Sears Holdings says Kmart is being transformed, not closing doors

Discussion
Photo: Sears Holdings
Jul 27, 2016
George Anderson

You may have seen recent reports that associates at Kmart stores believe their stores are being phased out as part of a larger plan by parent company Sears Holdings to shutter the chain. Sears Holdings has denied the report, insisting that it is in the process of transforming Kmart from a traditional brick and mortar chain to a new type of retailer.

According to the reports, Kmart associates have been spooked by the chain’s decision to move inventory from its backrooms to store shelves. Associates see this as another sign that its parent company is unwilling to make the necessary investments (see lack of remodels) to put stores in a position to achieve success.

Sears Holdings responded to the reported concerns with the following statement to the Consumerist: “Store associates are currently rolling out a phased project that gets our newly-delivered products on the stores’ shelves immediately rather than in the stock rooms and ensuring that the member does not wait in line at the checkout.”

Part of its response to TWICE on the same subject included the following: “The goal is for our stores to operate more efficiently, deliver improved customer service by enabling our associates to spend more time on the sales floor assisting members and customers, and to drive increased margins.”

Sears Holdings claims that Kmart associates are finding that the inventory flow change is making their jobs easier and opening up time to better meet the needs of customers. Management has said it will work on the chain’s internal communications to keep associates in its 900-plus stores better informed.

DISCUSSION QUESTIONS: Do you see Kmart’s plan to move inventory straight to the sales floor instead of being held in the backroom as a sign the company is focused on transformation? Will this enable associates to better serve the needs of customers?

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Braintrust
"Does anybody really believe that some kind of "transformation" is even possible?"
"Pretty amazing that Kmart just heard about ECR."
"All evidence points to Kmart staying open only as long as it is profitable for its inscrutable chairman..."

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16 Comments on "Sears Holdings says Kmart is being transformed, not closing doors"


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Tom Redd
Guest

For Kmart this is a major move. For any retailer it is a smart move. The game is inventory in 2017 and making what is available visible to the shopper is smart. Many stores have loads of their number one asset stuck in the back rooms and some associates hate having to go find stuff.

Go Kmart! Just get some better store locations and change the logo …

Max Goldberg
Guest

Why do Kmart and Sears still exist? At least Sears has some iconic brands. Kmart became irrelevant years ago. This latest step just prolongs the inevitable.

Dick Seesel
BrainTrust

Is there anything wrong with figuring out how to get goods to the selling floor faster and more efficiently? Of course not.

That being said, does anybody really believe — over a dozen years since Lampert bought Kmart before adding Sears — that some kind of “transformation” is even possible? We’ve heard this kind of language many times over the years, most recently around the “membership model.” Meanwhile, the results continue in a downward spiral.

Tony Orlando
BrainTrust

Kmart lost the battle years ago, and the stores I have been in are in bad shape. Our local Super Kmart is closing this week and there’s not a whimper from the community, as Walmart and Aldi absorbed the customers quickly. There will be more closings of giant retail stores in the future as online sales continue to increase while brick-and-mortar stores are declining, so it is just a matter of time. Change has its winners and losers, and Kmart is not winning.

David Livingston
Guest
2 years 11 months ago

I tell my clients the one thing worse than being next to a closed Kmart is being next to one that is still open.

Chris Petersen, PhD.
BrainTrust

Kmart’s plan to move inventory straight to the sales floor instead of the backroom is a sign of omnichannel capabilities. It can reduce stock and increase inventory turns.

The only true sign that Kmart is being transformed is evidence of Sears Holdings investing to drive more foot traffic through Kmart’s doors. Staff spending more time on the floor could increase sales conversion, but Kmart must first be transformed to get the customers through the doors.

Just because inventory is visible and staff are standing in the aisles does not mean customers will suddenly walk through the door.

David Livingston
Guest
2 years 11 months ago

I was trying to imagine what it would be like to be a manager or executive at Kmart and having someone ask you what you do for a living. Or if you can look someone in the eye and tell them Kmart is sincere in their latest press release. Kmart always says they are transforming and not closing (yet there is never any transforming and stores quietly are closing). I have no idea now where the nearest open Kmart is. The very best Kmart stores do about the same volume as the very worst Walmarts. Keep in mind Kmart, like any other retailer, has to carefully word their press releases. They can’t just come out and say they are shutting down. Otherwise the few employees they have left would be walking out the door. The questions proposed about transforming and servicing the customer are not even relevant. I agree with the employees, they are shutting down.

Dr. Stephen Needel
BrainTrust

Add my voice to those asking why KMart still exists. As a researcher, I’m curious as to whether they tested this first to see if it was effective or if they just rolled it out.

Ed Rosenbaum
BrainTrust

Is anyone going to miss Kmart? Does anyone really know they are still open? Why are they still holding on? Even the straw they are holding onto is tired and ready to crumble. Move on. Close and sell off the real estate if they own any. Even the competition does not think they are a competitor.

Cathy Hotka
BrainTrust

All evidence points to Kmart staying open only as long as it is profitable for its inscrutable chairman, who has been systematically dismantling portions of the company. I would doubt that anyone in this community would place bets on the long-term survival of Kmart.

Kai Clarke
BrainTrust

Inventory, turns, out-of-stocks. These are key factors in any retailers assessment. Whether they will impact the remaining Kmart stores undergoing this transformation is a good question. Perhaps the real question is, what is happening to the Kmart consumer and what do they think about this?

Karen McNeely
Guest

Sorry, I thought they were transitioning Kmart into At Home stores. I’ve not been inside of one, but it seems to be a much more relevant and profitable format.

Dan Raftery
Guest

Pretty amazing that Kmart just heard about ECR.

PJ Walker
Guest

There is a bigger issue with Kmart — it no longer has an identity. What type of retailer is Kmart? Kmart does not stand out from the crowd the way Family Dollar or Big Lots does and has absolutely no personality. Look at Five Below, they have established themselves as a teen specialty discount retailer. Kmart is doomed unless they can invent or carve out a niche and fully commit to it in branding, inventory and service.

Craig Sundstrom
Guest

I interpret it as them having so little inventory it makes no sense to try to store it, or maybe it’s something else … but really, who knows or cares?

Tom Dougherty
BrainTrust

Kmart needs transformation.Their market position is so unclear that it is not just brand strategists like myself that have trouble placing them, consumers have the same issues. Kmart has almost no relevant brand meaning. However, I have little confidence that the Sears Holding company is going to figure this out.

I say this because Sears has the exact same problem.

The problem is not an inability of sales associates to meet consumer needs, the REAL problem is that the consumer does not know WHO they are and why they are important. Both retailers need to re-brand. No makeover of ops will save them from an aging focus and a grouping of dusty brands.

wpDiscuz
Braintrust
"Does anybody really believe that some kind of "transformation" is even possible?"
"Pretty amazing that Kmart just heard about ECR."
"All evidence points to Kmart staying open only as long as it is profitable for its inscrutable chairman..."

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