• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Consumer Discretionary

22 Reasons Why the End Is Near for Sears

A lack of vision and effort is driving it into the ground.
By BRIAN SOZZI Feb 26, 2015 | 11:15 AM EST
Stocks quotes in this article: SHLD, TGT, WMT, AMZN, M, BBW, JCP, BBY, HD, LOW

Today will bring a series of dreadful figures from much-maligned Sears Holdings (SHLD), but unfortunately they are only going to tell part of why the storied retailer is headed for extinction before the year 2020.

There is no love lost between myself and Sears Holdings. But, honestly, covering Sears has become a personal obsession. Lately, I've had more casual conversations with store associates. More store walks. Constant re-reading of annual reports. Emails continue to flood my inbox from laid off Kmart workers.

I believe many of Sears' problems are in its C-suite. And that includes CEO Edward Lampert. These execs, in my view, can't hold a candle to those at Target (TGT), Wal-Mart (WMT), Amazon (AMZN) or Macy's (M) that are transforming modern day retailing. And the lack of vision, the lack of effort by these check collectors is what's driving Sears, and Kmart, right into the ground.

The death of Sears will ultimately transpire because of the meaningful changes in retail that it's not partaking in, for one because its execs don't care to partake in them, and two the company's financial state doesn't afford it the ability to invest. Here are 22 reasons, broken down by major Sears competitors, why five years of bad news is ahead for the zombie retailer.

Macy's

  1. Is now remodeling stores into the department store of the future. New remodels are flush with bright, bold-looking fixtures and leading assortments from top vendors.
  2. Macy's is increasingly partnering with specialty retailers to bring unique experiences into its stores. For instance, the company opened a Build-A-Bear (BBW) shop inside of Macy's Herald Square this holiday season.
  3. Macy's has shown it wants to be an acquirer of unique brands, such as Bluemercury. The recent cosmetics acquisition gives the company the ability to sell more cosmetics into its stores online, and via external locations. Honorable mention here to J.C. Penney (JCP): the company's Sephora brand remains on fire, and is being expanded to more stores.
  4. The company continues to localize its inventory, which positions it well to capture demand.
  5. Macy's will be expanding its same-day delivery service this year.
  6. Macy's will be a player in the off-price channel soon. A big negative for Sears.

Wal-Mart

  1. The company is surrounding its supercenters with smaller format stores, thieving sales from traditional grocery stores, pharmacies and Kmart.
  2. Wal-Mart is actively expanding the amount of space in its stores dedicated to selling fresh food.  Have you ever seen fresh food (not frozen stuff in outdated looking coolers) at Kmart or Sears?
  3. Wal-Mart's new "Savings Catcher" app, which provides money back in real-time to low income people, is a game changer. 
  4. Wal-Mart's higher wage and training initiative is something Sears is unable to compete with now, or ever.
  5. The company continues to expand the number of items for sale online.
  6. Wal-Mart is investing in more competitive prices across the store.

Target

  1. Re-doing the look and service aspect of its electronics department. Sears was once known for its electronics department, but it has become a depressing place to shop amid inventory cutbacks.
  2. Similar to Wal-Mart, Target is upping the number of organic food items available for sale. These companies are catering to how humans want to eat today.
  3. Target is coming back online, aided by a strong mobile app and improved homepage.
  4. The toy department is being remodeled; expect more shops that draw in the consumer's eye.
  5. Target's apparel section is becoming interesting again; see Lilly Pulitzer launch on April 19.

Best Buy (BBY)

  1. New shops from top vendors have customer service and selections Sears in no way offers.
  2. Is becoming a player in connected home (as is Home Depot (HD)). Sears is badly positioned in connected home.
  3. Continues to expand home appliance offerings, once a go-to category for Sears (as does Home Depot and Lowe's (LOW)).
  4. The Apple Watch will feature prominently at Best Buy. Not sure if it appears in Sears -- I view the product as game-changing.
  5. Now price matches.

Sears either doesn't do any of these things, or doesn't do them well operationally. And for those reasons -- dust off the CFA textbooks -- the unraveling of Sears will be both confusing to analyze and sad to see.

Get an email alert each time I write an article for Real Money.  Click the "+Follow" next to my byline on this article.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, neither Sozzi nor his firm owned any of the securities mentioned.

TAGS: Investing | U.S. Equity | Consumer Discretionary

More from Consumer Discretionary

An Entertainment Giant and a Big Drugmaker Present Buy Setups

Carolyn Boroden
Jan 26, 2021 8:30 AM EST

The stocks of Walt Disney Co. and Pfizer seem to offer nice upside potential based on their technical patterns.

Logitech Could Decline Further From Here

Bruce Kamich
Jan 20, 2021 8:50 AM EST

A stock that declines in the face of what appears to be bullish news tells us something.

Boot Barn Gets a Quant Upgrade: Do the Charts Fit?

Bruce Kamich
Jan 19, 2021 1:53 PM EST

Here's our latest analysis and trading strategy for the shares.

Signet Jewelers May Retest the Breakout From Its Base Pattern

Bruce Kamich
Jan 15, 2021 8:09 AM EST

There is a risk of a pullback to the top of the base pattern or down to the $30 area.

Norwegian Cruise Lines Fights to Survive

Jonathan Heller
Jan 13, 2021 11:00 AM EST

The markets appear to be looking forward for the cruise industry.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 09:35 AM EST CHRIS VERSACE

    Another Big Winner for Stocks Under $10

    We're ringing the register Tuesday morning.
  • 08:05 AM EST GARY BERMAN

    Tuesday Morning Fibocall for 1/26/2021

    SPX (Long-Term View) The 1/21/21 NEW high @ 3861...
  • 09:52 AM EST GARY BERMAN

    INDU/DIA 20 DMA

    Fibocall: The DIA has the 20 DMA @ 307.81 and w...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login