Sears is back … at least in Burbank.
The retailer, which closed its store last year in Burbank Town Center, quietly reopened it a couple of months ago.
The store’s entrance features large signs that coax shoppers to “rediscover Sears” and “come see what’s in store!”
For passing shoppers, the reemergence of Sears is likely the equivalent of a retail mirage, given the company’s 2018 bankruptcy, which saw hundreds of Sears stores close, leaving just 12 U.S. locations in operation.
With another Sears reopening in Union Gap, Washington, one might wonder if the company’s latest moves are signaling a revival of the storied department store chain.
Not likely, says Burt P. Flickinger III, managing director for the retail consulting firm Strategic Resource Group.
Flickinger said Transformco, the company that owns the remaining Sears properties, can make considerably more money leasing vacant Sears stores to mega-revenue generators like Costco, Amazon or Walmart.
Those stores are far more in demand by mall operators looking to reap big profits, Flickinger said.
“A Costco can generate $250 million to $300 million in sales per store per year,” he said. “So compare that to a Sears, which generates about $20 million a year, or a Kmart that would generate $10 million to $20 million a year.”
Flickinger said big retailers also can lease and retrofit vacant Sears locations quickly, as opposed to scouting out unfinished properties.
“A normal site-selection process could take three to five years, but these vacant Sears stores can typically be leased and converted in 100 days,” he said.
Representatives with Illinois-based Transformco, which also owns Kmart, could not be reached regarding the possibility of additional store openings.
A manager at the three-story Sears store in Burbank provided a phone number to call for more information regarding Sears, but it was not in service. Burbank Town Center management referred all inquiries to Transformco.
A possible comeback?
Simeon Siegel, a retail analyst at BMO Capital Markets, offered an alternate to Flickinger’s assessment in a recent interview with CNN, saying Sears could conceivably make a comeback.
“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. “Recognizing that there is value in a brand name, even if that brand went out of business, is not something new.”
The Burbank store is draped in big blue signs at the entrance that read, “Rediscover Sears” and “Come see what’s in store!” But foot traffic has reportedly been slow.
An employee in the store’s housewares department said business has been spotty.
“It’s on and off,” she said.
Arpine Smith, who works at a Mrs. Fields cookie shop in the mall, said she hasn’t seen many customers coming and going at Sears.
“It’s not that busy right now … but with the holidays it could get busier,” she said.
Some history
Once the nation’s top retailer and its largest employer, Sears was founded in 1892 by Richard Warren Sears and Alvah Curtis Roebuck. Sears, Roebuck and Co. began as a mail order catalog but later grew to include more than 3,000 retail locations, beginning in Chicago.
As the company expanded, Sears also offered its own brands, including Kenmore appliances and Craftsman tools. And the Sears Tower in downtown Chicago, where the corporate parent operated, was the world’s tallest skyscraper until 1998.
Hedge fund manager Eddie Lampert bought control of the Sears chain in 2005 for $11 billion and merged it with Kmart, another retailer in his portfolio. At that time, the two brands collectively had about 3,500 stores with more than 300,000 employees.
In 2018, the company filed for Chapter 11 bankruptcy. As of Nov 6, 2023, there were 13 Sears stores remaining, including 12 in the continental U.S. and one in the U.S territory of Puerto Rico.
Castus, a business development firm, attributes Sears’ downfall to a variety of factors, including the company’s failure to pivot away from a mall-based model amid increasing online shopping, its merger with discount retailer Kmart and a stagnant in-store experience.
Susan Lemoine, who owns Dancers Barre, a dancing apparel and accessories shop in Sherman Oaks, isn’t thrilled with the idea of a Sears comeback.
“I think the country needs to focus more on small business and help the next generation have a piece of the American Dream,” she said.
