Sears Layoffs, Losses, and the Kardashian Kollection
Sears's 2Q results are in, and they're brutal: much worse than analysts expected. The company's attempts to improve the bottom line—closing 29 stores, laying off 250—didn't get to the root of the problem for one analyst:
Credit Suisse retail analyst Gary Balter said in a research note after the earnings were posted: "Essentially, the message from consumers to Sears is: 'We will shop there, but not at the prices you wish to charge as we won't pay full price for substandard service and unwelcoming physical facilities.'"
One bright, or at least less dim spot, was the hiring of a new chief marketing officer:
"She's a hotter property than the recent CEO hire (Lou D'Ambrosio)," Swinand said of Woo. "So it's mildly encouraging that she's joined."
Sears Holdings has had trouble hiring executives since Lampert is seen as being difficult to work with and does not want to pay too much, Swinand said.
What are they pushing for the future?
Rather than invest in its stores, Sears Holdings has been focused on improving its online presence and creating brands, such as the Kardashian Kollection.
Online and the Kardashian Kollection intersect on this inexplicably laid-out page, which features oddly-framed thumbnails of the clothing, and if you figure out to roll over them, zoomable images—but no good, big full-length shots. And the clothes... well, "The Kardashian Kollection reminds me of Peggy Bundy" is the most precise review I've read. Come to think of it, it is pretty eerie:
Oddly enough that little blast of declined-Americana past makes me think that, for all the corporate turnover and economic turmoil, perhaps Sears's biggest problem is the death of the middle class:
If you live and work in the professional communities of Boston or Seattle or Washington, D.C., it is easy to forget that nationwide, even among people ages 25 to 34, college graduates make up only about 30 percent of the population. And it is easy to forget that a family income of $113,000 in 2009 would have put you in the 80th income percentile nationally. The true center of American society has always been its nonprofessionals—high-school graduates who didn’t go on to get a bachelor’s degree make up 58 percent of the adult population. And as manufacturing jobs and semiskilled office positions disappear, much of this vast, nonprofessional middle class is drifting downward.
When I was growing up, Sears was the one-stop shopping experience for the middle class: home appliances, tools, linens, and respectable suburban clothing, everything you needed to enter your respectable, long-term job, home-ownership years. As that class disappears along with its trappings—Dickies, Lee, Dockers, all products I own, and in one case am wearing as I write this—Sears is getting pinched by cheaper options like Wal-Mart on one side, and similar but more aspirational retailers like Target on the other.
Esquire's Ken Kurson laments the store's decline:
Sears Holdings is a bad team. It is a fatally wounded company whose stock — though still trading in the middle of its 52-week range — will not recover, and, as a result, this year is likely to spell the end to two great American institutions. This isn't Blockbuster or Borders going out of business, as jarring as those collapses have been. We're talking about Sears and Kmart — two stores that have defined what it means to be an American for more than 100 years each. And the shame of it is that the Oz behind the curtain, legendary investor Eddie Lampert, never really seemed to care.
One complaint I keep hearing is that Sears doesn't really have an identity any more, and signing up famous-for-being-famous reality stars reflects a desperate search for it. But maybe it's not Sears that lost it's identity—maybe it's those of us who use to be in its target audience.