Sears is Vanishing from our Minds, the Shocking 18 Photos That Show Why

Oh my goodness, so disturbing.

How does a general merchandise retailer make money?  The simple equation:

Bring a product to market the customer wants when they want it + display it in a fairly compelling environment + stick a fair price on it.

There is a little more to it, but that’s the basic secret sauce.  Sears is doing none of that.  Since I am a busy fella I will not sit here and bash a company that has been bashed for as long as I have walked the Earth.  To understand why Sears is in a “sell stores mode” one must look no further than the stores themselves, where the truth is to be found.  The bellow pics are left open to your open personal interpretation, naturally.  I will share mine.

Eddie Lampert…this is your investment in real-time.

6 Facts Before We Get Started

  1. Capex in 2007: $570 million.
  2. Capex in 2012: $378 million.
  3. Capex as a percentage of revenue in 2012: a measly 0.9%, by FAR the lowest of any publicly traded retailer that I know.       For perspective, Macy’s had a ratio of 3.4% in 2012.
  4. Cash & Equivalents in 2005: $4.4 billion.
  5. Cash & Equivalents in 2012: $609 million.
  6. Inventory levels: -23.7% since 2006.

The Vertical Slideshow

If you are living darn near paycheck to paycheck, does this presentation excite you about making a purchase with a couple saved up electronic dollars?  Check out the mannequin innovation now underway at Macy’s and Lord  & Taylor (yes, I have pics, email me) that trigger excitement and show a consumer how to pull together entire outfits (which leads to a higher ticket…).  Even JC Penney has some fab looking mannequins left in its stores from the Ron Johnson failure.

SHLD Mann

Huh?  A random football themed carpet with no promotion around it?  What’s the deal in the back of this electronics department?  Does Best Buy look like this?  Or, how about the electronics sections at Wal-Mart, Target, Costco, and BJ’s Wholesale?  Nope.  Where is the shoe inventory?  Target usually looks fairly well-stocked to me.

Football Carpet

Shelves 1

Shoe Inventory

The team can’t find any way to repurpose abandoned portrait studios into something that drives traffic and sales?  The consistently dark zones give a “going out of business” feel to nearby departments that actually log some sales, which include appliances and baby.

Portrait Studio

Hey babe, wanna chill in the dimly lit Club Sears this Friday night?  Dinner and fun as always on me.  It’s dim because the lights are out!! This is not great for flattering a potential customer trying on merchandise.   This is where the store underinvestment appears loud and ugly.   BTW, see how Macy’s is flattering its consumers.

Lights 1

Lights 2

Attack of the female basics?   Look at the lack of organization.  Not spotted: customer service to help with such an intimate purchase.

Basics 1

Basics 2

Hmm.

Hmm

Toys stacked on a shelf next to an escalator by the shoe department.  Kay.

Toys

Accessories are some of the only discretionary items selling in the mall with consistency these days.  Best of luck navigating this flea market experience.  Flea market experience = an inability to push up margins on items that should be high margin.

Accessories

Inventory excess…an entire department of it!  Who is in charge of planning and allocation?  Once again, examples of underinvestment in the very structure of the business.

Inventory Excess

JC Penney has Sephora.  Macy’s newly remodeled stores have an array of associates at the ready to assist in cosmetics, ditto Lord & Taylor.  Ulta stores are popping up everywhere.  Sears, well, yeah.

cosmetics

Retail is detail?  Not here.

Detail 1

Detail 2

Dirty Rug

As you can see, I left the store with a closet full.

Basket

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