Why Sears May Be Done and Other Stores Could Be in Trouble
MUNCIE, Ind.--Sears has been in business since 1886, but the brand may be coming to an end soon. Prof. Steve Horwitz, an economic professor at Ball State University, said he doesn't believe the current plan to save Sears and K-Mart, will work.
Eddie Lampert, CEO of Sears, has promised to put up money to save the company. He'll have to bid against other liquidators Monday.
"I think they're over and done with," said Horwitz. "They've never had a plan. I think that's the whole problem here. Sears has never been able to figure out who it is and what it does in a world where they've got Amazon on one side, they've got discount stores on the other."
He said the plan by the CEO likely won't work.
"The unsecured creditors don't like it. The board doesn't like it. Nobody likes it except him, and may well be because he stands to be the biggest beneficiary."
Even though you often hear of Sears and K-Mart stores closing stores, 425 are still open, and 50,000 people are still employed.
Horwitz said he believes Sears did not evolve with other stores like Walmart, Target and Kroger that now offer an online shopping experience in addition to a traditional one. Amazon is another chief competitor.
"You can be everything to everyone the way Amazon does if you can get people things next day delivery, connect up with sellers over the web and make the user experience so easy and seemless. Sears never could do that," said Horwitz, who described even the online Sears experience as "clunky".
The catalog was a piece of American business history, and remains so, he said.
Horwitz said other traditional mall anchor stores, like Macy's, have also not adapted well, and have been closing stores. He said those are the stores most in trouble. Sears will likely have to sell the buildings and spaces their stores are in to pay the debt they've incurred.
PHOTO: Getty Images/Scott Olson