Sears in Danger

[nissangirl74]

http://beta.fool.com/johnnytrader23/201 ... lnk0000001

"It's been a terrible year for multinational department store Sears (NASDAQ: SHLD). Among all department store public companies in America, Sears not only had the worst-performing stock in the past 12 months, it was the only one that actually produced negative returns: down 13.89% so far. Despite its size (more than 2,000 total stores), this has taken its market capitalization to $4.65 billion, less than 2% of the value of Wal-Mart (NYSE: WMT)"

Does this surprise you? Do you think they'll be able to survive? Do you shop there?

This is only news to me because I don't shop at Sears anymore. I have been in Sears twice in the past 4 years and very seldom prior to that. My dad wasn't a big car guy but he had a lot of tools and many of them came from Sears. He believed in the Craftsman guarantee "Lifetime Warranty: you break it and we'll replace it". When other brands started coming out with the same warranty, for a lot less money, I remember thinking that it would have a significant impact on their sales. However, I didn't have any idea that it would be this dramatic.

[Hijacker]

I still shop there occassionally, but it's primarily for tools. What's hurting Sears right now is its inability to fulfill orders via catalog when the damned company started as a catalog company.

Case in point: I ordered a Craftsman Pro air compressor and I'm told it's in stock at the nearest sears. They take my money, but I never get an update as to when to pick it up. Finally, I go to the store to see if maybe there was a hiccup in the system and I was never informed it was ready. The warehouse worker tells me that my order number was dropped and the inventory may or may not be there. So I wait, and the thing's in stock. I have to be charged a second time (for a $600 compressor I might add) and call sears.com to have the original order cancelled.

I was a bit irate, although I was hiding it fairly well. The floor sales guy that was helping me with this gave me a 10% discount for my troubles without any prompting. But the disconnect was the way online orders are fulfilled at the physical level. What happens is that each store keeps its inventory. When you buy something online, an order request is sent to the store. Someone has to physically agree to fulfill the order in a given time window. If they say yes, great! Come pick up your mess. If they say no, the order is cancelled and you're refunded your money. What happened to me was apparently a very normal thing to happen with .com orders (the sales guy was well versed in fixing this FUBAR). Someone didn't bother to respond. It effectively cancels the order without actually cancelling it.

If what happened to me happens to a lot of people, I can see why there is frustration and a slow down in sales. They're also not capitalizing very well on sales weekends. I stopped in there on fathers day and there wasn't a sale. Freaking fathers day. The one day of the year there should be a sale at Sears. It's the department store meant for buying men the crap they think they need.

[frapjap]

If what happened to me happens to a lot of people, I can see why there is frustration and a slow down in sales. They're also not capitalizing very well on sales weekends. I stopped in there on fathers day and there wasn't a sale. Freaking fathers day. The one day of the year there should be a sale at Sears. It's the department store meant for buying men the crap they think they need.

YES! I go in for tools on the big holidays and there was a HUGE lack of a sale on Father's Day this year. Memorial Day was crap, too. Labor Day better be badass.

We used to go there for clothes every so often, but its been at least a decade since I've bought any cloth from them. I did consider buying a tv and blue ray player at some point, but wound up purchasing from Newegg instead. Its apparent they're having a hard time keeping up. They even sold the Sears Tower. They have nice wares, they're just not all that cheap about it. The competition consistently undercuts them by $20-100.

[Looneybomber]

I never shop there. I bought a TV from them some yrs ago, moved to a different town and they closed the store here.

[Hijacker]

I have a feeling Sears will have to split off some of its under performing sectors and trim down operations if they want to stay afloat. Every Sears I've been in the past few years, they've always been slammed in the household goods section (tools, hardware, appliances, electronics), but the clothing floor is always empty. If they want to stay alive, it might be time to cut the clothing sales out and go to just selling the good stuff. I mean, how often do you see Sears advertising clothing sales anyways? It's always Craftsman and appliances they advertise.

[MinisterofDOOM]

Three problems:

1: Craftsman is a sub-brand of Sears and the only thing worth bothering with from them. Regular Sears-branded tools are nothing special.
2: Numerous cheaper off-brands offer very similar quality and warranties these days, and many are retailer-agnostic, so you don't have to go to a specific store to buy them.
3: Harbor Freight. Indian, Vietnamese, and Chinese tools for dirt cheap. The Chinese stuff is getting pretty good (which means increasing prices) while the rest is still cheap and expendable.

These three things add up to Sears rapidly losing relevance on both ends of the market. They either need to trim the fat as Bart said, or acknowledge that Craftsman isn't really as "premium" as it once was, and start focusing on that as their cash cow (without sacrificing quality or warranty). Or (probably the best option): Both of those.

I have LOTS of Craftsman stuff from back in the day (including multiple toolboxes and chests). But I also have tons of Cobalt and Stanley and other cheaper stuff. None of it has let me down. I'm sure not inclined to drive to a Sears just for Craftsman stuff when other stores sell tools that are as good or nearly so.

So maybe there's a third option in addition to the two above:
Drop the retail/service network and focus on product. Use other retailers as distribution networks instead.

[DrewH]

Every tool I've ever bought is Craftsman and I routinely continue to do so. I'm reminded of the quality difference between them and Kobalt every time I use small channel locks I was gifted from Lowes. Plainly put.. they suck and they're not old at all. I, like a lot of people, attribute my loyalty to the brand as something my father instilled in me. That said, they've never let me down and I own more than just hand tools.

Other than tools and appliances I don't shop for anything else there so a more focused approach sounds like a good idea.

[Jesda]

Yeah their clothing lines are bland and of average or below-average quality. Target has them beat by a wide margin. I've been surprised by the deals in their electronics department though.

If they disappear I hope the car battery and tool lines continue through K-Mart and other retail outlets.

[nissangirl74]

The last time I bought clothing at Sears was 18 years ago from their maternity line. There's truly nothing there worth me driving across town for. Also, a "Lifetime warranty" guarantee from a company who is this unstable doesn't make me want to buy from them at all. If I break a crescent wrench and Sears has gone under, who's gonna honor that warranty?

[Bubba1]

The last time I bought clothing at Sears was 18 years ago from their maternity line. There's truly nothing there worth me driving across town for. Also, a "Lifetime warranty" guarantee from a company who is this unstable doesn't make me want to buy from them at all. If I break a crescent wrench and Sears has gone under, who's gonna honor that warranty?

Good question about the lifetime guarantee. The answer is probably the same as where I could trade in my zillion frequent flier miles when the old Midway airlines went bankrupt.... nowhere.

I recently bought a pair of brand name denim jeans on an impulse at Sears while waiting for my wife to finish up her shopping elsewhere in the mall. It was priced reasonably on sale, though It took quite awhile to find a sales person to pay for it.

I think a big reason big box store retailers like Sears struggle is the cost of the rent and labor. That's in addition to the plague competition we know as Walmart or on-line retailers like Amazon, or warehouse chains like Sam's (also part of Walmart). Walmart's rents are typically much lower than Sears as Walmart locate themselves away from the high dollar major malls, and also garner huge tax breaks from naiive local municipal governments who want them in their towns to spur development. Well, until they figure out later they made a deal with the devil, as Walmart literally kills off the local competition thereby reducing the tax income.

As far as spinning off the hardware stuff, here in the northeast, Sears already opened up a whole bunch of smaller Sears Hardware stores featuring Craftsman tools. Bigger than a neighborhood True Value Hardware but much smaller than a Home Depot/Lowes.

Personally, I buy all my hardware at a local family-owned old-fashioned hardware store. I pay a little more but I'm supporting a neighbor and I feel like I'm helping my little borough retain it's small town charm rather than feeding a giant corporate monster like Walmart.

[frapjap]

As far as spinning off the hardware stuff, here in the northeast, Sears already opened up a whole bunch of smaller Sears Hardware stores featuring Craftsman tools. Bigger than a neighborhood True Value Hardware but much smaller than a Home Depot/Lowes.

I haven't seen one of these yet, but would love to. Especially if the hours are as good as Sears. Though its a bit further away than our "your name here" Ace Hardware, they're open earlier and I can replace my broken 1/4 drive socket at 7am- much to my surprise.

[WDRacing]

I buy all my tools at Harbor Freight. I used to be a Craftsman guy, but their stuff simply isn't worth the money. Every time I've broken a tool from Harbor Freight I've been able to exchange it for a new one, without ever purchasing the ins. Just walk in with the broken tool and swap that dude out.

I can't even remember the last time I saw advertising that made me want to go to Sears.

[Kompresshun]

I used to buy all Craftsman or Snap-on tools, but now I buy them from pretty much anywhere depending on the tool. Probably the majority of my tools now are Kobalt though and then I have some Stanley stuff(screwdrivers and ect).

I honestly can't remember the last time i've bought anything in a Sears store either. Their hardware area is usually pretty well staffed, but the rest of the store is very sparse with staffing. None of their products they carry interest me outside of hardware and lawn and garden. I buy stuff occasionally online from them since they run some awesome clearance deals on tools, but in an actual store it's pretty rare these days.

It's sad because I can remember 15 years ago going with my dad to Sears on a Saturday to look at tools was a special thing. Now there's nothing to get excited about when you go there.

[breadbox]

I've never really liked Sears. I still go there for an occasional deal or just for a gift with the wife for someone.

My problem is mainly picking stuff up from the back. example: My wife really liked this purple light up christmas hippo yard decoration. We tell the associate we want to buy it, he gets the number and checks us out, then tells us to go wait for it (kinda in the back) and a guy in the warehouse will grab it for us. So we wait there in this area staring at a timer and recall sheets, then 10-15mins later some random super slow walking warehouse guy emerges and gives us the hippo so we can leave. What is so difficult about letting me continue to look around and bringing it to me? Instead of being sent to some creepy part of the store. Also seemingly the highschool aged kids in the automotive dept have no knowledge of the inventory they sell. "Yeah we have spanner wrenches, um, uh, what does it look like?" stuff like this.

I like Craftsman and the housewares dept has really good staff, I just don't think I would cry to hard if it wasn't there, also Hampton Roads is saturated with stores just like it and cheaper.

[DrewH]

I'm not concerned about the lifetime warranty issue. If Sears were to go into the crapper as a whole I would expect Craftsman to survive the fire. Even if they didn't I've only broken 2 tools in my life and they were both my fault. Screwdriver as a pry bar and over torquing a socket adapter.

[Hijacker]

The only craftsman tools that routinely break on me are their picks. I've gone through two sets now and am working on the third. For as little as I use them, they come out of their handles way too often.

[PapaSmurf2k3]

I had a craftsman ratchet pretty much explode on me once. Springs and ratchet guts went everywhere.

Of course, this was in the middle of a job. So I go to the store to return it, and they say they wont do it and I have to mail it in. So what am I supposed to do with this half completed work I have? Buy another ratchet?
At the time, they told me it was a new policy. I told them it was a really dumb one, and haven't bought a f*** thing from them since.
Like Brian said, Harbor Freight arguably has a better exchange program, for MUCH less money. You just end up standing in line a little longer, the place is a little dirtier, and you always buy way more s*** than you ever intended to.

[DrewH]

Thats wierd. The socket adapter I broke was fairly recently and I just walked in and exchanged it.

[nissangirl74]

I wonder if their failed customer service has anything to do with their overall failure. I distinctly remember the clerks at the Sears my dad and I used to go to. They're a far cry from the clerks they have now, if you can even find one (according to you guys). It's one thing if you don't really need / expect customer service (buying online *Amazon*). But if you're in a store, you expect to be able to find someone to at least ring up your stuff. hard to build sales if there's no one around. *while walking up and down the aisles, start yelling* "COME HERE AND TAKE MY MONEY!!"

[WDRacing]

you always buy way more s*** than you ever intended to.

THAT is a true f@#$%^& statement right there. I always say to myself, "you know, I could use one of those, why not it's only $4.99." When I finally arrive at the check out counter my hand basket is half full of shiny s***.

[Kompresshun]

^True for me too.

I always find myself wandering through the tool section in Lowe's anytime I go in there and almost everytime I end up throwing something in the basket. That's exactly why I have two toolboxes too and am starting to need a third one.

[WDRacing]

I hear that, I started using a method we used in the USAF. "Specialized toolboxes". I have one for plumbing tools and parts/pieces, one for electrical and two for car stuff. Helps me keep things sorted.

[Kompresshun]

I keep all of my "day to day" tools in a 5 drawer chest on the workbench, then I have a 7 drawer box with a cabinet under the bottom drawers that I keep all of my air tools, wrenches, sockets, and specialty tools in. If I ever can make a trip back to GA, I have another toolbox full of specialty automotive tools(bearing pullers, brake tools, engine rebuilding tools) that I need to get.

Last year for Christmas, my in-laws asked what I needed. I told them tools. "But we got you tools last year, don't you want something else and what if we get something you already have?"

I told them that you can never go wrong giving me tools and I will never get tired of getting them. If I have it already, I don't care, because i'm going to need a spare someday.

[WDRacing]

Hand them an Adam and Eve catalog this year!

[Kompresshun]

I'm pretty sure they both would curl up and die if I handed them one of those.

[nissangirl74]

You better take pics of their faces if you do.

[frapjap]

Drill bits and grinding stones are ALWAYS a valid answer.

[Kompresshun]

You better take pics of their faces if you do.

I can imagine that it'll be a similar reaction to when they find out i'm getting my motorcycle license and Kristen is thinking about getting a tattoo

[nissangirl74]

Ahhh, the parents that can't let go and accept that their child is old enough and free to make their own decisions.

[confused9]

I don't know what the pay is now in the auto center but I was making $5.60/hour in 08 in CA which wasn't much lol.