Just when you thought Sears was down to a piddling handful of stores still open – its Kmart doppelganger has just three locations left – parent company Transformco seems to have found a way to stay in the going-out-of-business business.
According to a report from the online newsletter Axios, it is closing at least 70 of its Hometown stores. Other press reports put the number at closer to 100. Either way, it represents yet another deconstruction of what was once perhaps the most iconic retailing brand in the country and only the latest step in Transformco owner Eddie Lampert’s ongoing dismantling process.
After running the former Sears Holding company into bankruptcy in 2019 – taking it from more than 3,000 stores under the Sears and Kmart banners at its peak in the early 2000s – Lampert bought what was left with the assurance to the bankruptcy court that he would protect the remaining 400 locations. Soon after, his newly formed Transformco entity also bought the balance of the Hometown network of approximately an additional 400 stores, indicating these smaller locations which focused on lawn and garden, appliance and other hard good categories would be the future face of the brand.
Three years later, the full-service Sears count is down to less than two dozen stores, an exact tally difficult to pin down given Transformco’s silence on the subject and conflicting online reports on exactly which stores remain open for business. More certain is the Kmart count: three stores left, in Westwood, NJ, Bridgehampton, on New York’s Long Island, and Miami.
Now comes the report of the Hometown closings. Even though they are largely independently owned and operate as franchises, it appears that Transformco is pulling the Sears sponsorship of them. If past history is any indication, this round will be followed by subsequent closings over the short-term until it too ceases to exist. Again, Transformco, which does not answer inquiries from the press, isn’t saying.
For Lampert, it’s only the latest chapter in his retail strategy which has seen enormous asset sales, including some of Sears most iconic brands, real estate deals that turned the parent company into a landlord rather than a retailer and assorted financial maneuverings – all legal it seems – that have enriched him at the expense of other shareholders, vendors who supplied the stores and, most exasperating, an estimated 250,000 employees who worked at the two brands at their height.
Exactly what is the monetization play of the Hometown shutdowns isn’t immediately clear. The stores are owned by the individual operators but it’s unknown who controls the real estate itself. There is also the equity in the brand that could be licensed or sold outright.
Since taking control of Sears and Kmart some two decades ago, Lampert has always been at least one step – often several – ahead of outsiders trying to figure out his endgame. In an earlier story for Forbes.com three years ago, I wrote “If he were half as good a retailer as he was a financial manipulator, his Sears would be one of the most successful retailers in America.”
In the meantime, those manipulations have entered yet another phase. Eddie Lampert strikes again.
WarrensReport 