail isn't evolving as others think - going from brick and mortar to ecommerce. The truth is, retail is devolving and the traditional brick and mortar are the first casualties. Keep in mind that many of these brick and mortar stores have their own website to buy their products. Ecommerce isn't really the future. Ecommerce is simply the last gasp of breath of a devolving retail industry. The new trend of consumers of which the main stream is slowly realizing is the frugal consumer. Methods to get what you need at the lowest cost which includes avoiding various taxes and additional costs such as shipping. Other factors such as reduced manufacturing (less supply) is a symptom of that new reality. In addition to that is stagflation with relative deflation in most markets.
Sears will get a call from timmy -" you crossed the line, positive news only!"
"sales were not DOWN they were up, you dip wads"
"we told you ignore Sarbox, we will cya your ass"
Sears reply: "like you did MF, you Mother Fu##ers." "we arn't doing a corzine."
Another reason they are failing is that I tried on line shopping about 2 years ago. When they merged with Kmart. There are some clothes and slippers for around the house I like at Kmart. After selecting my order which took about an hour, when trying to check out thru pay pal the transaction would not go thru. It was so frustrating. I ended up having to call them and they had to enter each item into my order individually with their stock number. It took forever. Then when I got my order it came in dribbs and drabbs and some of the colors were wrong. The complete order was not filled some items they said were sold out. I bought many sets like pants and matching top. On many of the sets I bought I got the pants and not the top, or the top and not the pants.
I ended up having to go to the store to exchange or return the items that did not have a match to the set or try to find the same item and color I wanted in the store. Amazing, that I found in the Store after Christmas the sets and colors I wanted. What did they do? Send everything out of the Wearhouse before filling orders to the Store.
Now, I will not order on line thru them again.
this is such good news, why closing 100's of stores will add thousands to UE, which will quickly be adjusted for seasonal factors and UE will go down again in an orderly manner into an election.
This probably isn't good for Citibank who handles the Sears credit card.
Fuck Citibank and their Sears credit card! I feel better now.
This is just Anti-American propaganda. The good people in DC whose home values are rising say everything is just fine. They are creating jobs in DC so that proves the economy is on the upswing.
Spot on. The DC economy is totally decoupled from the rest of the US. The politicians talk like they see a recession. But no one there feels it...so they don't understand it. Only when someone stops lending them money will they understand. But apparently, since money can be printed infinitely, they will never understand.
On the bright side, at least our country has a ruling class again.