Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

The Death Spiral

The Sears Horror Gets Worse

Just when you thought it was safe to go back to the mall, the Sears Holdings (NASDAQ: SHLD) horror show got worse. The carnage at this legendary retailer has reached an incredible level.

Highlights of the latest round of the Sears horror show include:

  • Year-to-Year revenues fell by nearly one third (-31.15%) in 2nd Quarter 2018.


  • Sears achieved an “operating income” of -$237 million on May 5, 2018.

  • That gave Sears a net income of -$424 million on the same day.


  • Sears actually achieved negative a “free cash flow” of $-1 billion on May 5, 2018.

Sears Liabilities Exceed its Total Assets

  • Sears total debt of $5.526 billion was approaching its total assets of $7.283 billion in May 2018.


  • Series liabilities of $11.396 billion now exceed its total assets by nearly $4 billion.


  • Sears revenue dropped from $53.02 billion in 2005 to $16.7 billion in 2017.
The Sears Tower
  • Sears lost $36.32 billion in revenues in 12 years.


Sears has Closed 500 stores in 15 months

Sears reportedly closed more than 500 stores in the past 15 months, USA Today calculated. Those number apparently include 78 stores that are scheduled to shut down by September.

This means Sears closed almost as many stores it operates under the Sears brand in 1st Quarter 2018. Sears reportedly operated 529 stores at the beginning of 2nd Quarter 2018.

Keeping up with Sears closing is hard because the company keeps adding stores to the list, USA Today reported. Sears announced plans to close 68 stores on June 6, then added 10 more to the list by July 2.

A revised list issued in early July included 62 Sears and 16 Kmart locations. Liquidation at some of the stores will start as early as July 13.

The stores slated for closure in July include the last Sears outlet in Chicago, the company’s hometown. Sears has been operating in Chicago since 1925 when it opened its first brick and mortar retail store. Historically, Sears was purely a mail-order company until after World War I.

Coast to coast to closure is obviously the name of the game at Kmart. Stores that will probably shut down in West Babylon, Long Island and in Portland, Oregon. Sears is closing in small towns, such as Grand Forks, Dakota, and in big cities such as St. Louis, Missouri.

Sears Liabilities Exceed its Total Assets

A true sign of desperation or shortsightedness has been reported at a Sears store in Brooklyn. A sorry attempt to combine Sears and Kmart is reportedly underway.

The lower floor of a Sears has apparently been converted into a Kmart, USA Today reported. The move comes 14 years after Sears merged with Kmart. It is probably too late to save the stores.

Had Sears tried such a move a decade ago, it might have been able to remain competitive with Target and Walmart. Additionally, Sears might have been able to reduce costs by closing redundant locations. Unfortunately, the combination is only being attempted now, 15 years too late.

At least two more combination stores are reportedly planned for New York City. What remains to be seen is if putting one dying store inside another will generate foot traffic. Logic dictates all the move will probably do is to give shoppers another reason to stay away from Sears.

Other plans at Sears reportedly include placing more appliance sections in New York City area Kmarts. A more interesting plan is to have Sears Auto Centers install tires ordered through Amazon (NASDAQ: AMZN).

The only problem with that is the speed at which Sears’ Auto Centers are closing. Customers that order tires on Amazon, will apparently have trouble finding a Sears to install them.

The Sears Tower as seen from Chicago’s lakefront.

Sears is Truly Doomed

It looks as if the end is truly under way at Sears. One has to wonder how long it take to close the rest of the company’s 529 stores.

This is a far cry from Sears’ heyday in 1969, when it was the largest retailer in the world. That was the year Sears began construction on the world’s tallest skyscraper – the Sears Tower.

Today Sears is known for its stock price – which fell to $2.39 a share on July 11, 2018. That price is apparently only the result of CEO and hedge fund billionaire Eddie Lampert’s odd habit of buying Sears stock.

Sears is now the fastest shrinking company in America. The retail legend is truly at death’s door. Expect to see Sears completely gone by 2020.