Kmart is owned by the same company that owns Sears, and its majority owner is a hedge fund guy named Eddie Lampert. He’s supposedly brilliant, but a little weird. His management approach for Sears is to have the various divisions compete for resources. It may be one reason the company is so fucked up. (That and there doesn’t seem to be anyone with merchandising experience running things.)
K-Mart? Sears? Radioshack? I know I haven’t been paying much attention, but I thought they all went under years ago. I certainly haven’t been to any of them in probably a decade or more.
I worked at Kmart back when I was in college – (this would have been oh, a good 13 years ago or so). It wasn’t all that much better at the one I was at. (It depended on your location – we got a lot of asshole customers who didn’t mind making a mess, we were desparately understaffed, and managment had their heads up their asses)
One major problem is understaffing – to save on money they’ll schedule just barely enough people they need to cover the registers, have one person to cover three departments, etc. Then if someone calls in sick, you’re screwed. I don’t know if they’re still doing it, but it wouldn’t surprise me.
The poll should have: “What? Kmart is still in business?”
This seems plausible.
OK, this is going to require an embarrassing admission. In one scene of the Adam Sandler film Grown Ups 2, the main characters visit Kmart. Except this Kmart is unlike any I’ve ever seen. It’s bright with merchandise that is displayed well and no pallets of crap in the middle of the aisles. If their real-life stores looked like this, the company would not be teetering on the verge of bankruptcy.
(The embarrassing admission is, of course, that I watched that movie.)
Say three Will Ferrells and sin no more, my son.
Going just by the information in the article, I could see it as possible that Lampert’s goal is to accept that brick and mortar is dying, but to use evolutionary forces to see if any one business can find a way to continue existing. With 30 organizations, even if 29 of them go under, the company can continue to exist with just that remaining one. Minus the division, if 97% of the business goes under, all of the business will go down in flames.
Fatalist, but potentially the right path.
the k mart finally closed here after 4 or 5 years of looking like they were at deaths door … ours went from being a place to shop to crap in the last 10 years … they closed all the little things that made going there cool like the deli counter … then the lunch spot… then they took out the soda/icee machines (tho they put those back pretty quick)… about 2003 or 4 is when ours started dying
Only things that kept them open here is it was he one place you could get the hot new video game on day one because no one went there … and they had all these niche games that I never seen anywhere else but they kept a lot of their games for full price long after they hit the bargain bin that and the Walmart here got rid of layaway but then it came back from mid aug to mid dec and that nailed the coffin
The last 2 things I bought at a k-mart was the original game boy advance when GameStop had a month long waiting list for 20$ cheaper then gs and sid meiers pirates for the Wii (which had a ton of stuff the other versions didn’t ) that I didn’t even know they made …
And guin I remember your epic rants against k-mart and the day you finally quit …
Montgomery Ward’s still exists. It was bought out by the Swiss Colony corporation and, like SC, does 90%-plus of its business in the last few weeks of the year.
My brother and his wife saw Wards’ demise coming a decade before it happened. Remember when Wards used to have someone sitting outside the store at a card table, with some doodad you could get in exchange for signing up for a credit card? Yeah, those credit cards were given out to anybody, and they worked at the headquarters in Kansas City as temporary after-Christmas help. They knew then that they were terribly in the red and would never recover because of all the deadbeat creditors.
Kmart is gone from my region, although we still have a Sears - and, for that matter, at least one Radio Shack that I know of. The Sears at the mall near my house appears to sell mostly exercise equipment and Craftsman items.
I was going to mention that swiss colony owns wards now because I just opened the catalog from them we received today …
They just sell the same stuff all of the other 50 brands swiss colony owns does now
I could see your point, if those thirty divisions were standalone businesses, and 29 failed leaving the one remaining successful one. But they’re not standalone businesses. From the BusinessWeek article, “To boost ‘visibility and accountability,’ Lampert explained in a letter to investors, he divided the company into more than 30 business units, including product-based divisions (apparel, tools, appliances), support functions (human resources, IT), brands (Kenmore appliances, Craftsman tools, DieHard batteries), and units focused on e-commerce and real estate. Under the new scheme, each business unit had its own president, chief marketing officer, board of directors, and, most important, its own profit-and-loss statement.”
Under his system, the appliance division had to pay fees to the Kenmore appliance division to sell its products. That meant that other brands were more profitable, so the appliance division promoted, say, LG appliances rather than Kenmore appliances. Rather than having the various divisions cooperate for the greater good, he has them compete for limited resources.
We’ve still got two K-Marts in Manhattan; the one in Penn Station and the one on 8th Street. They will never die!
From what I’ve heard (from a former Kmart manager*), Lampert’s goal is to prove that the Objectivist principles of Ayn Rand can be applied to business. And it’s working about as well as you’d expect, but he remains convinced in the ultimate infallibility of Social Darwinism, or something.
*edit: no wait, it was Sears
Too bad his goal isn’t to build a successful retailer and thereby make money for his investors.
Sears was actually a good business until Kmart bought them out, and then everything went down hill. My uncle worked there for years, and at one point they had quality shit. (Craftsman tools, for example, their appliances, etc)
Don’t have to liquidate real estate to go out of business. Just have to board it up.
one thing sears makes money on is its appliance warranties you get enough 2 year warranties at about 250 each and even if they have to replace the appliance once its still 90 percent profit…
we had a sears card and they called every time we needed service to re-up the warranty and once the caller noticed we didn’t have to renew for 6 years he put us on a no call list for a while
Well, they should really considering hiring a security detail for your mom, and maybe you, too. And give you both free health insurance (Cadillac level).
If they had made that move 20 years ago they could have claimed that category. Dollar General and Family Dollar are now firmly entrenched there. There is nowhere for Kmart to go that is not a tremendously uphill battle.
Read the prior posts, Kmart is now basically a real estate company. One of the smart things early management did was to buy the land that many of the stores occupy. They could board up the stores tomorrow, but would still be a company because of rental income from leasing the land/buildings to someone else. To go away, Kmart has to liquidate the land it owns.
IME most KMarts are in dingy strip centers in dingy parts of town. They tend to be the “anchor” biggest box of the center they’re in. With perhaps a grocery store as second box, then a bunch of storefront-sized generic retail, take-out, etc.
A consequence of that is that if the anchor is “boarded up” the other retailers suffer a lot and pretty quickly fail as well. And in those dingier parts of town it’s difficult to find anyone wanting to open a replacement biggish box store. It’s too much SF in one place for the total volume and velocity of retail spending in the catchment area.
So instead some get converted to flea markets and such. Some end up as seasonal Halloween or Christmas stores and that’s it. Otherwise the big box sits empty.
So in general unlocking the value of the underlying land involves removing (at least some of) the existing buildings and putting something else there. Which could be apartments or it could be new smaller retail. Zoning plays a big role here. As does the availability of capital to recapitalize the land with new buildings.
Certainly some sites will have good potential to redevelop. IMO most of the others not so much. It also seems to me that if they don’t redevelop soon while interest rates are low, they’re not going to be able to afford to do so once they’re borrowing at 2-3% more than today’s amazingly low rates.
Tldr: I doubt that a lot of KMart’s depressed half-blighted land in depressed half-blighted areas is all that much of a future gold mine for Lampert et al. It’s more likely to be a property tax-driven anchor that sinks the whole thing.