Why can’t department stores spin off specialized stores from the mothership and make them work? Saks closing its womens-only store in lower Manhattan is just the latest example of retailers from this channel who can’t seem to make it work. Add Macy’s, Bloomingdales and others to this list which seems to be a specialty of retailers who come from the department store world.
Eddie Lampert wants to buy Sears back and has bid $4.6 billion for the privilege. All kinds of theories have been raised as to why he would do this and at least some of them make sense when you explore the situation a little more closely.
The reasons vary but they all have one thing in common: Eddie has found another way to make money and benefit himself. Smart for him…but Stupid for investors, creditors and, worst of all, the thousands of Sears and Kmart employees still trying to earn a living.
If you live outside of rural and poorer America you probably don’t realize how many dollar-format stores are in business out there: How about 30,000 just from the two biggest public companies? For the coming year, the battle for market share in this channel is going to really heat up due to circumstances in and out of control of the major players. And it is going to impact every other operation up and down the retail food chain. Failure for other retailers to understand the dollar store business is just…well, Stupid.
As every big retailer from Walmart to Target to Amazon — plus smaller niche players like GameStop and American Girl — goes after the $11 billion in toy business that Toys’R’Us left hanging in the market, it’s all the more reason to wonder how stupid TRU was that they couldn’t make it work. Greed, bad management and more greed are to blame, but it’s just another example of Stupid Retailing. Read my take on Forbes.com:
When Home Depot reported outstanding numbers for its most recent quarter earlier this week and said it expected to continue to do well, what did Wall Street do? Of course, they focused on the few sentences of warnings in the HD statement about going up against storm-boosted numbers from a year ago and the general slowdown in the housing market. And the stock took a hit.
I just don’t get it. Clearly Depot is doing really well, continuing to gain market share and continuing to reap the benefits of homeowners staying in their current places and spending more on remodeling.