Those halcyon days when bricks and mortar stores dominated the American landscape seem to be coming to a close; Sears, Kmart, and Payless are on the precipice, warning that they may soon go out of business; Radio Shack has declared bankruptcy again, and Staples is closing 70 of its stores.
Brick-and-mortar stores have a physical presence in buildings, unlike Internet retailers like Amazon.
On Tuesday, Sears Holdings, which also owns K-Mart, which it merged with in 2005, warned its investors it might not stay in business, stating in its annual report, “Our historical operating results indicate substantial doubt exists related to the company’s ability to continue as a going concern.”
Sears owes $4.2 billion; last year it owed roughly $3 billion. The company lost $2.2 billion in the fiscal year ending in January; the last year it showed an annual profit was 2010. It has lost $10.4 billion since then.
Chief Financial Officer Jason Hollar tried to stick the proverbial finger in the dike, asserting, “It is very important to reiterate that Sears Holdings remains focused on executing our transformation plan. This is evident in the decisive actions we have taken in recent months. Despite the risks outlined we remain confident in our financial position.”
In 2006, Sears had 355,000 employees; it currently has 140,000. Kmart had bought Borders Books and Sports Authority, but filed for bankruptcy in 2002.
Sears lost business to Walmart and Home Depot, as well as its place in the Dow Jones index of the nation’s most important companies in 1999.
Meanwhile, Payless Inc., the discount shoe chain, said it may file for bankruptcy as soon as next week. The chain plans to close 400 to 500 stores as it reorganizes operations. The company was founded in 1956 in Topeka, Kansas, and has over 4,000 stores in 30 countries.
Lastly, Staples announced it will close 70 more stores, having reported a $548 million loss and a 3 percent drop in sales in the fiscal fourth quarter that ended in January. Staples had attempted a merger with Office Depot, but the Federal Trade Commission blocked that effort in 2016.
On Wednesday, RadioShack filed for bankruptcy for the second time in two years, announcing it would close 200 of its 1,500 stores. Macy’s has announced it is closing 68 stores and cutting 10,000 jobs.