What Happens If Sears Goes Away? - Twice

What Happens If Sears Goes Away?

As you have read, Sears Holdings lost $279 million in its fiscal first quarter. It is a major loss in a string of many for the retailer that operates Sears and Kmart.
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As you have read, Sears Holdings lost $279 million in its fiscal first quarter. It is a major loss in a string of many for the retailer that operates Sears and Kmart.

While we don’t wish this on any company, this has to beg the question: “What happens if Sears goes away?”

In major appliances, where it is still No. 1, Sears had $7.28 billion in sales during 2011, according to the TWICE Top 100 Major Appliance Report. (This year’s report will appear June 17.) Kmart had $76 million in majaps sales that same year.

If Sears leaves the scene, who does that help? Sure, Lowe’s and Home Depot Best Buy has given indications it will now push major appliances more, as has hhgregg. And a group that is always overlooked - independent retailers - most of which are members of buying groups.

In consumer electronics Sears had $2.1 billion in sales for 2012, according to the TWICE Top 100 CE Retailers report we published this week, and is number 12 on the list. Kmart is ranked number 26 on our list with $622 million in sales last year.

If Sears and Kmart went away Best Buy, Walmart, Amazon, Target, hhgregg – national players – will all benefit. Again independent retailers, usually regional, privately-held retailers, will also see an increase in sales.

If Sears and Kmart close it will be bad for their employees, stockholders and their loyal customers, and will be the end of an era in retailing.

I certainly don’t wish that Sears or Kmart go away, but we have seen plenty of times before in consumer electronics and major appliances, such as Circuit City, that when important players leave the market it benefits the other retailers that remain.

Still, it is only a short-term benefit. Retailers still have to continually upgrade their in-store and online operations for today’s and tomorrow’s customers. But that is a discussion for another day.

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