No, I’m not picking on them, but I can’t resist commenting on Sears.
It hasn’t been called Sears, Roebuck and Co. in years; in case you hadn’t noticed, it is now SHLD – Sears Holdings. The “Holdings” part includes another brilliant retail attraction, Kmart Stores, formerly known – many years ago – as S.S. Kresge.
You only have to read the headlines in the financial sections of the national newspapers: from The New York Times – “Sears Posts Worst Report of a Bad Lot In Retailing” – and from The Wall Street Journal – “Reading a Sears Catalog of Worry.”
In case your had any doubt, the Times article continued with, “The slide continued on Thursday for the deeply troubled Sears Holdings, whose dismal earnings report not only lacked signs of improvement but also laid bare how few options the company had left.”
Among the losers in the lower-end retail market, Sears took first – worst – place. J.C. Penney Co. hasn’t been faring much better, at least if you think the stock price is a real-world indicator. Both SHLD and JCP have lost half their value in the past year.
I have followed both Sears and J.C. Penney for the past 40-plus years, and there has been one persistent theme in analysts’ outlooks – not all of them all the time, but often enough to call it a pattern: no matter how bad the earnings, or rather, losses, some analysts have predicted a turnaround for the next year.
I should note that, briefly, I sort of worked for Sears about 20 years ago. I was working as a broker for Dean Witter when they opened an office in Fairfield, and we believed that we were working for a strong, progressive company when it was acquired by Sears.
I guess the motivation for Sears’ financial industry expansion was their longtime ownership of Allstate Insurance. Hey, if we can make money in insurance, why not in stocks and bonds?
That was more than 20 years ago, and it has been downhill, for the most part, ever since.
As many of you know, Sears not only did well with Allstate over the years, but their Craftsman brand of tools was one of the most respected in the industry. I would only exaggerate a little if I said that most American households owned at least one Craftsman tool.
Sadly, the profitability and esteem Sears had gained with Craftsman – and Allstate – did not carry over into their clothing business.
It seemed they couldn’t decide whether they were a low-end Macy’s or an upscale Kmart, and it turned out that the confusion spread to their customer base, as well. But their lackluster performance was not on the horizon when Sears opened its anchor store at our own Solano mall. Sears and J.C. Penney: A perfect pair for working-class shoppers.
You might say that fortune turned its back on Sears, since it was a really decent store, and there was no question that in such departments as tools and work clothes, it was virtually unbeatable. If you looked at the retailing ladder years ago, Sears looked up to Macy’s, but looked down on Kresge (Kmart), F.W. Woolworth, W.T. Grant,and, yes, J.C. Penney.
Sadly, that once mighty chain of stores hasn’t held its place on the shopping ladder for a long time.
Bud Stevenson, a retired stockbroker, lives in Fairfield. Reach him at [email protected]