by Morgan Montalvo
Last week, iconic but long-suffering retailer Sears escaped dissolution when a hedge fund manager and former CEO stepped forward with a last-minute, $4.6-billion-dollar bailout package.
But the company’s continued inability to adapt to changing consumer habits, not a lack of sympathetic investors, could still spell the end for the onetime commercial giant, News Radio 1200 WOAI reports.
Texas economist Prof. M. Ray Perryman predicts extinction for any big-box chain that cannot offer what today’s tech-savvy shoppers want: a limited brick-and-mortar presence that showcases selection while also offering easy, responsive online ordering.
Those physical features, Perryman says, include “a more open-air type experience, a more specialized type of experience, more personal type of experience than what you sometimes have seen in the past.”
Perryman is president and CEO of The Perryman Group, a Waco-based research firm that has worked with more than 2,000 businesses and government agencies. He is a former faculty member at both Baylor University and Southern Methodist University and currently is a research fellow at the University of Texas.
Critics of Sears say the chain has not developed nimble online shopping platforms, and an antiquated telephone product inventory inquiry system does not allow customers to contact individual stores, or phone representatives to see what products each store has in stock.
“Part of what’s happened in the evolution over time is immediacy of response,” Perryman says, “and Sears did not adapt to that like a lot of other companies have.”
Sears’ detractors also say the company also has not updated its locations to increase visual appeal.
Creditors and a review panel this week will decide if the offer from former company head Eddie Lampert is sufficient to address the chain’s debt, keep the doors open at Sears’ remaining locations and save about 50,000 jobs.
Lampert’s proposal covers both Sears and sister discount chain Kmart, which, like Sears, has closed hundreds of stores across the country. KMart employs another 18,000 employees, also covered in Lampert’s offer. Sears’ parent company, Sears Holdings Ltd., filed for Chapter 11 bankruptcy in October 2018.
The petition listed $6.94 billion in assets and almost double that amount in liabilities.
About 3,500 Sears and Kmart stores were in operation when the two brands, or“nameplates,” merged ownership in 2005 under Lampert's stewardship.
The last year Sears reported a profitable earnings quarter was 2010. Less than 700 Sears and Kmart locations are still open.
Perryman says if the review panel does not green-light Lampert’s offer, there is some good news: in a near full-employment economy that boasts more retail job openings than candidates, most Sears and Kmart employees possess skills and experience that should prove attractive to other big-box chains or online sales operations.