What recovery? U.S. retail stores now in grim death spiral- Sears and J.C. Penny's

January 21, 2014 – ECONOMY – Two of the largest retailers in America are steamrolling toward bankruptcy. Sears and J.C. Penney are both losing hundreds of millions of dollars each quarter, and both of them appear to be caught in the grip of a death spiral from which it will be impossible to escape.

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There are several other sources on the net that are basically saying the same thing. The face of America is changing and you have to wonder what some of the shopping malls will look like if they both do go out of business.

reply to post by 727Sky


There is no recovery.

Look around you whats changing, if everything looks the same as it did a few years ago then guess what, IT IS!!

Nothings changing.

reply to post by 727Sky


Sears never got marketing past the over 70 crowd and Pennys just couldn't define why you should shop there. Not to mention small ma and pa stores and the internet has put them in their death throngs. Our local closed Sears became a church that reached out to the homeless and that finished off the mall. More beggars staying warm than shoppers a couple of flash mobs trashed the place and THE END.

reply to post by 727Sky


Sears went down hill after they merged with K-Mart. Most thought the merger would be good for both (i.e. cheaper prices but Sears quality). Unfortunately, they got Sears prices and K-Mart quality. Craftsman tools were always the best but the big stores (Lowes & Home Depot) had the same quality, cheaper prices and more choices. The folks I know have stopped shopping at Sears as it's more convenient to buy tools at the other stores since they're already there buying other building supplies.

No business lasts forever, eventually they either get bought out by another company or they fail to evolve. I think Sears failed to evolve.

Not sure about JC Penny. Wife's not home or I'd ask her. She used to shop there but moved on to other stores. I think she might have mentioned quality but, again, I'm not 100% certain.

I think it's a far stretch to blame the gov't/Obama/Dems/Republicans for this. Consumers are the driving force and if they stopped shopping at your store, you either change or close.

There is no recovering. I actually watch Jim Cramer's Mad Money. That guy is straight shill and for the status quo. ALL of the major powers are cooking the books. USA, EU, Japan and China.

When the wheels finally fall of the bus, there is going to be hell to pay. In other news, Germany only got 5 tons of the 700 tons of gold they want repatriated.

reply to post by Feltrick


JC Penny had a series of mis-steps, the big one was removing coupons. Women Are Fleeing Coupon-Free J.C. Penney, New Poll Reveals The whole story is summed up here: The 5 Big Mistakes That Led To Ron Johnson's Ouster at JC Penney

It's not all doom and gloom. They're cutting 33 stores but The Biggest Turnaround Story In 2014 Will Be J.C. Penney

reply to post by ATSmediaPRO


That makes perfect sense, the consumers have spoken! My wife does most of her shopping at Kohls due mostly to the coupons/Kohl's cash and, in her opinion, better customer service and overall quality.

Again, if a company doesn't evolve or evolves in the wrong direction, they won't last.

Kmart should be on the list as well. Sears bought them, and is what i believe the cause of their downfall.

Walmart has a door greeter, that's gotta be the reason they can make it. Ok, maybe not.

It should be no surprise.

The Working Class has no money in it's pocket.

It can not buy goods.

So stores close.

Until the real Job Creators have a disposable income, there will be NO recovery.

BritofTexas
It should be no surprise.

The Working Class has no money in it's pocket.

It can not buy goods.

So stores close.

Until the real Job Creators have a disposable income, there will be NO recovery.

Well that is a good part of it.

You can also attribute it to buying inferior Chinese junk that needs replacing twice as often. (Conservative estimate)

shaneslaughta
Well that is a good part of it.
You can also attribute it to buying inferior Chinese junk that needs replacing twice as often. (Conservative estimate)

Which, of course, is one of the reasons why the Working Class has no money in it's pocket.

It's a vicious downward spiral that the general public are only now waking up to.

The biggest reason for the failure of the stores is everyone that shops there is older than 45. Young people get their appliances at Home Depot and Lowe's. They buy their electronics at Best Buy or online. Don't forget that stores like Walmart have grocery stores built into them as well. You go there for a gallon of milk and spent $40 while you're there for junk you don't need, mostly because it's convenient.

It's not about "people having no money." It's about a business model under stress. Sears and Penny's are two good examples of companies that have essentially made the wrong decisions and, for the most part, selling products anyone with any sense could get elsewhere cheaper. The J C Penny CEO screwed up, plain and simple, because he thought he knew better than anyone else. His "transformation" has nearly killed the brand. Now he's gone, and rightly so.

All the products of Sears and Penneys are made by someone else, and in the case of Sears targeted to a demographic that no longer exists. Why, then, should someone buy from them? It's easier and cheaper to buy via the Internet. Why buy an Amana refrigerator with a Sears nameplate on it when you can buy an Amana refrigerator with an Amana nameplate on it cheaper?What you are seeing is a transformation of retail from the mall to the laptop (or even the smartphone). This has little to do with a "lack of a recovery."

I don't have much sympathy for malls. They suck the life out of an area in the form of extremely high rents that make small stores impossible to compete. Malls wrecked downtown America. Maybe you are too young to remember, but it used to be that a shopping trip entailed taking a bus to the downtown core and shopping there, sometimes in stores that existed for 100 years. But then along came the Mall built outside of town on cheaper property, and it wasn't long before the downtown core was abandoned. Elegant hotels became flophouses. Once lofty department stores became empty shells or were rented by the Salvation Army. What was once a vital core of commerce was invaded by drugs and crime.

Requiem for the Mall? Hah! Good riddance! And as for the giant retailers failing; they're dinosaurs anyway. You are mistaking a change in commerce as a "lack of recovery," the usual ATS Doomsday Machine overreacting and getting it wrong once again.

reply to post by schuyler


So you used to walk downtown to get all your goodies, then it was around a mall, now it's to the other side of your bed to get on your laptop.

What's next?

Sounds like google-glass-like tech and beyond. No need to do anything but think and choose from the display thrown in your field of view ( or perhaps mind's eye )

Is that progress?

I used to think so. Now I see people idealizing objects instead of subjects, and that's a trend I'm not sure we really wanna follow through to the Nth degree.

reply to post by 727Sky


Al high street stores we're doomed the day the internet was invented.

How are non retail sales?

Sears and Pennys have been walking dead for at least 25 years now. Can't blame the current recovery, or lack thereof.

All of these box stores are essentially dead, dying or on life support.

The ironic thing about Sears and Penny's is they started as catalog based mail-order companies. The Amazon of their day. They should have been very adaptable to modern infrastructure but they made stupid decisions and ruined themselves.

Companies grew too big for their own good in the 80's and 90's and then while the "information age" grew they either refused to adapt or forced themselves into the new era with moronic proprietary restrictions or stupid pricing schemes.

The same will happen to Amazon, Google, Walmart, Target, etc... if they make the same poor decisions.

reply to post by shaneslaughta


It actually goes much deeper than that. I'm a pattern seeker and one of the things that I noticed was an increase in tearing across all price points. For instance, with jeans, you can be wearing a pair from Old Navy, JC Penney, Macy's, or Nordstrom and odds are, they're going to split and tear within 6 months. Part of the reason for the higher rates in deterioration of clothing are likely to do with the price of cotton skyrocketing and clothing manufacturers offsetting the increased cost to maintain profitability and revenues by using varying degrees of blends between synthetics and natural cotton. Cottons and linens in clothing are much hardier than their synthetic counterparts due to the cellulose within the plant materials. There are very few brands that actually are long wearing and those are very high priced ($250 and up). The point is, you can be shopping at Nordstrom and your clothes are still likely to tatter rapidly. For instance, I have several $200+ sweaters from 15 years ago (lol) from Nordstrom that are still in a great state; however, the $200+ sweater that I acquired a couple years ago "died" after one year and just a few wears.

I look at this as being potentially derived due to a. the increased price of higher quality materials, such as cotton, and b. perhaps a form of planned obsolescence. With revenues declining after the Financial Crisis of 2007/8, it's quite possible that manufacturers, in order to stimulate continued revenues and to offset the loss of profits, started cutting corners in both materials and production. By doing so, they would've been working to offset losses at the get-go and, with clothing wearing faster, that means continued revenues down the road, too. And if just about everybody is doing it, well, not a whole lot of room to move to a higher quality product especially if the "real" thing is decidedly out of one's price point.

People are surprisingly aware of this issue. I wrote a blog post on this subject a couple years ago and its had thousands and thousands of views. People can detect a problem when it's in their hot little hands.

I see no reason why Sears or JC Penney need to exist forever.


Sears just sucks.


In all honesty there are better stores for the same price.

Guess they're going the way of Mervyns, eh?

don't you find it funny that every western country has seen manufacturing closed and moved to third world countries to save costs. yes...profits for big business has grown but unemployment has increased and therefor sales drop. why did they not see this happening ??? it doesn't take brains to figure out that you need those workers earning $20 an hour in wages to buy your goods. you can send the jobs to india etc and only pay someone $3 an hour for the same job but your worker earning $20 an hour has now lost his job and is earning $0 and hour and cant afford to buy jack sh*t.

I don't know if anyone else saw this, but 2 weeks ago I saw workers in some third world country protesting over low wages. what did big business think, the workers wouldn't wake up and want a bigger slice of the pie???