Could this finally be Sears’ last Black Friday?

By Chris Isidore

Sears, once America’s largest and most important retailer, could very be going into its last Christmas shopping season.

The Sears chain had 2,000 stores as recently as 20 years ago and more than 200 stores when it emerged from bankruptcy in 2019. Now it has just five, after three more closings this past year.

One standalone store in Coral Gables, Florida, could be torn down to build 1,000 housing units. Another four operate in malls – in Braintree, Massachusetts; Concord, California; El Paso, Texas; and Orlando Florida. All those malls are owned by Simon Property Group, the nation’s largest mall operator.

The company, once the Walmart and Amazon of its day, helped change America, from how people shopped to where they lived and more. Now the once-proud chain is in a precarious position; by next year’s holiday season, it could finally be gone.

Neither Simon nor Sears ownership responded to a request for comment, and the owner of the Florida property declined to comment.

The five remaining stores are unlikely to revive Sears, experts told CNN.

“They’re phantoms in the night presently,” said Mark Cohen, a former Sears Canada executive who was formerly head of retail studies at Columbia University. “Someone unlocks the door in the morning and locks it at night, but there’s actually nothing to sell in the stores.”

Sears’ death spiral

There is no chance the remaining stores are profitable, said Neil Saunders, managing director of retail for research firm GlobalData.

“Sears wasn’t profitable back in the day when it was a much bigger company with buying power,” he said. “The idea it is profitable with just a small number of stores is for the birds.”

Saunders and Cohen both said it’s also possible that Sears’ owner Eddie Lampert is simply keeping the remaining stores open to book accounting losses for tax purposes.

Alternatively, store leases might be hard (and costly) to break, or maybe another real estate issue at play, Saunders said.

Neither Saunders nor Cohen see a future for the store.

“If you’re in retail and you’re trying to sell something nobody wants to buy anymore, like electric typewriters or video tapes, you’re in a world of hurt,” said Cohen, who blames Lampert for the store’s current state. “But customers didn’t stop buying circular saws or screwdrivers and hammers or appliances. If you’re in retail and you sell things people want to buy, your success or failure is entirely based upon what kind of skill you bring to the table. He had none.”

Lampert, a hedge fund operator, bought the company in 2005 and merged it with Kmart, only to oversee its spiral into bankruptcy in 2018. He then bought the remains of the company once more out of bankruptcy early the following year with promises to turn it around.

How Sears changed America

Sears was created when founder Richard Sears, a railroad station agent, started selling watches as a side business in 1886. He and watchmaker partner Alvah Roebuck incorporated the company as Sears Roebuck in 1893. It grew to be not only the country’s largest retailer but also its biggest employer.

Its groundbreaking catalog brought manufactured goods into homes of a mainly rural America in the early 20th century, ending the need for many to make their own clothing, furniture and other household items, and creating demands for goods produced in America’s growing factories and cities. It opened its first store in 1925 and soon was such a dominant retailer that many traditional mom-and-pop stores in downtowns across the country were forced out of business.

It helped to bring items such as appliances and other labor-saving devices into American households, which helped women pursue jobs outside the home. When suburbs boomed after World War II, Sears became a key anchor in malls that helped give rise to many communities.

By the 1990s, the company said that one out of seven Americans either worked for Sears or had once worked there – many of those jobs with health care and pension benefits.

It created top-quality brands such as Kenmore appliances, Craftsman tools and Die-Hard batteries. It built what was then the world’s tallest building in Chicago to serve as its headquarters in the early 1970s. And it also branched into other fields, creating Allstate Insurance in 1931, and purchased both the Dean Witter brokerage firm and Coldwell Banker real estate firm in 1981. It teamed up with IBM to form Prodigy, one of the very first internet services, in 1984 and created the Discover credit card in 1985.

The rise of discounters like Walmart (WMT) and big box stores like Home Depot (HD) hurt, as did the onset of online shopping. Sears management also failed to make the rest of its merchandise as popular as its appliances and power tools. It lost its 75-year-old place on the Dow Jones industrial average, a benchmark of some of the nation’s most important companies, to Home Depot in 1999.

Sears’ final demise

In 2005 Lampert, who had already bought Kmart out of bankruptcy, bought Sears and merged them into one company, Sears Holdings, with a combined 3,500 US stores and more than 300,000 employees. But both brands were already in a downward spiral.

After the merger the company concentrated on selling off its more attractive real estate and buying back stock to prop up its declining share price, rather than investing in modernizing stores to make them competitive.

But losses piled up, and by 2018 the company had filed for bankruptcy.

The company that emerged from bankruptcy in early 2019 owned 223 Sears and 202 Kmart stores nationwide. But less than less than seven years later, it is barely on life support.

The last full-line Kmart store in the mainland United States closed in Bridgehampton, New York a little more than a year ago.

Sears could soon be next, Cohen said. “There’s no future.”