Fate of local Sears, Kmarts still undecided
While the Sears store in the Tacoma Mall and the Kmart on Tacoma's Sixth Avenue and 72nd Street, as well as the Kmart in Lakewood, aren't listed in the initial roster of stores around the country slated for closure, more cuts are on the horizon as the retailer's parent company seeks to control costs and lagging sales.
Illinois-based Sears Holdings Co., which operates the Kmart and Sears chains, announced plans in late December to close some 120 stores in 2012 after posting dismal holiday losses and lagging year-over-year sales. It followed that announcement with its initial list of 79 stores set for closure. While none of those stores were located in Pierce County, the company is set to cut another 38 Kmart and 41 Sears stores later this year. The total list of closures around the nation will be between 100 and 120 stores as the 3,500-store retailer continues to lose customers to Costco, Walmart and Target.
The only stores in Washington slated for closure so far are the Kmart on Lacey’s Martin Way and a Sears in Walla Walla.
"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 in a financial release.
Same-store sales fell 3.6 percent at Sears and .7 percent at Kmart stores around the nation last year, which followed combined sales drops of 5.1 percent in 2009 and 8 percent in 2008. Net sales dropped more than $10 billion in recent years to $43 billion last year compared to $53 billion in 2006. Those declines came while other big-box retailers were expanding, particularly in the Pacific Northwest.
The Sears and Kmart store closures will generate $140 million to $170 million through the sale of the properties and the inventory within those stores and through savings of under-performing stores.
"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," the release stated. "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."
By many accounts, that puts the Tacoma stores in the crosshairs for possible closure, since Tacoma has two Kmarts and the Tacoma Mall Sears is surrounded by higher-trafficked competitors, although that location is considered a "broadline" store since it has tire and automotive branches alongside its general retail products.
Sears Holdings ranked as the largest retailer in the nation just a generation ago. It now has plummeted to ninth. Seen once as a retail innovator, with its legendary, all-inclusive catalogs and its no-questions-asked replacement policy on its signature Craftsman tools, the retailer just hasn't changed with the times and customer expectations.
One of those former Sears customers is Lawrence Huffines, the Tacoma-based celebrity handyman. Huffines was featured on the HGTV show "All American Handyman" and is a regular on King 5's "New Day" morning show. Craftsman tools, he noted, were the gold standard for carpenters and contractors for decades, but that standing has changed because other tool makers, namely Makita and Dewalt, innovated with consumer-quality lines while Craftsman stayed high-brow.
"Sears makes the coolest compound miter saw I have ever seen," Huffines said. "But beyond that, I don't see why anyone else would go there."
He equates it to the former Tacoma mantra of "America's #1 Wired City" from a few years ago. That slogan rolled out right as the rest of the nation was already going wireless, making the wires obsolete. Craftsman tools largely still require cords because of their higher power requirements, while regular consumers simply wanted the convenience of battery-powered tools.
"Every dad in America got a cordless drill for Christmas in the last five years," he said, adding that Craftsman had introduced its consumer, cordless lines years after the market was already saturated with competitor options. "I think they are just too late to the scene."
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