Sears: left behind, along with their malls

Sears -- Landover, MD
[Photo © 2003 djcn0te, via Flickr]

The imminent departure of two so-perplexingly-empty-as-to-be-infamous Sears department stores — the “still open” Sears at Landover Mall (the rest of which died in 2002) and its hometown flagship at State & Madison in Chicago — brought out the usual drumbeat of obituaries about Sears. As Lewis Lazare, a standby on the Chicago biz beat, writes about State Street: “So, the drip, drip, drip that is Sears’ excruciatingly slow death march goes on.”

Wondering why isn’t this company gone yet?, I discovered a 2012 pre-obituary from Crain’s Chicago Business. They’ve even scanned in three previous cover packages, from 1978, 1988, and 1990, all of which identify pretty much the same troubles in the core department-store business — one of which being that malls had stalled as a growth platform by the late 1980s. (The 2012 article quotes former CEO Alan Lacy about the 1990s: “We did the analysis. Shoppers who used to go to the mall eight times a year now went three.”)

The 1978 article trumpets that Sears, whose then-new tower crowned Chicago’s skyline, has “gross sales account[ing] for about 1%* of the Gross National Product… Last year’s sales: $17.22 billion. Profits: $838 million.” In 2013 (based on guidance, not final report) domestic Sears sales will amount to about $20.1 billion, and domestic losses about $300-400 million. So, in nominal dollars, the company’s sales have grown! And yet…

Left behind
(1977 levels = 100)

Some have bid up SHLD, hoping that a breakup might unlock vast sums in real estate value. Well, consider that just being near a Sears for all these years likely depresses property values. Given Sears’ sheer ubiquity among malls of a certain age, it’s much more likely that only a handful of its locations remain trophies; the rest are in B/C malls which are headed for demolition.

It seems that there’s still a long way for Sears to fall. With any luck, I hope it won’t be too ignominious an end.

* By comparison, Wal-Mart’s 2012 domestic sales were $275 billion, which accounts for 1.6% of US GDP. Perhaps there’s an implicit limit to be learned here…

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  1. Pingback: If “everyone” were moving back to the city, would you? | west north

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