(Author’s note: This is an update of an earlier Forbes.com story on the remaining store count at Transformco, the parent company of Sears and Kmart. The earlier story used incorrect information to arrive at a total number of stores that remain open and this story provides a more accurate count though the company itself continues to decline providing information.)
The number of Sears and Kmart stores that remain in business could be more than 10% less than the last numbers issued by their parent company, Transformco.
What’s more, a large percentage of Sears stores have not reopened following the coronavirus shutdown. Given the company’s previous aggressive policy of closing stores it raises the question of whether it has plans to permanently shut down those locations.
Using information supplied by the Sears.com website, Google Maps searches of all 50 states (as well as U.S. territories) and phone calls to all locations indicated on the map search, research found 118 Sears stores that appear to be remaining in business, at least to the point where their phones are being answered by automatic answering systems.
Transformco, in its most recent statement on store reopenings, lists 40 locations that have reopened as of June 1, which would indicate that as many as 78 full-line Sears stores have not reopened yet. Sears was among the last general merchandise retailers to shut its stores and has been one of the slower national chains to announce reopenings.
The store locator tool on the Sears.com website shows just 50 remaining Kmart locations but two independent sources who monitor the count and provided lists but wished to remain unidentified, say it is less, as low as 43.
That total of 161 (using the lower Kmart estimate) places the count at just over 11% lower than the last update issued by Transformco, the privately held company run by Eddie Lampert that bought the remnants of Sears Holdings out of bankruptcy court last year. In a statement in November 2019 the company said it was closing 96 stores which would leave it with 182 although it did not give a nameplate breakout.
A Sears spokesman, when asked to comment, said to refer to the November statement and that the company would have no further comment beyond that.
The full-line stores don’t tell the whole story for Sears, however. Last October Transformco bought the remaining portion of an allied retail operation called Sears Hometown and Outlet Stores that it didn’t already own and folded those stores into its overall holdings. At the time of the purchase, there were estimated to be 491 Hometown stores, which essentially sell major appliances and tools, as well as 126 Outlet locations, selling primarily close-out hard goods like appliances, lawn and garden and home repair merchandise.
The website store locator shows 323 locations identified as Hometown stores, as well as other stores that are called outlets, repair drop-off points and auto centers. Online searches and phone calls were not made to corroborate the store locator count but this would seem to indicate there are 168 fewer Hometown stores now than there were at the time of the acquisition last fall. A spokesperson for Sears Hometown did not respond to an inquiry on this.
The remaining Kmart location are clustered in isolated locations with about 25 in just five states: California, Florida, New Jersey, New York and Pennsylvania. And 11 are in U.S. territories: Puerto Rico, the Virgin Islands and Guam. Michigan, the original home of Kmart, has one remaining store.
More than two-thirds of the states in the country have no Kmarts. For a chain that was once the largest retailer in the country with close to 2500 stores as recently as 1994 it a shocking comedown.
The Sears decline is no less so. It was also once the largest retailer in the country and even when it filed bankruptcy in 2018 it continued to operate more than 700 stores. According to this research there are now 19 states without a Sears stores and the ones that are left are centered in what seems to be a random pattern. California, Texas and Florida have multiple locations but other big population states like New York have relatively few and even Illinois, where the company has been headquartered for its entire existence, has just three remaining full-line Sears locations.
When Lampert purchased the Sears and Kmart assets out of bankruptcy court – a place he took them while serving as CEO of the predecessor Sears Holdings – he said he remained confident that he could save the company, its more than 400 stores and its 45,000 jobs at the time. As recently as the last store closing announcement in November, 2019 the company said, “We will endeavor to create and deliver value through a strategic combination of our better performing retail stores and our service businesses, brands and other assets, and expect to realize a significant return on our extensive portfolio of owned and leased real estate.”
Since that time it has sold a number of assets, including its Innovel logistics company earlier this year to Costco as well as its Die-Hard automotive brand to Advanced Auto.
“We will continue to evaluate our Sears and Kmart footprint, consistent with our overall retail and service strategy,” the company said at the time.
Whether the pandemic will hasten the store closing process remains to be seen. Lampert has often blamed the poor performance of the company on outside factors and not its own strategy and execution of that strategy. But certainly the crisis is not helping the company’s fortunes. “Sears is in a very dangerous position,” Neil Saunders, managing director at GlobalData Retail told CNN last month. “Before the crisis hit, the consumer economy was robust. Even during those times Sears wasn’t doing particularly well, and things will be tougher going forward.”
Sears has continued to defy the critics who have predicted its demise time and time again. It has weathered poor management, bad merchandising and a financial structure that seemed to unduly benefit its owners rather than shareholders, employees or, most importantly, its customers. But the coronavirus pandemic may be the one thing it will ultimately not be able to survive.