Is Sears going out of business in 2023 – reasons why they closing stores?

Is Sears going out of business in 2023

Sears’ long-promised demise has been taking place quietly for years. Also, there are no indicators that it will ever end. The namesake franchise is already down to only a dozen locations nationwide, but others need help. The final U.S. sites of the franchise-owned chain Sears Hometown Stores Inc., part of the Sears family, are currently preparing to close.

For the business, things sometimes appeared to be hopeless. Sears previously held the title of the largest retailer. It was with revenues in the billions of dollars since its official founding in 1893. With its offices in the Sears Tower, once the highest structure in the world, Sears had a significant global impact.

However, one of the most famous department store chains in the United States has fallen victim to changing consumer preferences and the retail environment.

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Why was Sears discontinued?

Is Sears going out of business in 2023

The legendary chain Sears has died a silent, protracted death. Once upon a time, Sears was both the Amazon (AMZN) and the Walmart of its era. It was due to its ground-breaking portfolio and anchor position in numerous national malls.

More than 3,500 US stores and more than 300,000 employees made up Sears and Kmart during their merger in 2005. However, both businesses were already on the decline. Instead of engaging in-store upgrades to make them competitive, the company focused on selling off its more desirable real estate. They also bought back stock after the merger to maintain its falling share price.

The business had declared bankruptcy by 2018. Early in January 2019, Eddie Lampert, the CEO of the holding company and the fund manager who arranged the fatal Kmart merger, acquired the company’s remaining assets. After it had gotten rid of a lot of its debt, underperforming stores, and less desirable leases, he had planned to turn things around.

With the overly hopeful name Transformco, the firm that filed for bankruptcy at the beginning of 2019 held 223 Sears and 202 Kmart locations across the country. However, less than four years later, it is struggling to hold on, as evidenced by the tiny brick-and-mortar footprint and lack of customers.

There has already been a significant reduction at Sears Hometown. “Approximately 100 sites would be permanently closing in the coming weeks,” it was stated back in May 2022, according to CNN. The news source claims that the summer closings were posted on the Facebook pages of each independent store. The shuttered sites were dispersed throughout 30 different states.

“We regret to inform you that our Sears Hometown Store will be closed. We did not arrive at this conclusion quickly”. “Over the past ten years, we have enjoyed every moment we have had the opportunity to spend with you.” The Luling, Louisiana, restaurant shut down in June, wrote on Facebook.

As of 2019, 750 Sears Hometown stores were left across the country. However, according to CNN, the most recent round of closures accounted for “nearly half” of the chain’s existing storage space. The second half is currently being considered for removal.

Is Sears hometown going out of business?

Is Sears going out of business in 2023

As part of the well-known department store, Sears Hometown sells products such as lawn and garden tools, appliances, and other items. According to Bloomberg, to boost income for its ailing mother company, Sears broke off its Hometown division in 2012. According to the source, that didn’t work out as expected, as Sears Hometown Stores Inc. declared bankruptcy on December 12.

On December 13, GlobalData Retail’s managing director, Neil Saunders, informed clients in a note. He said that Sears Hometown previously had a higher likelihood of surviving than Sears Corporate. According to CNN, this is because the smaller chain’s size was “more ideal than the large department stores.”

In contrast, Saunders noted that “it has followed the same pattern of persistent decline.” This has been the trademark of Sears, with hundreds of locations closing earlier in 2021. The advantages of having access to distinctive goods and private-label products have also been lost. It is due to the sale of the different brands that Sears had controlled and the resulting increase in their distribution across retail.

According to CNN, Sears Hometown’s bankruptcy filing includes debts of at least $50 million and less than $50 million holdings. 115 Sears Hometown stores are currently holding liquidation discounts, according to a press release from December 23.

Although the shutdown would affect 36 states and Puerto Rico, certain regions would be more negatively impacted than others. Given that 12 Hometown Sears stores in Arkansas already have closing sales, Arkansas is likely to lose the most stores. With eight and six locations getting closed in each of the two states, respectively, Texas and California are also at the top of the list.

Is Sears still in business in 2023?

The 130 locations are still listed on Sears Hometown’s store finder. Thus, just the 115 locations scheduled for closure appear to represent the chain’s remaining retail stores. The homepage of the business’s website features a giant banner stating, “All Sears Hometown Stores from across the nation will be closing their doors!”

This has also been verified in certain places. The Sears Hometown store in South Williamson, Kentucky, was announced on Facebook on December 19. It had received word from corporate that it, along with all other Hometown Stores across the country, would be closing. 

Similar comments were expressed by Mark Minuti, a lawyer representing Sears Hometown, at the first bankruptcy hearing for the business. According to Bloomberg, Minuti stated, “What is occurring here is that this firm is closing its doors.” “There is no doubt that today is a sad day for our firm.”

Best Life has contacted Sears for further information regarding the widespread Sears Hometown store closures. But it has yet to receive a response.

Conclusion

Cohen said it doesn’t matter when Sears might finally close the last few stores. He referred to 2005, the year Lampert took over management of the business, as “the season of death.”

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