Troubled retailer Sears quietly reopens two stores. What is behind the comeback?
But talk of Sears’ demise may be premature: just two months ago, a previously shuttered Sears in Burbank, California, quietly turned the lights back on. Two weeks after that, another reopened in Union Gap, Washington.
The reborn Sears in Burbank looks like a typical American department store. Mattresses, appliances, and other home goods populate the ground floor. Up an escalator you find clothing, bags, and accessories. Another escalator transports you up to a third floor, but it was roped off when visited with signs promising something would be coming soon.
The store was clean and organized – but shoppers were sparse.
The newly reopened Burbank location, which initially closed one year ago, likely didn’t look so different from a typical Sears store in 2005, when it was merged with another retailer in his portfolio, Kmart. That year, the two brands counted 3,500 US stores between them and more than 300,000 employees.
Today’s Sears’ footprint is minuscule, with no more than 12 Sears stores remaining in the continental US, according to data from Google Maps. A November post in the Union Gap, WA Facebook group confirmed that store location’s reopening.
Some suggest that Sears’ acquisition was part of a play in the real estate market. The brand exists under a holding company called Transformco. Attempts to get a clear answer proved unsuccessful. The Burbank store’s manager passed along a phone number for Sears’ media department; the number was not in service.
One Burbank store associate, who asked not to be named, told us they had worked at multiple Sears locations for decades and they were glad to be given the chance to come back.
The Sears catalog helped change the way Americans lived, allowing more people to shop from anywhere since they didn’t have to rely on nearby stores to buy goods.
As Sears grew and pioneered its own brands, the company became a juggernaut. The Sears Tower in downtown Chicago, where the corporate parent operated, was the world’s tallest skyscraper until 1998.
More than one Burbank store associate said they thought their store might be a test for Sears’ parent company, Transformco. They hoped that if their store proved successful, more locations would open and the brand might be revived.
Neil Saunders, managing director of GlobalData’s retail division, had a different view of Sears’ relaunch.
‘I don’t think it’s a serious attempt at revival,’ he said.
Saunders said it’s likely Sears hasn’t found tenants for some Transformco-owned retail locations due to challenges facing the overall retail sector.
‘For a very big space like Sears, you haven’t got many tenants. No department stores are really opening a lot of new outlets,’ he added.
When returned to Sears on Black Friday, few shoppers perused the aisles compared to other stores in the Burbank Town Center mall, where Sears is located. One Sears associate told us they hoped the store would be busier that day.
One shopper said she only learned the Burbank location had reopened after a conversation with her neighbor about Sears prompted an internet search of whether any stores remained open.
The Sears brand has been riding a rollercoaster for years. In the years after Lampert’s takeover, sales at the 137-year-old retailer slowed amid a lack of investment in store updates, a slower pivot to e-commerce, and increased competition from other big-box retailers and newer online behemoths such as Amazon.
By 2018, the company had filed for bankruptcy. The next year, Lampert’s hedge fund bought the remains of the business out of bankruptcy and renamed its parent company Transformco. The retailer exited bankruptcy with 223 Sears and 202 Kmart stores nationwide. But four years later, most of those stores have closed.
Sears shoppers we spoke with shared the store employees’ excitement about the reopening.
Simeon Siegel, a retail analyst at BMO Capital, said it was still possible for a store with strong brand-name recognition, like Sears, to make a comeback, even in the internet age.
‘Big stores that offer a large variety of products, but do so in a curated way, putting together products that you want – those are thriving,’ Siegel said.
‘You watched another company buy Bed Bath and Beyond’s intellectual property immediately after it went out because a brand is a tough thing to kill.’
At least one shopper was optimistic about a future for Sears if it embraces a more modern shopper.
‘I think they need to consult with the younger generation to find out more of what they want,’ she said, standing outside the Sears in Burbank. ‘Keep the products that people go in for, but innovate.’