The Sears Essentials store sits forlorn in an old strip mall off Hicks Road in northwest suburban Palatine. More than 150 blue shopping carts are lined up outside, but there are few shoppers inside the cavernous store on a weekday autumn afternoon. A salesman on the lookout for customers leans against a dishwasher. A middle-aged woman , frustrated that she can't find pumps in her size for a wedding, leaves empty-handed.
Sears Essentials -- the combination of Sears brands in former Kmart stores -- was supposed to be the future of Sears Holdings Corp., the $55 billion retail Goliath formed by the March 2005 merger of Sears and Kmart. But as the one-year anniversary of the merger arrives, the outlook for Sears is dismal.
At Sears' core chain of nearly 900 department stores, sales fell more than 8 percent in 2005 and 12 percent during the crucial holiday season.
Sears Holdings' debt is rated "junk" by all three major rating agencies, a far cry from the A credit rating the old Sears earned for decades.
Sears and Kmart are opening few new stores while competitors such as Wal-Mart unveil more than 300 new locations a year.
The man calling the shots on merchandising and marketing is Sears Holdings Chairman Edward Lampert, a 43-year-old hedge fund operator with no retail experience who gained control of Kmart while it was in Chapter 11 bankruptcy.
By rushing Kmart out of bankruptcy in 2003 to launch a bid for Sears in 2004, Lampert stretched himself and vastly expanded his retail empire.
Lampert's supporters, and there are many in the investment community, believe he will be able to hold on to his prize. In a vote of confidence, they recently bid up Sears Holdings stock to more than $130 a share.
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Sears Essentials -- the combination of Sears brands in former Kmart stores -- was supposed to be the future of Sears Holdings Corp., the $55 billion retail Goliath formed by the March 2005 merger of Sears and Kmart. But as the one-year anniversary of the merger arrives, the outlook for Sears is dismal.
At Sears' core chain of nearly 900 department stores, sales fell more than 8 percent in 2005 and 12 percent during the crucial holiday season.
Sears Holdings' debt is rated "junk" by all three major rating agencies, a far cry from the A credit rating the old Sears earned for decades.
Sears and Kmart are opening few new stores while competitors such as Wal-Mart unveil more than 300 new locations a year.
The man calling the shots on merchandising and marketing is Sears Holdings Chairman Edward Lampert, a 43-year-old hedge fund operator with no retail experience who gained control of Kmart while it was in Chapter 11 bankruptcy.
By rushing Kmart out of bankruptcy in 2003 to launch a bid for Sears in 2004, Lampert stretched himself and vastly expanded his retail empire.
Lampert's supporters, and there are many in the investment community, believe he will be able to hold on to his prize. In a vote of confidence, they recently bid up Sears Holdings stock to more than $130 a share.
http://www.philly.com/mld/belleville/business/14229989.htm?source=rss&channel=belleville_businessAlso check out:
