Experts: Kmart Not Long for This World
By George Anderson
There’s a scene in Monty Python and The Holy Grail where a cart is pushed through a village carrying people who have died. The cart-master calls out, “Bring out your dead!” as they move through the village.
A villager carrying an old man approaches the cart-master and says he has a dead person for the cart. The old man being carried has another assessment of his deadness, protesting, “I’m not dead!” and “I’m getting better.”
For many retail watchers, the scene played out in this movie has a striking similarity to what has been happening at Kmart.
Despite the protests of the old man to the contrary, it wasn’t long before the lure of money from another source (the villager carrying the soon-to-be-deceased) was enough for the cart-master to hit the old timer over the head with a club and add him to the pile of former people already there.
Since the merger last year with Kmart, the retail chain has made numerous announcements about its impending comeback with little evidence to support it. Now, many wonder, how long will it be before its cart-master (AKA Edward Lampert, chairman of Sears Holdings) shuts off the lights once and for all.
Howard Davidowitz, chairman of Davidowitz & Associates, told The Detroit News, “The Kmart brand name is gone. If you were going to keep a brand, you wouldn’t be closing more stores. (Sears) is going to milk this brand for everything that it’s worth, and then it’s going to disappear.”
“It’s never been about driving customers,” Mr. Davidowitz added. “This is about realizing cash from a cadaver and getting the most from your assets. As far as a retail entity … it’s looking like a failed retail enterprise that can never compete on the retail battlefield.”
In September, Mr. Lampert issued a statement concerning the approach the company intended to take with Kmart and Sears. “We intend to build on the historic strengths of both companies, while overcoming some of the more recent weaknesses.”
While a small number of Kmarts around the country are testing the sale of Sears branded products, such as Craftsman and Kenmore, in stores, no Sears locations have taken on Kmart exclusive brands, such as Martha Stewart Everyday, a year after the merger between the two struggling retailers was completed.
Credit Suisse First Boston analyst Gary Balter recently wrote that the lack of customer traffic at many Sears Holdings locations is setting the stage for “major real estate sale.”
“Bring out your dead.”
Moderator’s Comment: Are Kmart and Sears beyond the point of reviving? What would it take to keep them from following Two Guys, Alexander’s, Bradlees,
etc. into the place where defunct retailers go?
Ulysses Yannas, an analyst with Buckman, Buckman & Reid, thinks it will take topnotch people to get Kmart and Sears turned around.
As for his assessment of the people currently attempting that, “I don’t think they have the right people in place to improve a tough situation.”
George Anderson – Moderator
- Marriage of faded icons may spell end of Kmart – The Detroit News
- Bring Out Your Dead – Monty Python’s Completely Useless Web Site