The 56-year-old executive took over the helm in 2015 and focused the Texas-based company on presentation at the store, supply-chain efficiency and appealing to its frugal base. JCPenney is expecting to turn a profit next year for the first time since 2010 - in part because of Ellison, a former Home Depot executive, and his vision. “I am actually shocked they have survived this long.” “It’s a dire future for Sears on the horizon,” Vyas said. In May, Sears announced it would seek buyers for its Kenmore appliance and Craftsman tool brand, two of its most enduring products. The brightest spot has been their Craftsman tools line and the chain remains a leader in appliance sales, although JCPenney is attempting to chip into that market. “It was a place for the family to get together.”īrian Hanover, a Sears spokesman, repeated what has become Lampert’s mantra, Sears Holdings “is committed to returning the company to profitability” and has a number of initiatives to increase revenues. “Sears used to be a cultural event,” said Leon Nicholas, an analyst at Kantar Retail. Fitch estimates its raised $4.7 billion from real estate transactions, but it still expects the company to burn through as much as $1.8 billion this year to keep operating. To keep it above water, Lampert sold off its valuable real estate. Sears has lost more than 90 percent of its value since 2007 and is mired in debt.
He focused on slashing costs and moved away from the Sears long-recognized emphasis on customer service.īut he failed. He put hedge-fund managers in charge of the retail business and took a hands-on approach. When billionaire investor Lampert took over the company, he thought he could turn around its sagging performance. “But you weren’t talking about one time customers, you were talking about generations.” “So, when it kicked in, it costs Sears customers,” he said.
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“It was an identity that the company had for 90 plus years. “The cultural identity of Sears was literally destroyed with the merger of Kmart,” said Nick Vyas, head of USC’s Center for Global Supply Chain Management and a former executive at Sears before Lampert took over.
Most analysts predict the company’s demise and pin much of the blame squarely on hedge-fund CEO Eddie Lampert, who as chairman of Kmart Holding Company struck an $11 billion deal to create the Sears Holding Company in 2004. Sears has been on a long free-fall, closing hundreds of stores, firing thousands and losing billions over the past decade. “It used to be like Hollywood and Vine or Grand Central Station during Christmas time,” said Morgan, who fondly recalls gathering there during Christmas in the 1950s, particularly the toy train that once ran along its roof. “It’s empty now,” said Michael Morgan, a 65-year-old local historian.
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The the tall, old-fashioned, display-friendly windows that once wooed passers-by to peek inside have been covered up and the aisles at the store were a ghost town during a weekday in late November. “The world of retailing has changed, and to date, neither has done a very good job of adjusting.”Īt Sears’ first custom-built store in Glendale, there are still hints of brighter days.Ī wide-rimmed stair well leads up to showrooms built in 1935. “Sears and JC Penney have similar issues,” said Ira Kalb, professor at USC Marshall School of Business. Regardless of how they fare, some analysts see the fates of the two consumer stalwarts as tied, two legacy companies choosing divergent paths to an uncertain future.
The sales bump came on the heels on a three-year period that saw the chain close more than 80 stores. “We felt it was important to enter this appliance business in a meaningful way going into key holiday selling periods.” “We literally touched and rearranged one half of our stores to accomplish this reset, ” CEO Marvin Ellison told investors last month. The company rushed to open up 500 new appliance showrooms by October, which it said help raise sales 2 percent that month. It’s even gambled by returning major appliances to the sales floor. Once at death’s door, JCP is scrapping head-to-head with Sears for the admittedly shrinking mid-level, bricks-and-mortar market with assertively marketed doorbusters and a strong connection between its websites and its mall stores. Casting aside the trendy designs and one-price-fits-all strategy of former CEO Ron Johnson, JCP appears to have reconnected with its mid-level market after years in decline.
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