According to a poll cited by the Chicago Sun-Times, Sears is the #2 holiday shopping destination this year (after Walmart.) So why can’t they make any money?
Maybe it’s because the media is “picking on” them. In a letter to Sears employees, Sears Holding CEO Eddie Lampert said:
“Much of the commentary in the media and on Wall Street . . . ignores the strength of our company and the progress that we have made.”
Credit Suisse analyst Gary Balter is siding with the media, says the Sun-Times:
Lampert said times are tough in retailing today. Balter said while that’s true, Wal-Mart and Target are enjoying good years. Balter said: Kmart’s net-profit margin is expected to decline to 3.6 percent this year from 5.1 percent; Wal-Mart’s projected flat operating margin is 7.4 percent this year and Target’s is 11 percent.
Sales productivity is $135 a square foot “and shrinking” at Kmart. That compares with Wal-Mart’s $584 and Target’s $314, according to Balter’s report.
We liked this part of Balter’s analysis the best:
Balter believes the answer is for Sears to get rid of its most valuable assets and realize that there’s no more profit to be squeezed from cutting costs at Kmart and Sears stores.
“Retailing is a very humbling profession, as Eddie is discovering,” Balter wrote. “Your lowest paid employee is the one who makes an impression on the customer. . . . One better instill a sense of customer service in the associates to be successful.”
Hey Sears: You can’t have the “shopping experience” of the Filthy Walmart, the customer service of Comcast after an ice storm and the prices of a mall department store if you expect to make any money.