Retail Bankruptcy and Closures

With the start of the COVID-19 pandemic in 2020, shoplifting spiked. When businesses instructed employees not to interfere, it became more brazen and organized. Now, a new study reveals just how much it has increased

The National Retail Federation (NRF) has released a report showing a 93% increase in shoplifting incidents per year in 2023, compared to 2019. The study, conducted in partnership with the Loss Prevention Research Council, also shows financial losses from these crimes have risen by 90%. Some of those losses reduce profits but some get passed on to consumers.

The study highlights the significant challenges retailers face as they navigate an increasingly hostile environment marked by theft and violence. 

“Protecting store associates and customers, coupled with reducing today’s levels of violence and retail crime, requires a whole-community approach and collaboration across all stakeholders,” said David Johnston, NRF vice president for Asset Protection and Retail Operations.

Retailers in the survey experienced an average of 177 shoplifting incidents per day in 2023, with some sectors reporting numbers exceeding 1,000 incidents daily. NRF said the rise in violence associated with these crimes is particularly concerning, with 73% of retailers noting increased aggression from shoplifters compared to the previous year, and 91% observing more violence than in 2019. 

More money for training

In response, 71% of retailers have increased their budgets for employee training related to workplace violence.

Retailers have responded in different ways. While instructing employees not to interfere with thieves, some stores have placed more of their merchandise behind locked cases. Tony D’Onofrio, president of Sensormatic Solutions, said additional solutions will likely involve technology.

“Retailers and solution providers must work together to build and drive technology that goes beyond thwarting theft in the moment to predicting it,” he said.

The study also reports a rise in multi-person theft incidents, with 62% of respondents expressing increased concern over coordinated thefts involving two to three individuals. Organized Retail Crime (ORC) remains a significant threat NRF said,, with 76% of retailers more worried about ORC-related shoplifting than a year ago. Those capable of tracking ORC incidents reported a 57% increase from 2022 to 2023.

Before there was Walmart, there was Kmart. But, a published report says the last full-size Kmart store in the U.S. is closing, marking the end of an era.

Newsday quotes an employee of the store, located in Bridgehampton, N.Y., as saying the store will close its doors in October. One remaining small Kmart will continue to operate in Miami.

According to the Newsday report, the Bridgehampton store had been operating for 25 years.

Before Sam Walton, Kmart pioneered the concept of the big box discount retailer, opening its first store in 1962. At its peak in the early 1990s, it operated more than 2,300 stores.

Kmart’s roots were firmly planted in the 19th-century dime store world. The company was founded by S.S. Kresge, a salesman who sold products to Frank Winfield Woolworth, head of a chain of variety stores that bore his name.

The beginning

Legend has it that Kresge invested $6,700 of his savings to become a partner in a Memphis, Tenn., dime store. When a second store was opened in Detroit, the stores became the first of the S.S. Kresge chain of dime stores.

By 1912, S.S.Kresge operated 85 U.S. stores. By 1940, there were 682 stores operating coast to coast.

The company planned to open a larger S.S. Kresge store on San Fernando, Calif., in late 1961 but late in the process branded the 27,000 square foot store as Kmart, opening on January 25, 1962. On March 1 of that year, the first full-size Kmart opened in Garden City, Mich.

Three months later, the first Walmart store opened its doors and the two discounters would compete for the next six decades before the Arkansas-based chain slowly overtook its older rival.

Earlier this year, Bed Bath & Beyond announced that it would file for bankruptcy and close and liquidate all of its brick-and-mortar stores. 

Just a few months later, Overstock.com acquired the Bed Bath & Beyond name, and they’ve now launched the new Bed Bath & Beyond mobile app and website. 

The website, which can be found at bedbathandbeyond.com, features both the traditional BB&B logo and the Overstock logo, and assures shoppers that this will be a “bigger, better beyond.” The mobile app will also be rebranded to Bed Bath & Beyond by Overstock. 

“Bed Bath & Beyond is back with a new website and app where you’ll find the quality items you know and love,” the website explains. “And now we’re offering an even bigger ‘beyond’ with a wide selection of furniture, decor, rugs, and more to help you create the home of your dreams.” 

Expect deals and savings

The deals and discounts that shoppers have come to expect from both Bed Bath & Beyond and Overstock are easy to find on the new website and mobile app. 

For starters, the website boasts a 25% off coupon for downloading the new app and making your first purchase from that platform. There is also an “exclusive discount” of 12% off your purchase, and subscribing to the email list nets a 10% off coupon. 

Some of the other big deals include: 

• 15% off select Lucid mattresses

• 20% off select Bush furniture

• 20% off select Christopher Knight patio furniture

• Back-to-college items from $19

• Kitchen essentials from $39

• Extra 20% off area rugs by Artistic Weaver, bedding, and bath 

• 15% off select furniture 

Making the most of rewards programs

Overstock’s former loyalty program was “Club O,” which has transitioned to Welcome Rewards for the new Bed Bath & Beyond launch. Former Club O members will log into Welcome Rewards with their same username and password, while old Bed Bath & Beyond rewards members will need to activate a new account with the same email address. 

There are also benefits for members of both old rewards programs. Bed & Bath & Beyond rewards members will receive up to $50 in unused rewards points to their accounts, while former Overstock rewards members will receive a 20% off coupon. 

Welcome Rewards costs members $19.95 per year, and the program comes with exclusive benefits designed to save consumers money.

Each purchase yields 5% points for every $1 spent, all purchases are eligible for free returns, members earn up to 40% in extra rewards when purchasing from the Extra Rewards Store, and more. 

National discount chain Tuesday Morning has announced it is closing all of its stores and going out of business. It’s just the latest move in the struggling home furnishings retailer’s downward spiral.

In December, the company voluntarily delisted from the Nasdaq stock exchange when it could no longer meet financial requirements. Earlier this year it filed for Chapter 11 bankruptcy protection.

For shoppers, it could be an opportunity to scoop up some bargains. The company’s website has announced “everything must go” and merchandise has been marked down by up to 30%.

Use gift cards now

Consumers who have Tuesday Morning gift cards should plan to use them right away. The company says gift cards and returns will not be accepted after Saturday, May 13.

With a goal of liquidating all merchandise, the sales event offers a variety of discounted home décor – things like bedding, bath, furniture, lamps, and kitchen. These sales also offer a large assortment of toys, pet supplies, luggage, beauty, crafts, and seasonal decorations.

Bankruptcy filings among retailers have begun to pile up this year as interest rates rise and the industry adjusts to the post-pandemic economy. Bed Bath & Beyond recently filed for bankruptcy, as did David’s Bridal and Party City.

Tuesday Morning did not offer a timetable for closing all of its stores in 25 states. A complete list of the stores that will close is contained in the company’s press release.

Two rival retailers are throwing a lifeline to consumers stuck with expiring Bed Bath & Beyond coupons. After a prolonged struggle, the home goods chain recently announced that it was filing for bankruptcy and would be liquidating its brick-and-mortar and online inventory. 

As part of this process, shoppers had until Wednesday, April 26 to use any of their remaining coupons either online or in-store at the retailer. 

Now, The Container Store and Big Lots have announced that they will accept Bed Bath & Beyond coupons for the coming weeks. The Container Store will accept coupons for 20% off a single item through May 31, while Big Lots will be accepting coupons for 20% off orders of $50 or more through May 7. 

“So. Much. NEW,” The Container Store tweeted on Wednesday, April 26. “Bring in a blue coupon."

David’s Bridal, one of the largest providers of wedding gowns and formal wear, is declaring bankruptcy for the second time in five years. It is also laying off nearly 10,000 employees nationwide and putting the company up for sale.

But the company went out of its way to assure brides planning their wedding that their orders are safe. The company said its stores will remain open and it plans to fulfill “all customer orders without disruption or delay.”

David’s Bridal online platforms, including its Pearl platform and vendor marketplace, remain available and accessible to brides for their wedding planning needs, company executives said. Loyalty rewards members can continue earning and redeeming rewards and the company said it will also continue honoring gift cards as it seeks a buyer for the chain.

James Marcum, David's Bridal CEO, said the company was severely impacted by the COVID-19 pandemic and it has struggled to recover.

“Our business continues to be challenged by the post-COVID environment and uncertain economic conditions, leading us to take this step to identify a buyer who can continue to operate our business going forward,” Marcum said. “We are determined to stay focused on our future because we believe we have an important role in ensuring that every bride, no matter her budget, can have her perfect dress."

Growing budget problems

Before the bankruptcy announcement, David’s Bridal began an evaluation of a wide range of strategic alternatives to maximize value for all stakeholders, including a marketing and sale process for its assets. In light of its liquidity constraints, the company said it was unable to finalize its marketing and sale process out of court and intends to continue exploring a sale of all or some of its assets pursuant to section 363 of the Bankruptcy Code.

"We are grateful to the seven decades of brides and customers who have trusted us with the most special events of their lives, as well as to the dedicated associates and valued partners who make our customers' dreams come true,” Marcum said. “We remain as committed as ever to providing excellent service, delivering for our brides and customers, and being part of magical moments."

Over 100 Sears Hometown stores across the country are closing for good, and this translates into major savings for shoppers. 

Consumers who have been thinking about making any big home appliance purchases may want to head to their closest Sears Hometown store to compare prices as company officials have said that there is nearly $40 million in inventory that needs to be sold – all at a significant discount. 

“This truly is an extraordinary buying opportunity for communities across America,” said Arnold L. Jacobs, executive managing director at Tiger Capital Group, one of the companies working on the final sales for Sears Hometown stores. “These 8,000 to 10,000 square-foot stores are filled with in-demand tools and home appliances. 

“It’s everything from Craftsman socket sets, Workpro power tools, and Kenmore washing machines to Honda riding lawnmowers, Eureka vacuum cleaners, and DieHard tool cabinets. As compared to the original price, the discounts are as high as 40 percent. That can go even higher in the case of floor models and scratch-and-dent models.” 

Making big purchases for less

There are currently 115 Sears Hometown stores still open across 36 states and Puerto Rico. Arkansas tops the list of states with the greatest number of such stores with a dozen. 

However, other states with Sears Hometown stores – and these liquidation sales – include: Alabama, Arizona, California, Colorado, Delaware, Florida, Georgia, Iowa, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland, Maine, Michigan, Minnesota, Missouri, Mississippi, Montana, North Carolina, Nebraska, New Mexico, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Tennessee, Texas, Vermont, Washington, Wisconsin, and Wyoming. A full list of stores is available here. 

While three companies are handling the final sales at Sears Hometown stores – Tiger Capital Group, SB360 Capital Partners, and B. Riley Solutions -- consumers can expect to have all of their appliance questions answered by local store associates. In addition, shoppers can protect their purchases with warranties from outside companies. 

“These sales also come at a time of high inflation and continuing supply-chain disruptions, making them all the more relevant for American consumers,” said Siegried A. Schaffer, COO of SB360. “The home appliances, tools, and other products by Sears Hometown are everyday necessities for most households, and with today’s economic environment, every bit helps.” 

As COVID-19’s Omicron variant continues to impact nearly every aspect of American life, small restaurant operators are headed back to Capitol Hill to ask for financial help. Industry officials say they need help dealing with higher costs and less revenue from diners who are nervous about dining out. 

Things are so bad that more than 3,000 restaurant owners wrote U.S. lawmakers to say they were in danger of closing down for good if the Restaurant Revitalization Fund (RRF) isn't refilled soon.

"I can't go into further debt to salvage this restaurant," Dwayne Allen, owner of the Breadfruit & Rum Bar in Phoenix, told FoodMarket. Allen said he had to close his restaurant for long stretches during the pandemic, which forced him to fall behind on paying his rent. When his landlord left him with no other option, Allen said he had to take out a $48,000 loan to keep the doors open.

Hoping that their support adds some validation and muscle to the situation, the mayors of 27 U.S. cities have come out in full support of small restaurant operators to urge Congress to refill the Restaurant Revitalization Fund.

In a new letter sent just last week, the mayors – who represent over 16 million Americans from Boston to Seattle – argue that not giving restaurants relief would be “catastrophic.” They emphasized that the Omicron variant is “causing more strife for restaurants and bars in such peril that they might not survive the winter.”

The consequence for consumers

As restaurateurs try to find ways to make ends meet, consumers are getting caught in the pinch. Customers are encountering issues ranging from missing menu items to long waits to get their meals.

In Knoxville, Tenn., one DoorDash driver told Reuters that he’s been sitting in drive-thru lines at fast-food chains for as long as 30 minutes since December. He noted that McDonald’s, Taco  Bell, and Chick-fil-A all recently started putting up signs warning customers and delivery drivers of longer wait times because of labor shortages. Diners shouldn’t be surprised if some of their favorite menu items go missing.

“We took our sampler off the menu at many locations because it became a bottleneck for the kitchen,” said Brandon Wright, co-owner of Hamburger Mary’s International. “Some of the items on the platter had different cooking times, which took a lot of effort to coordinate. This often resulted in longer ticket times.” 

But the National Restaurant Association (NRA) says the main reason why menu items go missing is due to supply chain issues. In a recent survey, 75% of restaurants stated that they have had to change menu items in recent months as a result of supply chain challenges. 

The biggest hit is being felt by indoor dining operators. The study found that 88% of fine dining operators and 81% of casual dining operators said they had to change their menus because of food supply delays or shortages.

Drug store chain CVS Health has announced a new strategy that calls for it to reduce its footprint, closing 900 stores in the next three years. The company did not disclose which stores would be closed.

CVS said it is changing its strategy to better align with evolving consumer needs. The shift will also result in new store formats “to drive higher engagement with consumers.” In the future, there will be three different models of CVS stores.

Some will be dedicated to offering primary care services through walk-in clinics. There will also be an enhanced version of HealthHUB locations, featuring products and services designed for everyday health and wellness needs.

Finally, there will be the traditional CVS Pharmacy locations that current customers are familiar with. These stores will provide a range of health services like prescriptions, health, wellness, personal care, and other retail offerings.

"Our retail stores are fundamental to our strategy and who we are as a company," said Karen Lynch, CEO of CVS Health. "We remain focused on the competitive advantage provided by our presence in thousands of communities across the country, which complements our rapidly expanding digital presence."

Evaluating changes

CVS said it has been evaluating changes in population, consumer buying patterns, and future health needs to ensure it has the right kinds of stores in the right locations for consumers. The announced changes coincide with a recent increase in 1-star reviews from consumers posting comments at ConsumerAffairs, many of which complain about service at pharmacies.

Marlene, of Brooklyn, N.Y., says she is a health care provider and thinks her local CVS store is taking on more than it is able to handle.

“Try calling in patient’s blood pressure prescription all day… 2 days back to back…CVS Linden… Keep holding forever and no pharmacist came to the phone. I have to hang up,” Marlene wrote in a ConsumerAffairs review. “If you want to act like Urgent care, a clinic or a hospital… You have to take on Labor!!!”

As part of its new strategy, CVS said it plans to reduce store density in certain locations. To accomplish that, it will shutter 300 locations a year for three years. Employees at closed stores will be offered roles in other locations or different opportunities as part of its overall workforce strategy.

After pulling itself out of the bankruptcy heap and relaunching its brand, Toys "R" Us is once again Toys R’nt Us. The once legendary chain is officially closing its last two remaining U.S. stores for good.

Tru Kids Inc., the company that owns the Toys "R" Us and Babies "R" Us brands in the United States, confirmed that its locations in Paramus, New Jersey and Houston, Texas have permanently closed due to financial losses related to the COVID-19 pandemic.

"As a result of Covid-19, we made the strategic decision to pivot our store strategy to new locations and platforms that have better traffic," a Tru Kids spokesperson told CNN Business. 

The online version is still operational

Tru Kids added that demand for the brand "remains strong" thanks to its fully-operational 700+ stores and e-commerce sites outside the U.S. It says the company will continue to invest in “the channels where the customer wants to experience our brand.”

In short, the “channel” for stateside toy buyers will be online. The Toys “R” Us website will continue, albeit dependent on Amazon and other retail partners to sell and fulfill purchases. 

It’s pretty much a no-lose, all gravy opportunity. Toys “R” Us’ online site is driven by content and doesn’t have to worry about warehousing, staffing, or returns. As an Amazon Associate, Toys “R” Us earns a piece of each qualifying purchase.

Macy’s is reportedly planning to close another 45 stores in the first half of 2021 as the struggling retailer fights to overcome the headwinds from the coronavirus (COVID-19) pandemic.

CNBC reports that the closings are part of a plan Macy’s announced last year to reduce its brick-and-mortar footprint by as many as 145 stores by 2023. The latest report suggests that as many as a third of the closings will come in the next six months.

A Macy’s spokeswoman told CNBC that the retail chain is “rightsizing” its fleet of stores by looking closely at mall locations across the U.S.

“To that end, we announced several store closures today that align to the guidance we provided in February 2020,” she said. “These closures bring us closer to achieving the right mix of mall-based stores.”

Pandemic speeds up downsizing

Malls have been in slow decline for several years, but the pandemic is speeding up that trend. Restrictions in some areas have kept people away. Even in the absence of restrictions, many consumers have avoided enclosed spaces since the pandemic began in March.

Macy’s announced its plan for a shrinking footprint 11 months ago, just as coronavirus cases began to appear in the U.S. 

“We have a clear vision of where Macy’s, Inc. and our brands, Macy’s, Bloomingdale’s and Bluemercury, fit into retail today,” Jeff Gennette, chairman and CEO at Macy’s, said at the time. “We are confident in our Polaris strategy, and we have the resources required to return Macy’s, Inc. to sustainable, profitable growth.”

Focus on shopping malls

The Polaris strategy involves analyzing shopping malls across the country and deciding where Macy’s wants to continue a physical presence. Presumably, most (if not all) of the store closings this year will create empty spaces at malls across the U.S.

Since March, Macy’s has shifted much of its focus to its online channel, seeking to boost digital sales as foot traffic in its stores continued a downward trend. 

According to the industry publication Digital Commerce, Macy’s online sales grew 27 percent in the third quarter of 2020. But that was a decline from the second quarter of the year, when online sales were up 53 percent in the early days of the pandemic.

The COVID-19 pandemic has turned the relationship between food producers and consumers on its head. Shortages of products like meat pushed more plant-based products into grocery carts, and sit-down restaurants took it on the chin because of mandated closings while their drive-thru competitors and food delivery services prospered.

Will 2021 be more of the same or a whole new narrative? That’s a tough question, but it’s safe to bet that COVID-19 concerns and restrictions will play a hand in the world’s new normal as we enter the new year. 

Better, cleaner, and more streamlined for the consumer

Food industry consulting firm Technomic and food processor ADM predict several game-changing -- if not eye-opening -- food industry shifts for 2021. They include: 

Streamlining of menus. No matter where they’re located, Technomic says that restaurants are expected to focus on core menu items while, in some cases, revamping them as “new and improved” with higher-quality ingredients. Eateries may also launch “safer” limited time offers with ingredients they already have on hand. 

Better-for you, local, and clean-label items. Technomic also sees a shift toward better-for-you, local, and clean-label menu items. “Clean-label,” you ask? It basically means making a product with as few ingredients as possible, with the goal of making sure those ingredients are things that consumers are familiar with and consider to be wholesome. 

The whole wellness trend plays into that by creating new opportunities for nutrient-dense products with real health benefits. In its take on the subject, ADM went as far as saying that sensory factors like flavor and color -- such as colors that indicate a vitamin C-like citrus flavor -- will also play a key role. 

“The global health crisis has changed consumer preferences in new and unexpected ways,” says Vince Macciocchi, president, Nutrition, at ADM. “We are seeing a heightened demand for foods and beverages that support immune systems, enhance our mood and reduce our environmental impact, driven in part by emerging human tensions. This has provided a unique opportunity for brands to develop disruptive new products that will forever change the way we eat and drink. It’s going to be a year of innovation, marked by significant breakthroughs in nutrition.”

Socially aware. With social unrest paralleling the pandemic in 2020’s news cycle, greater emphasis on social justice issues can be expected of restaurants in 2021, says Technomic. That means consumers will be making sure that a restaurant is talking the talk and walking the walk when it says it’s actually making an effort regarding fairness and inclusion and not throwing out a bunch of buzzwords and hashtags.

Improved sanitation. Technomic says to look for more investments in contactless technology for sanitation and ease of use on the consumer side.

Foreign foodie delights. Due to travel restrictions, Technomic says to expect a renewed interest in Italian, Mexican, and Chinese menu items.

Enter Umami. While Umami isn’t exactly a household name, Technomic predicts that it will start showing up in foodie circle discussions. Umami is not a “thing,” but rather a Japanese term for “savory.” In Japanese food culture, it is one of the five basic tastes and is characteristic of broths and cooked meats. Technomic’s take is that umami will start showing up in fruit vinegars, new mushrooms, protein swaps, and tomato jam. The company also thinks that chefs will jump on board because umami gives them a new way to plate recognizable umami ingredients.

More plant-based foods. Whether you’re ready for it or not, plant-based food production isn’t stopping at veggie burgers and tofu turkey. ADM predicts that the plant-based shelves will add alternatives to products like steak and chicken breast, lunch meat, and bacon. However, they’re not stopping there. Food producers are also planning to go as far beyond the bun as possible to create more novel alternatives like shellfish and shrimp, plant-based cheeses, and ready-to-eat protein snacks.

A bankruptcy court in Richmond, Va., has approved a deal giving new life to Ann Taylor and several other apparel brands. A judge approved the sale by Ascena Retail Group to Sycamore Partners, which will keep more than half of the stores open.

Judge Kevin Huennekens approved the sale of Ascena Retail Group’s assets to Sycamore for $540 million. The private equity firm will also assume Ascena’s debt and other liabilities, raising the price of the sale to around $1 billion.

In addition to Ann Taylor, the purchaser will acquire the bankrupt retail operator’s other brands, including Lane Bryant, Lou & Grey, and Loft. The deal is expected to close next week.

“This is a pretty marvelous transaction and I just wanted to applaud all of you for putting this together and getting this done,” Huennekens said during Tuesday’s hearing, which was held virtually.

Ascena Retail Group was another victim of the coronavirus (COVID-19) pandemic, declaring bankruptcy in July. At the time, it operated nearly 2,800 stores. During its restructuring process, it closed underperforming locations, reducing its footprint.

At least 900 stores will remain open

At the time of the hearing, Ascena operated approximately 1,500 stores. Sycamore Partners has said it plans to maintain at least 900 locations.

At Tuesday’s hearing, Steven Serajeddini, a lawyer representing Ascena, praised the deal saying Sycamore Partners is an experienced retail operator that has the best chance to revive the sagging brands.

“We are very thrilled with the result,” he said.

The U.S. Justice Department was less than thrilled with the sale. It raised objections, saying the transaction was approved without a bidding process or auction that might have produced more cash for the bankrupt company’s creditors.

Sycamore Partners has purchased a number of distressed retailers in recent years, including Belk and Talbots. It also purchased Staples for $6.9 billion in June 2017.

Guitar Center is the latest business to seek bankruptcy protection as the coronavirus (COVID-19) pandemic has eroded sales.

The musical instrument retailer has filed petitions for reorganization pursuant to Chapter 11 in the United States Bankruptcy Court of the Eastern District of Virginia.

The company says Chapter 11 status is the final piece in its turnaround plan. It says it has secured new financing and has the support of its investors. The plan calls for deleveraging the balance sheet and injecting more cash so it can continue to pay its vendors, suppliers, and employees.

“This is an important and positive step in our process to significantly reduce our debt and enhance our ability to reinvest in our business to support long-term growth,” said Ron Japinga, CEO of Guitar Center. “Throughout this process, we will continue to serve our customers and deliver on our mission of putting more music in the world.”

Japinga says the company has received a “strong level of support” from Guitar Centers’ lenders and creditors and expects to complete the bankruptcy process before the end of this year.

Relies heavily on in-person sales

Guitar Center has been especially hard-hit by the pandemic because it relies so heavily on in-person, face-to-face sales encounters. Consumers considering the purchase of an expensive musical instrument normally want to see and touch it.

When the pandemic hit with full force in March, the retailer was forced to close 75 percent of its stores during the economic shutdown. Most of its 300 stores have reopened, and the company stresses that it will be business as usual during its bankruptcy.

With Black Friday approaching at the end of the week, Guitar Center is promoting a number of holiday deals that have knocked more than $100 off guitars, amplifiers, and drum kits.

The company joins other national retailers that have declared bankruptcy since March. They include J. Crew, Brooks Brothers, Friendly’s restaurants, Gold’s Gym, Hertz, JC Penney, and Pier 1.

The week has begun with a pair of bankruptcy filings, both likely caused by the economic effects of the coronavirus (COVID-19) pandemic.

CBL & Assoc. Properties, a major mall operator, and Friendly’s (FIC), a family restaurant chain famous for its ice cream, sought Chapter 11 protection in filings on Sunday and early Monday morning, respectively.

CBL & Assoc. Properties filed for bankruptcy protection after some of its biggest tenants, such as JC Penney, had done the same and stopped paying rent. Mall traffic has plunged since March when the pandemic closed most stores and required mitigation measures like social distancing after they reopened.

Malls have also suffered because of the pandemic-induced shift to online shopping. With most consumers seeking to have purchases delivered, brick-and-mortar stores without a robust online channel have suffered.

The company told the bankruptcy court in South Texas the filing will allow it to reorganize and wait out the pandemic. A filing shows its assets and liability and about even -- between $1 billion and $10 billion each. The company manages 108 properties in 26 states.

Take-out and delivery hurt ice cream sales

Friendly’s, a chain operating mostly on the East Coast, has struggled since the pandemic limited most restaurants to take out and delivery -- something that doesn’t work so well with ice cream. In a news release, the company said it will seek permission from the bankruptcy court in Delaware to sell most of its assets to Amici, a major restaurant operator.

"Nearly all of Friendly's 130 corporate-owned and franchised restaurant locations are expected to remain open subject to COVID-19 limitations, and the transaction is expected to preserve thousands of corporate-owned restaurant team member and franchisee jobs," the company said.

In its filing, Friendly's Restaurants LLC estimated its liabilities at $50 million to $100 million and estimated its assets at $1 million to $10 million. The company said it has enough cash on hand to continue operations and pay its employees and suppliers.

Ruby Tuesday filed for Chapter 11 bankruptcy protection on Wednesday and announced that it will be permanently closing 185 restaurants.

The restaurant chain said the challenges that it and other sit-down dining chains have battled in recent years have only been exacerbated by the pandemic. The company said it remains hopeful that its restructuring efforts will help it bounce back.

“This announcement does not mean ‘Goodbye, Ruby Tuesday,'"  CEO Shawn Lederman said in a statement. "Today’s actions will allow us an opportunity to reposition the company for long-term stability as we recover from the unprecedented impact of COVID-19."

Impact of COVID-19 

The pandemic has had a drastic impact on Ruby Tuesday’s operations. Previously, 90 percent of its sales came from dine-in business.

While other restaurant chains swiftly implemented new COVID-19 protocols, Ruby Tuesday wasn’t as quick to do so. The company’s efforts to adapt to the current conditions included launching “virtual kitchens,” expanding delivery and takeout, and selling raw food on its website. 

But Lederman said sales have remained poor, especially at the chain’s mall locations. In a court filing, Lederman said that the company was “not immune to the overall shift in customer spending from casual dining to fast food and fast casual.”

Ruby Tuesday said it has "reached an understanding with its secured lenders to support its restructuring." After closing 185 restaurants, the chain will have 236 remaining company-owned and operated locations. 

The company has nearly $43 million in senior debt. In 2020, Ruby Tuesday tried to avoid bankruptcy by renegotiating leases and loan agreements and cutting corporate costs, according to a court filing.

You can add another name to the coronavirus-driven pile of businesses biting the dust. On Thursday, off-price retailer Century 21 Stores announced plans to start a sell-off of its current inventory followed by the closure of its 13 stores in Florida, New Jersey, New York, and Pennsylvania.

The chain has no connection to Century 21, the real estate company, or 21st Century, the insurance company.

Rebounding from 9/11 was easier than the pandemic

The decision follows nonpayment of policies by the company’s insurers that had been put in place to protect against losses stemming from business interruption during the COVID-19 pandemic.

"While insurance money helped us to rebuild after suffering the devastating impact of 9/11, we now have no viable alternative but to begin the closure of our beloved family business because our insurers, to whom we have paid significant premiums every year for protection against unforeseen circumstances like we are experiencing today, have turned their backs on us at this most critical time," said Century 21 co-CEO Raymond Gindi. 

"While retailers across the board have suffered greatly due to COVID-19, and Century 21 is no exception, we are confident that had we received any meaningful portion of the insurance proceeds, we would have been able to save thousands of jobs and weather the storm, in hopes of another incredible recovery."

Bargains remain

Things like bankruptcies and business closings take time. In its announcement, the company said that shoppers will be able to take advantage of even deeper discounts throughout the stores and, for a limited time, online at c21stores.com. 

For Century 21 devotees, the company has put together a list of FAQs to help answer questions pertaining to sales, payments, rewards programs, and more. 

Two major shopping mall owners, likely alarmed at the possible liquidation of JCPenney stores that serve as mall anchors, have stepped in to buy the bankrupt retailer, according to a law firm handling the deal.

An attorney for Kirkland & Ellis says Simon Property Group and Brookfield Property Partners are putting the final touches on their offer of $800 million for the chain that declared bankruptcy in May after the coronavirus (COVID-19) pandemic sent its already-declining sales into a freefall.

Attorney Joshua Sussberg told a court hearing that the rescue package will keep JCPenney operating in 650 stores and save about 70,000 jobs.

The complex deal will give some hedge funds that loaned money to the retailer ownership of some JCPenney assets, including select stores and distribution centers. In return, the department store chain will be relieved of some of its $5 billion debt obligation.

Also part of the deal, Wells Fargo will extend a $2 billion credit line, leaving JCPenney with a significantly smaller debt load and about $1 billion in cash.

Previously, Sycamore Partners, parent company of Belks, was seen as a potential buyer. In July published reports suggested Sycamore Partners would purchase JC Penney and merge some of its stores with the smaller chain.

Existential threat

When it declared bankruptcy in May, JCPenney said it would close some of the 846 stores it had at the time. The potential loss of all JCPenney stores was viewed as an existential threat by the shopping mall industry, already suffering huge losses in foot traffic and dependent on its anchors, like JCPenney, Macy’s, and Sears to attract shoppers.

The shift to online shopping during the pandemic has only made malls’ position in the marketplace more precarious. 

A report in PYMNTS.COM in April summed up the problem for shopping malls, whose problems had suddenly been made worse.

“Part of it is the public psyche,” University of Maryland marketing professor Jie Zhang told the industry publication. “This virus is likely not going to go away any time soon, and the one type of place where people will be much more vigilant about avoiding in the longer term will be those crowded, enclosed spaces. And that’s exactly what traditional shopping malls are.”

Sussberg told the court the deal took a while to complete because of the large number of players and their competing interests. The sale proposal will be presented to the bankruptcy court for final approval.

Pizza hut is closing 300 of its U.S. restaurant locations after one of its largest franchisees declared bankruptcy in July. NPC International is closing about 25 percent of its restaurants and has agreed to sell the rest. A timeframe for the closings has not yet been announced.

It may seem odd that pizza restaurants would be shutting down at a time when pizza sales are booming -- sales are so strong that there’s now a pepperoni shortage -- but it turns out some kinds of pizza restaurants are doing better than others.

A spokesperson for NPC International said “a substantial majority” of the locations targeted for closing have dining rooms. Until recently, restaurant dining rooms have been closed due to the coronavirus (COVID-19), and these Pizza Hut locations have been relying on take-out business. Pizza chains like Domino’s, built around home delivery, have thrived during the pandemic.

Significant blow

The NPC International bankruptcy is a significant blow for the brand. The company is Pizza Hut’s largest franchisee in the U.S., operating 1,227 locations. That represents 20 percent of Pizza Hut’s U.S. restaurant base.

“We have continued to work with NPC and its lenders to optimize NPC’s Pizza Hut restaurant footprint and strengthen the portfolio for the future, and today’s joint agreement to close up to 300 NPC Pizza Hut restaurants is an important step toward a healthier business,” Pizza Hut, owned by Yum! Brands, said in a statement.

NPC International employs approximately 23,000 people, producing more than 68 million pizzas to consumers in 27 states. NPC has been a pizza restaurant franchisee for nearly 60 years. It joins 43 other retailers, mostly department stores and apparel retailers, that have declared bankruptcy since the beginning of 2020. 

CNBC reported in July that the franchisees operating fast-food restaurants are struggling. CEC Entertainment, the parent company of Chuck E. Cheese restaurants, filed for Chapter 11 bankruptcy protection in June.

Another retailer is closing up shop due to the coronavirus pandemic. On Wednesday, Stein Mart announced that it plans to file for Chapter 11 bankruptcy and will be closing “a significant portion” of its stores as it seeks to reorganize its business.

As is typical with Chapter 11 filings, the company will continue to maintain its operations for now and meet financial responsibilities like paying employees, suppliers, and vendors. However, officials say they may sell the ecommerce branch of the company and any intellectual property during the course of its liquidation process.

“The combined effects of a challenging retail environment coupled with the impact of the Coronavirus (COVID-19) pandemic have caused significant financial distress on our business,” said CEO Hunt Hawkins. 

“The Company has determined that the best strategy to maximize value will be a liquidation of its assets pursuant to an organized going out of business sale. The Company lacks sufficient liquidity to continue operating in the ordinary course of business. I would like to thank all of our employees for their dedication and support.”

Stein Mart joins a growing list of retailers that have also filed for bankruptcy and closed stores over the last several months. This includes major names like JCPenney, Ann Taylor, J. Crew, GNC, and Chuck E. Cheese. Stein Mart was founded in 1902 and currently operates 281 stores in 30 states across the U.S. 

JCPenney, one of the U.S. retailers thrown into bankruptcy by the coronavirus (COVID-19), will reportedly merge with Belks, a retailer with 300 stores, mostly in southern states.

The New York Post quotes sources close to the deal as saying that Sycamore Partners, a private equity firm, has submitted the highest bid for JCPenney in a bankruptcy auction. The firm, which owns Belks, also owns retailers Talbots, Staples, and The Limited.

Like JCPenney, Belks has also been struggling amid declining sales during the pandemic. Both were facing difficulty even before the virus struck, as consumer preferences changed and more shopping moved to online channels.

“JCP is the lifeboat for Belks, which wants to compete with Macy’s nationally,” the source told the Post.

All three bids are close

According to the newspaper, Sycamore Partners will likely land the 118-year-old retailer with a bid of $1.75 billion. The Post’s sources said Saks Fifth Avenue owner Hudson’s Bay Company is also still in the running with a $1.7 billion bid along with a pair of mall operators that offered $1.65 billion. 

“The three bids are being analyzed and because there’s not a big difference between them, it means that all three are seeing a similar valuation,” a source told the Post. It will be up to the bankruptcy court to decide which firm acquires the retailer.

At last report, JCPenney operated 850 stores in 49 states and Puerto Rico. It filed for bankruptcy in May after temporarily closing most of its stores. Its stores serve as anchors at many malls across the U.S., and the department store’s fate was seen as critical to the future of many malls.

A combination with Belks could give the combined enterprise a much larger footprint. Due to the challenges facing retail, the sources told the Post that Sycamore Partners planned to rebrand 250 JCPenney stores as Belks and liquidate the rest.

Sycamore Partners offered $1 billion for a major stake in Victoria’s Secret before the pandemic struck but backed away from the deal as the U.S. economy shut down, accusing the firm’s owner of violating the terms of the agreement.

The pandemic has resulted in a wave of bankruptcies in the retail industry. Besides JCPenney,  J. Crew, Neiman Marcus, Brooks Brothers, and New York & Company have filed for Chapter 11 protection in the last four months.

The parent company of Ann Taylor, LOFT, Lane Bryant, Justice, Catherines, and Lou & Grey -- ascena retail group, inc. -- is the latest retailer to take a fall from the COVID-19 pandemic and file for Chapter 11 bankruptcy protection.

Those stores aren’t going away, however. Chapter 11 simply allows ascena to restructure its agreements with its lenders. Currently, the company is operating with close to 95 percent of its 2,764 stores reopened and serving customers in those stores and through its e-commerce brand websites. Ascena says it will use the safety and well-being of its associates and customers as a benchmark for the future of its operations.

“The meaningful progress we have made driving sustainable growth, improving our operating margins and strengthening our financial foundation has been severely disrupted by the COVID-19 pandemic. As a result, we took a strategic step forward today to protect the future of the business for all of our stakeholders,” said Carrie Teffner, Interim Executive Chair of ascena. 

What changes and what stays the same

As part of the restructuring, ascena says two major steps will be taken. Firstly, it will optimize its brand portfolio. Secondly, it will reduce its footprint by closing a “significant number” of Justice stores and a “select number” of Ann Taylor, LOFT, Lane Bryant, and Lou & Grey stores. 

The company said in its announcement that it is getting completely out of Canada, Puerto Rico, Mexico, and will be getting out of the plus-size business altogether by closing all of its Catherines stores.

Another one bites the dust

The coronavirus has thrown quite the bankruptcy pity party. Besides ascena, the pandemic is also playing host to other major apparel retailers like J.Crew, JCPenney, Neiman Marcus, and Brooks Brothers which, collectively, account for thousands of shuttered stores.

“It will take more than store closures to ensure the long-term survival of these brands,” GlobalData Retail Managing Director Neil Saunders said in a note to clients about Ascena. “In our view, a label like Ann Taylor does not have a very clear sense of identity. Its proposition lacks both clarity and relevance and, as a result, it is all too easy to overlook.” 

RTW Retailwinds, Inc., an omnichannel specialty apparel retail platform for New York & Company and several other brands, has filed for Chapter 11 bankruptcy protection. The company represents yet another retail victim of the coronavirus (COVID-19 pandemic that has thrown the economy into a recession.

Besides New York & Company, the company’s brands include Fashion to Figure and Kate Hudson’s fashion line Happy x Nature.

In announcing its bankruptcy filing, the company said it will likely “close most, if not all” of its 400 retail stores in 32 states and has already begun that process. It said it has sought permission from the bankruptcy court to maintain operations in the ordinary course of business.

Like some other retailers that have been forced into bankruptcy over the last four months, RTW Retailwinds was already struggling before the virus forced a shutdown of the U.S. economy in March.  Last year, the company’s revenue declined by more than 7 percent. It went from earning a profit of $4.2 million in 2018 to losing $61.6 million in 2019.

Other pandemic victims

It joins J. Crew, Neiman Marcus, Brooks Brothers, and JCPenney in the bankruptcy club. Not coincidentally, all of those retailers specialize in apparel, which had been in a slow decline for several years before the pandemic caused a huge drop in clothing sales.

“The combined effects of a challenging retail environment coupled with the impact of the Coronavirus pandemic have caused significant financial distress on our business, and we expect it to continue to do so in the future,” said company CEO Sheamus Toal. “As a result, we believe that a restructuring of our liabilities and a potential sale of the business or portions of the business is the best path forward to unlock value.”

New York & Company may have been especially hard-hit by the coronavirus because it specializes in women’s work apparel. With most of the nation’s workforce working from home, clothing sales have suffered.

New York & Company was founded in 1918 as Lerner Shops by Samuel A. Lerner and Harold M. Lane in New York City.

Vitamin and dietary supplement company GNC has filed for bankruptcy. 

GNC cited, among other reasons, the financial toll of the COVID-19 pandemic. Sales at the chain had already been declining before the health crisis, but GNC said stay-home-orders had a “dramatic negative impact” on its business. 

Before the pandemic, the company had nearly $1 billion worth of debt. Its refinancing plans were derailed this year due to the pandemic, but company officials are optimistic that the bankruptcy filing will help to get on a more sustainable track. 

Bankruptcy will give GNC the "opportunity to improve our balance sheet while continuing to advance our business strategy, right-size our corporate store portfolio, and strengthen our brands to protect the long-term sustainability of our company,” the company said in a statement. 

"The Chapter 11 process will allow us to accelerate these strategies and invest in the appropriate areas to evolve in the future, while improving our capital structure and balance sheet.”

Closing nearly a quarter of stores 

GNC aims to emerge from bankruptcy in the fall “better positioned to meet the strong consumer demand for health and wellness products by executing on omnichannel and brand strategies.” In the meantime, it’s closing up to 20 percent of its stores (up to 1,200 stores) and looking for a buyer. 

“GNC remains committed to delivering wellness solutions to its consumers through easier and enhanced options to live well, from a strong product pipeline to an improved e-commerce experience,” the company said, adding that it will be launching the option to buy online and pick-up in-store later this year. 

A number of other retailers have filed for bankruptcy in the wake of the unexpected health crisis. Last month, J.C. Penney, J.Crew, Neiman Marcus, and Stage Stores (SSI) all filed for bankruptcy due to a significant decrease in sales. 

Hertz, which even its closest rival once acknowledged as the number one rental car firm, has filed for Chapter 11 bankruptcy protection in a Delaware court.

The company said the sudden impact of the coronavirus (COVID-19) on the travel business had caused a big drop in company revenue and bookings. 

“Hertz took immediate actions to prioritize the health and safety of employees and customers, eliminate all non-essential spending and preserve liquidity,” the company said in a statement. “However, uncertainty remains as to when revenue will return and when the used-car market will fully re-open for sales, which necessitated today's action.”

Hertz said the financial reorganization under bankruptcy protection will provide it with a path toward a more “robust financial structure” that puts the company in an optimal position for the future as it rides out what could be a prolonged travel and overall global economic recovery.

Pandemic accelerated the decline

According to The Wall Street Journal, the pandemic simply accelerated Hertz’s decline. It cites what it calls a series of “strategic missteps and other blunders that kept Hertz behind competitors and buried under debt.”

Specifically, it notes that Hertz focused on sedans when it recently replaced its aging fleet of automobiles, which were cheaper but weren’t the SUVs that customers wanted.

“The fleet had aged to the point that we had customer mutiny,” former Hertz Chief Executive John Tague told the Journal. “We were solving the biggest problem, but not solving all the problems.”

Hertz was founded in Chicago in 1918, and it had become the leading car rental agency in the U.S. by the mid-20th century. Rival agency Avis adopted an ad campaign that said “We’re number two, but we try harder.”

Open for business

Despite filing for bankruptcy protection, Hertz says all of its business operations, including its Hertz, Dollar, Thrifty, Firefly, Hertz Car Sales, and Donlen subsidiaries, are open and serving customers. It expects to continue all existing promotional offers, vouchers, and customer and loyalty programs, including rewards points.

Hertz CEO Paul Stone says the company entered the year with strong revenue -- but then in March, travel came to a screeching halt.

"With the severity of the COVID-19 impact on our business, and the uncertainty of when travel and the economy will rebound, we need to take further steps to weather a potentially prolonged recovery,” Stone said. 

Stone said the bankruptcy filing would give Hertz time to put in place a new, stronger financial foundation to move successfully through the pandemic.

Sears, the retail brand now owned by Transformco, continues to get smaller. The company has announced it’s closing another 96 stores after securing $250 million in funding.

Transformco, headed by former Sears CEO Eddie Lampert, acquired the assets of Sears Holdings for $5.2 billion early this year. It took over 450 remaining Sears and Kmart stores.

Lampert’s offer was viewed by some as a way to keep Sears in business while saving at least 45,000 jobs. But not everyone was convinced, and the deal faced a legal challenge from the company’s unsecured creditors -- including manufacturers that had provided inventory and landlords who were owed back rent.

These creditors urged the court to require the bankrupt company to liquidate and sell its assets. Lampert prevailed after claiming he could at least keep 425 stores open and 45,000 people working. So far it hasn’t worked out that way.

Just 182 stores left

After the latest round of closings, which will take place by February, the company will be left with only 182 stores. In another bit of bad timing, the company said it will begin holding “going out of business” sales at affected stores on December 2 while its competitors will still be in the midst of their post-Black Friday sales.

In announcing the move, Transformco said the store closings and $250 million lifeline funding will give the company a chance to refocus on its competitive strengths. But it concedes it must deal with “a difficult retail environment and other challenges.”

Sears has been in a downward spiral since 2011, a year after its last profitable year. Since then Sears has mostly responded to mounting losses by closing stores. In several instances, it sold off some of its longtime brands.

Reasons for the decline

When Sears finally declared bankruptcy a year ago, CNBC identified five factors that led to the retailer’s downfall and the list did not include the retail armageddon brought on by Amazon. The business network said these other missteps proved to be fatal:

1. It diversified too much

2. It merged with Kmart

3. It cut too much

4. It sold good real estate

5. It was run like a hedge fund

At one time, Sears Roebuck and Company was the world’s largest retailer, a title it relinquished to Walmart three decades ago. In 2018, the year it declared bankruptcy, it was the 31st-largest retailer in the U.S., according to the National Retail Federation.

CVS’ downsizing effort that began earlier this year will continue early next year, the company said.

CVS Health will close an additional 22 retail locations in the first quarter of 2020 in its effort to eliminate “underperforming” stores. In May, the pharmacy retailer announced that it was closing 46 retail locations.

CVS announced the additional store closings Wednesday as it reported third-quarter earnings. The company, which acquired health insurance provider Aetna last year, reported that total revenue grew more than 35 percent in the quarter, but it slightly lowered its GAAP operating income guidance going forward.

“As we approach the first anniversary of the Aetna acquisition, we are increasingly confident in the strength of our broad and differentiated assets as a combined company and our ability to deliver compelling value to our customers and the communities we serve,” said Larry Merlo, the company’s CEO. 

Stores that treat chronic health conditions

The Aetna merger and changes to CVS’ business model may be partly responsible for the company’s move to reduce its footprint. The company is on a path of opening what it calls “concept stores” to provide packages of health services.

The company says these concept stores will focus on managing chronic conditions, such as diabetes, asthma, kidney disease, and cardiovascular disease. The company may also look to add more services at its MinuteClinics to help identify and manage chronic diseases.

The move comes at a time when stand-alone retail pharmacies are under increasing pressure from online providers, big box stores, and supermarket pharmacies. It was reported this week that Walgreens has reached out to private equity investors to purchase the company and take it private.

According to CNBC, Walgreens’ stock is down about 22 percent over the past 12 months as both its retail and pharmacy businesses are under competitive pressure. Rite Aid is another pharmacy retailer dealing with a changing pharmacy retail landscape. Two years ago, it explored a merger with Walgreens before both companies backed away over regulatory concerns. 

Fitch recently downgraded Rite Aid stock, citing "continued operational challenges" at the company. Analysts pointed to “heightened questions regarding the company's longer-term market position.”

Roughly a year after filing for bankruptcy, Sears is still having to shutter some of its remaining stores due to disappointing performance.

Citing sources familiar with the matter, the Wall Street Journal reports that about a quarter of the 425 Sears and Kmart stores purchased by former CEO Eddie Lampert have closed already or are slated to close later this year.

Sears said in August when announcing additional store closures that even more closings were possible in the future. The company said it would “continue to evaluate our network of Sears and Kmart stores and cannot rule out additional store closures in the near term.” 

“Our goal remains to return the company to profitability and preserve as many jobs as possible in the communities we serve,” Sears said in a statement.

More store closings 

Lampert received approval from a bankruptcy judge to purchase several hundred Sears and Kmart locations in February, along with the Kenmore and DieHard brands, for about $5.2 billion. However, the Journal reports that 26 of those stores will be closed in the fall due to poor sales performance. Another 100 stores are set to close by the end of 2019. 

The entity under which Lampert purchased the stores, TransformCo, hasn’t said which stores will be closing. 

Since February's bankruptcy deal, Lampert and Sears Holdings have each filed lawsuits against each other. In April, Sears Holdings sued Lampert and his hedge fund ESL investments, claiming they “stripped Sears of billions of dollars of assets.” The following month, Lampert sued Sears Holdings, claiming the firm “imposed undue liabilities on Transform and deprived it of bargained-for assets, funds and other value."

A change in ownership has not stopped the bleeding at Sears. The retailer, acquired by a firm controlled by former CEO Eddie Lampert in February, says it is closing 100 more Sears and Kmart stores.

That’s in addition to the nearly two dozen Sears and Kmart stores already targeted for closing next month. And of course, it follows the shuttering of hundreds of Sears and Kmart stores over the last five years as the venerable retailer struggled against a rising sea of red ink.

At the time, ESL Investments, headed by Lampert, purchased Sears’ remaining assets the company announced that it would retain only about 400 Sears and Kmart stores. It isn’t clear from the announcement whether the 100 set for closing are part of that 400 or had already been designated for elimination at the time of the purchase.

Sears Holdings, the former owner of the brand, filed for bankruptcy protection 11 months ago. It pointed to steep declines in business lost to online shopping channels and rising debt. The following months were marked by a bitter struggle to control the company’s future, with Lampert’s hedge fund emerging as the high bidder.

Opposition to selling to Lampert

Even so, board members and vendors strongly opposed the sale to Lampert, suggesting his leadership as CEO had put the company in its predicament. In making his argument for ownership, Lampert said he could at least preserve some of the stores while saving approximately 68,000 jobs.

Even after the sale was completed, there were lawsuits. The Sears Holdings’ team that was given the responsibility of disposing of Sears’ assets sued Lampert in April, alleging that Lampert destroyed billions of dollars of Sears’ value and drove the company into bankruptcy.

Lampert defended his actions as CEO, saying he was forced to sell assets in a vain attempt to pull Sears out of what he called its “death spiral.” But Sears Holdings, which filed the suit, charges Lampert in effect “gave away the store” in deals that failed to realize the full value of the assets he was selling.

The following month, the new Sears sued the old Sears, claiming that what’s left of the old company -- the Sears estate -- has failed to turn over "hundreds of millions of dollars of assets" called for by the sales agreement.

J.C. Penney, which has been forced to close many of its stores due to disappointing sales in recent years, reported smaller losses in the second quarter, as well as a new partnership with secondhand retailer ThredUp.

The retailer reported a loss of $48 million in the second quarter compared to a loss of $101 million a year earlier, according to Refinitiv. However, revenue was lower than analysts’ expectations of $2.69 billion -- $2.62 billion compared to $2.8 billion a year earlier. 

J.C. Penney and other struggling retailers have been changing their business plans in an attempt to increase foot traffic, which has declined under a sharp increase in online shopping. 

Earlier this year, J.C. Penney announced it would be ceasing sales of appliances and furniture and closing 24 stores as part of its course-correction plan. The decision to free up space in stores by removing appliances and furniture was intended to help it "better meet customer expectations, improve financial performance and drive profitable growth."

Now, the retailer will be carving out space for ThredUp shops at 30 of its stores, which may draw in younger consumers with an interest in sustainable fashion. 

A new in-store experience

“With the rise of online resale markets, there’s no doubt that demand for great value on quality brands is at an all-time high,” said J.C. Penney EVP and chief merchant Michelle Wlazlo during a second quarter conference call. “We’re excited about the prospect of creating a new in-store experience that makes high-end brands attainable, as well as catering to eco-minded consumers who want more sustainable options in their wardrobe.”

J.C. Penney CEO Jill Soltau said she feels “more confident than ever” that the changes the company is undergoing will “reinvigorate and rejuvenate this great company to sustainable, profitable growth."

“We are not simply running a business; we are rebuilding a business,” Soltau said. “The journey we are on will restore health back to our company.”

Macy’s also announced this week that it’s teaming up with ThredUp to offer secondhand women’s clothing and handbags at some of its stores.

It’s a storyline that consumers have become all too used to over the past few years: Sears and Kmart are closing more store locations. 

After being snatched up by former CEO Eddie Lampert earlier this year for $5.2 billion, Sears has continued to struggle financially. On Wednesday, new parent company Transform Co. said that it would be closing 21 Sears locations and 5 Kmart locations that have been unable to meet sustainable productivity levels. 

“Our goal remains to return the company to profitability and preserve as many jobs as possible in the communities we serve,” the company said in a statement.

Liquidation sales for the affected stores are slated to begin in the coming weeks, with closures scheduled to begin in late October. Below is a full list of the closing locations:

Sears not immune to retail apocalypse

Of course, underperforming stores are not just an issue for Sears alone. Brick-and-mortar retailers across the U.S. have struggled to keep up as consumers increasingly turn to online channels to order items. 

Earlier this week, Barneys New York filed for Chapter 11 bankruptcy and announced that it would be closing many of its locations in an attempt to return to profitability. Similar actions taken by Payless and Toys “R” Us also underscore the pervasive problem for American retail giants.

Eddie Lampert stated back in February that company officials would try to shake things up by shrinking the size of Sears and Kmart stores. The executive said that future stores will be about a third of the size of previous stores and focus more on tools and appliances and less on apparel. 

Sears retirees who had life insurance coverage through the company may now receive just $135 each from the now-bankrupt retailer, Bloomberg reports. 

About 29,000 former Sears employees had a life insurance plan through the company, which sold its stores and most of its assets to chairman Eddie Lampert’s hedge fund, ESL Investments, back in January. 

In March, Sears canceled its workers’ life insurance plan and gave them the option to pay for their own life insurance. The terminated plan would have provided death benefits of between $5,000 and $14,500 for workers, but the company now says it doesn’t have enough money to pay the full amount. 

Sears has laid out a new plan that would drastically reduce the amount of money its retirees will receive. Former Sears employees who were slated to receive thousands in benefits could now receive just $115 to $135, according to a court filing.

“The new plan is totally unacceptable to the retirees,” Ronald Olbrysh, chairman of the National Association of Retired Sears Employees, told Bloomberg. “It’s totally unfair, what Sears is attempting to do.”

A hearing on the proposal is set for August 12.

Sears Holdings filed for bankruptcy in October and sold off its assets in February, purchased by former CEO Eddie Lampert for $5 billion. But it seems that’s not the end of the story.

The transition has been marked by lawsuits, the latest filed by Transform Holdco LLC, a subsidiary of Lampert’s ESL Investments Inc., established to acquire and operate for former Sears assets.

At the time of the sale, Lampert said he planned to operate 400 Sears and Kmart stores but also said those stores would be smaller than most of those operated under the old company. The suit comes as that transition is getting underway and claims what’s left of the old company -- the Sears estate -- has failed to turn over "hundreds of millions of dollars of assets" called for by the sales agreement.

As is the case with most litigation, neither party is responding to media requests for comment.

Dueling lawsuits

Transform Holdco’s suit against the Sears estate follows April’s suit against Lampert by some of the stakeholders who are winding down the old Sears operation. That suit charged Lampert is profiting from the mistakes he made while in charge of Sears Holdings. The complaint charges Lampert’s actions destroyed billions of dollars of Sears’ value, driving the company into bankruptcy.

Lampert has defended his actions as CEO, saying he was forced to sell assets in a vain attempt to pull Sears out of what he called its “death spiral.” But Sears Holdings, which filed the suit, charges Lampert in effect “gave away the store” in deals that failed to realize the full value of the assets he was selling.

Lampert’s complaint

Lampert’s suit against the Sears estate accuses the bankrupt entity of breaking the sales agreement in numerous ways. It cites the estate’s decision to retain ownership of the Sears Holdings headquarters in Chicago. Lampert’s company also accuses the Sears estate of delaying agreed-upon payments to vendors.

“Transform believes that prompt resolution of these matters is important and necessary at this time to allow the bankruptcy court and creditors to consider the Defendants’ proposed Chapter 11 plan,'' the complaint maintains.

Meanwhile, the Sears estate will be back in court later today for a hearing on its bankruptcy plan.

Democratic presidential hopeful Sen. Elizabeth Warren (D-Mass.) is putting some heat on Treasury Secretary Steven Mnuchin, citing his time on the board of directors of Sears Holdings, as the retailer sold off assets in a bid to stay afloat.

Mnuchin served on the Sears board until 2016, when he resigned to assume a post in the incoming Trump administration. Prior to that, Mnuchin had a close friendship with Sears Chairman and CEO Eddie Lampert and had been Lampert’s college roommate.

Warren accuses Lampert of mismanaging the company and selling off assets when it did not serve the interests of stakeholders. In a letter, Warren, along with freshman Rep. Alexandria Ocasio-Cortez (D-N.Y), accused the corporate leadership of responding to alleged mismanagement by closing more than 3,500 stores and selling some of the company’s most valuable assets.

2018 bankruptcy

After Sears declared bankruptcy in late 2018, Lampert’s hedge fund, ESL Investments, was the successful bidder in gaining control of the retailer’s remaining assets. Lampert stressed that he planned to keep 400 Sears and Kmart stores open but Warren was not impressed.

“While ESL Investments had operational control of the Sears Holding Corporation, the company engaged in questionable financial engineering and other managerial decisions that enriched executives while decimating Sears' long-term growth and sustainability- ultimately resulting in Sears' bankruptcy and tens of thousands of lost jobs,” she wrote.

Warren claims Lampert loaded Sears with large amounts of debt, contributing to its inability to adapt to a changing retail environment. She notes that in Fiscal Year 2005, the company had a net debt-to-equity ratio of -0.04, and by Fiscal Year 2013, the ratio had ballooned to 1.48-1.

Last month Sears Holdings sued Lampert and former board members, accusing them of “stripping Sears of billions of dollars as it collapsed into bankruptcy." The lawsuit accused the members of the board of "assisting" Lampert in "transferring billions of dollars of the Company's assets to its shareholders" at the expense of the company as a whole.

Cites lawsuit

"In their recent lawsuit, Sears creditors accuse you and five other members of the Sears board of 'assisting' Lampert in 'transferring billions of dollars of the company's assets to its shareholders' at the expense of the company as a whole," the lawmakers said in their letter. "In your current role as treasury secretary, you have had the opportunity to intervene on behalf of Sears and in favor of Lampert's interests."

Warren said she is deeply concerned about what she called the “financial engineering” and “potentially illegal activity” that took place at Sears Holding Corporation during Mnuchin’s tenure on the corporate board.

Sears, which narrowly avoided bankruptcy after chairman Eddie Lampert’s $5.2 billion bid to save the chain was approved, is set to open three “Sears Home & Life” stores in May.

The small, 10-15,000-feet stores will be located in Anchorage, Alaska; Lafayette, Louisiana; and Overland Park, Kansas and will sell both large and small kitchen appliances, mattresses, and tools.

Under the court-approved deal to save Sears, the company was able to retain the Kenmore appliances and Diehard battery brands. It also continues to sell Craftsman tools through licensing partners. The new small-format stores will stock an expanded lineup of the company’s DieHard tools, in new categories such as lawn and garden equipment.

The planned small-format locations will also have kiosks where consumers can order items available online and in the stores and have them delivered either to the store or their home.

Back in February, Lampert hinted that future Sears stores would be smaller. He also said he thought Sears could eventually be a public company again.

“Our goal is to continue to shrink the size of our stores,” Lampert told the Wall Street Journal. “If I had my druthers, I’d rather be bigger than smaller. We still have enough of a critical mass.”

Sears filed for bankruptcy protection in October 2018. Almost two months ago, a bankruptcy judge in New York accepted Lampert’s bid of $5.2 billion to save the struggling retailer’s 425 remaining stores.

J.C. Penney announced Thursday that it plans to shutter 24 stores this year -- 15 of its department stores and nine home-and-furniture locations -- due to disappointing sales.

The retailer said the stores that are slated to be shut down “represent a real estate monetization opportunity.” The chain hasn’t yet released a list of stores that will close.

"Comparable sales performance for the closing stores was significantly below the remaining store base and these stores operate at a much higher expense rate given the lack of productivity," J.C. Penney said in a statement.

"Associates who will be impacted by the store closures will receive separation benefits, which includes assistance identifying other employment opportunities and outplacement services, such as resume writing and interview preparation."

In January, the company announced that it would be closing three of its full-line stores due to poor performance. The following month, the retailer said it would stop selling major appliances in its stores starting February 28 in an effort to "better meet customer expectations, improve financial performance and drive profitable growth."

Course correcting amid online competition

J.C. Penney and other brick-and-mortar retailers have been modifying their business strategies in an effort to align with changing consumer preferences to compete with online shopping channels such as Amazon.

Back in 2017, J.C. Penney said it would be continuing to build its online presence while retaining its physical locations.

“It is essential to retain those locations that present the best expression of the JCPenney brand and function as a seamless extension of the omnichannel experience through online order fulfillment, same-day pick up, exchanges and returns," Marvin R. Ellison, chairman and CEO, said in a statement at the time.

Just recently, J.C. Penney rival Sears narrowly avoided Chapter 11 bankruptcy after it was purchased through the hedge fund of chairman and former CEO Eddie Lampert. However, falling foot traffic and declining sales have forced Sears to close hundreds of locations in recent years.

J.C. Penney is looking to recently appointed CEO, Jill Soltau -- who approved the company’s decision to stop selling appliances and furniture -- to move the chain in a positive direction, and fast.

"The future trajectory of the company will be down to her and success relies upon decisive action with a firm focus on the shopper," Neil Saunders, managing director of GlobalData Retail, told USA Today. "Our main concern is that JCP has very little time to course correct. The business needs to move at pace and without any missteps – a tall order in today’s complex and fast-moving retail environment."

Sears chairman and former CEO Eddie Lampert, whose $5.2 billion bid to buy Sears Holdings through his hedge fund ESL investments was approved earlier this month, told the Wall Street Journal that future Sears and Kmart stores will be smaller than they were in the past.

“Our goal is to continue to shrink the size of our stores,” Lampert told the Journal. “If I had my druthers, I’d rather be bigger than smaller. We still have enough of a critical mass.”

In addition to being about a third of the size that they were before the company went bankrupt, Lampert said future stores will have less apparel and more tools and appliances.

Possibility of becoming a public company

Lampert -- who now owns 425 stores in total (223 Sears and 202 Kmart stores) -- also told the Journal that Sears could eventually go public.

“If I am a betting person, which I am, I would say at some point we would be public again,” Lampert said in the interview.

Sears isn’t the first struggling brick-and-mortar retailer to announce that it’s changing its game plan in an effort to stay afloat. Last week, competitor J.C. Penney announced its decision to stop selling appliances as part of a larger home department reorganization.

The retailer said that removing major appliances would help it "better meet customer expectations, improve financial performance, and drive profitable growth."

Some have expressed skepticism over Sears’ post-bankruptcy revival plan.

“They have a shot, but it’s a long shot,” Craig Johnson, president of consulting firm Customer Growth Partners, told the Journal.

Toys “R” Us announced on Monday that, as of January 20, a new company called Tru Kids took over as the parent of Toys "R" Us, Babies "R" Us, and the company’s former mascot Geoffrey the giraffe.

The retailer, which closed all of its U.S. locations last summer after filing for Chapter 11 bankruptcy protection in March 2018, revealed that Tru Kids will be led by Richard Barry, the former chief merchandising officer of Toys “R” Us.

"Despite unprecedented efforts to capture the US market share this past holiday season, there is still a significant gap and huge consumer demand for the trusted experience that Toys R Us and Babies R Us delivers," Barry said in a statement.

Exploring different strategies

Barry told CNBC that Tru Kids is exploring several business plans, including stand-alone stores and pop-up shops. Updates on the company’s U.S. business strategy are expected soon.

"We have a once-in-a-lifetime opportunity to write the next chapter of Toys’R’Us by launching a newly imagined omni channel retail experience for our beloved brands here in the U.S. In addition, our strong global footprint is led by experienced and passionate operating teams that are 100% focused on growth,” Barry said.

Tru Kids will be opening 70 stores in 2019 in Asia, India, and Europe. The company will focus on growing the Toys “R” Us brand and e-commerce traffic, according to a statement.

"We have an incredible team focused on bringing Toys ‘R’ Us and Babies ‘R’ Us back in a completely new and reimagined way, so the U.S. doesn't have to go through another holiday without these beloved brands," said Barry.

Toys “R” Us was forced to file for bankruptcy last September in the wake of disappointing holiday sales and mounting debt, which ballooned to almost $5 billion. The toy chain fell victim to competition from online retailers like Amazon, as well as brick-and-mortar rivals like Target and Walmart.

In an effort to avoid meeting the same fate as Toys “R” Us, Tru Kids will focus on technology, in-store experiences, and customer service, Barry said.

A bankruptcy judge in New York has brought the Sears saga to an end, ruling that chairman and former CEO Eddie Lampert’s bid to keep the retailer alive -- accepted by the company on January 17 -- is approved.

Lampert’s offer of $5.2 billion for 425 stores was seen as a way to keep Sears in business while saving at least 45,000 jobs. But the deal quickly faced a legal challenge from the company’s unsecured creditors -- including manufacturers that had provided inventory and landlords who were owed back rent.

These creditors told Judge Robert Drain that they would benefit more if the bankrupt company was forced to liquidate and its assets sold at auction. The hearing went on for several days and, at one point, entered the political realm when Sen. Elizabeth Warren (D-Mass.) voiced objections to Lampert taking control of the company.

While Lampert promoted the job-preserving aspects of his buyout plan, Warren voiced skepticism that his rescue plan would be that beneficial for employees, accusing him of “slashing jobs” during his tenure as Sears CEO.

"If your offer is accepted and approved, Sears will remain open and tens of thousands of American workers will keep their jobs in the short term," Warren wrote in a letter to Lampert. "But I am concerned that under your leadership, Sears may continue to struggle and employees will continue to face uncertainty and anxiety over their future employment and ongoing risks to their benefits and economic security."

Alleged fraudulent activities

Warren also called attention to the suit filed by unsecured creditors to block the sale to Lampert, noting that their 570-page motion alleged fraudulent activities by Lampert and his hedge fund during his tenure as chairman and CEO of Sears.

The creditors got their day in court earlier this week, making one final appeal to the judge to not grant control of the retailer to Lampert and ESL Investments, his hedge fund. They argued that Lampert’s management of the company is one reason it is bankrupt.

In a filing last week, Lampert accused Sears’ unsecured creditors of engaging in efforts intended to “poison the well” against ESL with "page after page of its pleadings with smears and false narratives that are completely irrelevant" to his potential Sears’ takeover.

In the end, Judge Drain sided with Lampert, whose firm will take control of Sears’ remaining stores and assets.

J.C. Penney announced in a blog post on Wednesday that it will stop selling major appliances in its stores starting February 28.

The retailer said that removing appliances would help it "better meet customer expectations, improve financial performance and drive profitable growth."

In addition to shuttering its home appliances showrooms, the chain is also changing its plan for selling furniture. Going forward, furniture will only be available on jcp.com and in some stores in Puerto Rico.

Using extra space to focus on ‘legacy’ categories

The revised game plan regarding home furnishings will reduce inventory, giving stores additional space to "create an enhanced shopping experience that inspires repeat shopping trips,” J.C. Penney said in a statement.

"Optimizing the allocation of store space will enable us to prioritize and focus on the company's legacy strengths in apparel and soft home furnishings, which represent higher margin opportunity," the retailer said.

The company said it will provide more details about its decision to bow out of the home appliance business when it reports its fourth-quarter earnings on February 28. At that time, the retailer is also expected to offer details on additional store closures. Two years ago, the chain confirmed that it would close 140 stores amid declining sales.

Consumers who purchase an appliance from J.C. Penney before February 28 will get free basic delivery and installation on new model purchases over $299.

On Monday, Sears’ unsecured creditors will head to U.S. Bankruptcy Court for the Southern District of New York to voice their objections to CEO Eddie Lampert’s $5.2 billion buyout bid.

Earlier this month, Lampert made a last-minute bid to salvage the 126-year-old chain and keep 425 stores open through his ESL hedge fund. However, over the last few weeks, those owed money by Sears who are unprotected by collateral have accused Lampert of using a range of shady tactics over the years, including "stealing assets" and "years of misconduct.”

“The tortured story of Sears reads like a Shakespearean tragedy, playing out over five acts,” the unsecured lenders said in a complaint filed one week after Lampert made his winning bid. The creditors’ committee argued that the bid shouldn’t be approved because Lampert’s control gave him "undue influence to siphon value" on favorable terms.

A hearing regarding the matter is expected to take place on February 4 and February 6, during which time Judge Robert Drain will hear these objections and decide the fate of the company.

Drain has previously “shown a propensity for pushing Lampert and Sears to draft a deal that would save jobs, having twice granted the parties more time in order to craft a resolution when it seemed like they had reached a breaking point,” according to CNBC.

Saving jobs

In a filing last week, Lampert accused Sears’ unsecured creditors of engaging in efforts intended to “poison the well” against ESL with "page after page of its pleadings with smears and false narratives that are completely irrelevant" to his potential Sears’ takeover.

Lampert and his legal team emphasized that the proposed acquisition will save 45,000 jobs. However, creditors argue that Lampert’s motivation to save the company may not be entirely pure.

Opponents of the proposed deal say it’s "nothing but the final fulfillment of a years long scheme to rob Sears and its creditors of assets and employees of jobs while lining Lampert's and ESL's own pockets."

Lampert noted in court documents that ESL is committing more than $300 million in cash to fund the offer, including buying out other senior debt holders, and at least $193 million in credit.

"ESL therefore has much to lose if [its] go forward business plan is not successful," the documents stated.

A spokesperson for ESL said the company is confident Sears Holdings can be salvaged under the bid.

“Subject to its approval by the court, our going concern proposal will deliver a total consideration in excess of $5.2 billion and save tens of thousands of jobs,” the spokesman said in an email to ConsumerAffairs. “It will also fund certain severance costs incurred by Sears during bankruptcy and reinstate severance benefits for eligible employees in a new company.”

If the television networks ever run out of material for soap operas, maybe they can just televise the Sears bankruptcy saga, which has so far been filled with plot twists.

Former Sears Holdings CEO Eddie Lampert and the hedge fund he controls, ESL Investments, finally prevailed with a $5 billion offer to take over what’s left of the company and keep 400 Sears and Kmart stores open.

But not everyone is happy. The unsecured creditors who are still owed money have filed a motion in bankruptcy court, asking for an open hearing where they plan to air their grievances. The creditors claim Sears’ downfall was precipitated by Lampert’s and ESL Investment’s mismanagement of the company over the last few years.

"This is a matter of significant public interest and should be heard entirely in open court," the creditors said in their motion.

Ignoring the objection

ESL Investments is moving forward, essentially ignoring the objection from the unsecured creditors. A spokesman for the hedge fund said the company is confident Sears Holdings will successfully emerge from bankruptcy, saving one of the most famous names in American retail.

“Subject to its approval by the court, our going concern proposal will deliver a total consideration in excess of $5.2 billion and save tens of thousands of jobs,” the spokesman said in an email to ConsumerAffairs. “It will also fund certain severance costs incurred by Sears during bankruptcy and reinstate severance benefits for eligible employees in a new company.”

The spokesman said the takeover agreement will also honor commitments to customers who purchased products with extended warranties and support affected vendors.

“At every stage in this process, ESL has worked tirelessly to help Sears re-emerge from bankruptcy, including by enhancing our offer several times, because we believe Sears has a future as a profitable company that can succeed in today's competitive retail landscape,” the spokesman said.

Hearing early next month

The bankruptcy judge has scheduled a hearing for February 1, at which time the creditors’ objections will be heard.

In particular, the unsecured creditors have been highly critical of some of the financial transactions Lampert made while running the company. The deals include the spinning off of Lands’ End in 2014 and other spin-offs of some real estate.

After extensive negotiations, ESL reached agreement with Sears Holdings this week to acquire 425 Sears stores and other company assets for $5.2 billion.

At the eleventh hour, Sears has found someone to keep 400 of the company’s stores open and the lights on.

On Wednesday, Eddie Lampert, the chairman of Sears Holdings, struck a $5 billion deal to save the 126-year-old chain. The deal was struck after days of closed door push-and-pull over the number of jobs that would be saved, how Sears’ creditors would be paid, and what components -- like Sears Home Services -- would be kept alive.

As late as Tuesday night, the bid from Lampert’s hedge fund, ESL Investments, seemed doomed. Bloomberg News reported that people familiar with the situation said that the $5 billion final bid was $150 million over its previous offer.

Who is this Lampert fellow?

Lampert is well-known around Sears. The billionaire constructed Kmart’s $11 billion acquisition of Sears back in 2005 and, through his ESL hedge fund, is Sears’ largest shareholder. According to the Chicago Tribune, he’s provided Sears with more than $2.4 billion in loans and other financing over the last few years.

Previously, Lampert was a director at AutoNation and AutoZone.

Can Sears compete in the digital world?

Sears, Toys “R” Us, and other big box stores have felt the pinch of consumers moving toward online shopping. Now that it has a reprieve, Sears is faced with the task of re-inventing its business model like WalMart and Target have to make themselves viable.

Sears, under Lampert’s direction, was actually an early adopter of online shopping. In his 2011 shareholder’s letter, he bragged that Sears Holdings was named “Overall Best-in-Class" for its mobile efforts and ranked second for its online consumer experience, even going as far as comparing Sears’ strategy to Microsoft and Apple.

However, Lampert’s best laid plans for online prosperity didn’t succeed. Left with few choices, he opted to shave off $1 billion in expenses by selling off Craftsman tools and spinning off Land’s End. He also put a lot of the company’s retail footprints up on the real estate market in hopes of companies like Whole Foods taking over the left-behind space.

Still, some say the company has a lot more to pare down.

“Scale, which is critical to competing in retail today, will be lacking and its core customer proposition still remains in question,’’ said Moody’s Corp. Vice President Christina Boni. “Sears had been shrinking its store base and reducing costs in recent years, but improvement in sales trends and profitability remained elusive.’’

It’s likely to be an anxious weekend for as many as 68,000 Sears and Kmart employees as their jobs continue to hang in the balance. But late week events make their prospects appear a little brighter.

After all, at mid-week, their company Sears Holdings petitioned a bankruptcy judge to let it close its remaining stores and liquidate its assets, saying former CEO Eddie Lampert’s $4.4 billion offer to buy the remaining assets wasn’t good enough.

But Lampert has raised his bid to $5 billion, and the judge said the former executive can bid for the assets in Monday’s bankruptcy audition. In a filing, Lampert’s hedge fund, ESL Investments, said it has formed a new company called Transform Holdco LLC that will make a new offer to buy the company’s assets and operate its most profitable retail stores.

Still enthusiastic

In the filing, Lampert said he is still enthusiastic about the deal and about Sears’ future in the retail space. Whether the new company’s offer is sufficient will be determined at Monday’s auction.

Lampert’s new company appears to be the only bidder that wants to keep Sears intact, and thus preserve most of the existing jobs. It will have to compete with others bidding for pieces of the firm.

At stake is the legacy of a retailer that began in the late 19th century, as well as the fate of as Sears and Kmart employees who would lose their jobs if the company eventually liquidates.

In recent years, the company operating Sears and Kmart stores has been dragged lower both by falling sales and rising debt. The company borrowed heavily in the last decade to shore up its business, but most of those investments failed to bear fruit.

Strong counter-trends

Its efforts at a turnaround have encountered two strong counter-trends. On one hand, more retail sales have moved to online channels in the last decade. Even as Sears’ brick and mortar competitors established effective e-commerce operations, Sears -- a pioneer in catalog sales -- failed to do so.

It has also been a victim of the decline of shopping malls. While competitors such as Walmart and Target usually operate stand-alone stores, Sears has usually been an anchor in shopping malls, which have seen dramatic declines in customer traffic.

Sears, the 126-year-old bankrupt retailer, isn’t dead after all.

After hearing both sides, a bankruptcy judge has decided to postpone Sears’ requested liquidation to allow former Sears CEO Eddie Lampert one final chance to take over the company and its remaining 425 Sears and Kmart stores.

Lampert, through his hedge fund ESL, bid $4.4 billion for the company’s assets, but the total fell short of what the Sears board said was necessary. The judge ruled that if ESL comes up with $120 million by 4:00 p.m. ET today to keep the stores open, he can compete for the company’s assets at an auction on Monday.

At stake is the legacy of a retailer that began in the late 19th century, as well as the fate of as many as 68,000 Sears and Kmart employees who would lose their jobs if the company eventually liquidates.

The company has been dragged lower both by falling sales and rising debt. The company borrowed heavily in the last decade to shore up its business, but most of those investments failed to bear fruit.

Slow collapse

Sears and Kmart have been undergoing a slow collapse over the last decade as more retail sales have moved to online channels. Even as Sears’ brick and mortar competitors established effective e-commerce operations Sears -- a pioneer in catalog sales -- failed to do so.

The hemorrhaging picked up speed in the third quarter of 2016 when the company reported a net loss of $748 million, almost double what it lost in the same quarter a year earlier. The company responded by closing unprofitable stores.

The only problem was, there were a lot of them. At one point the following year, it opened one new store but closed 20 others. Store closings continued throughout 2017 and 2018, with Sears Holdings declaring bankruptcy in mid-October 2018.

Reuters reports the negotiations between Lampert and the company broke down over the structure of his bid, as well as the former CEO’s request to not be held liable for actions he took while servicing as the company’s chief executive.

Sears, Roebuck, and Company began as a mail order retail company, the late 19th century’s version of Amazon.com. It began opening retail stores in 1925.

Lawyers representing Sears Holdings told a bankruptcy judge Tuesday that former CEO Eddie Lampert’s bid to buy the assets wasn’t adequate and said it wants to proceed with plans to liquidate, according to several published reports.

It would bring an end to a retail name that goes back to 1893. It also closes the curtain on Kmart, which is owned by Sears Holdings. Under the plan the remaining Sears and Kmart stores would close, meaning about 68,000 employees would lose their jobs.

Before the stores close, however, the company is expected to liquidate current inventory by drastically slashing prices. Sears stock is trading at 22 cents a share on the New York Stock Exchange.

Former Sears CEO Eddie Lampert, through a hedge fund he controls, attempted to rescue the venerable retailer, bidding $4.4 billion for the firm, which declared bankruptcy in October. Even though no other bidders stepped forward, Sears Holdings’ board decided the offer wasn’t good enough since nearly a quarter of it was in the form of debt forgiveness.

Lampert still trying

Lampert’s lawyers were in court to argue his offer was the only way to keep Sears in business. If the court sides with Sears, the company will go ahead with a scheduled auction of company assets January 14.

Sears and Kmart have been undergoing a slow collapse over the last decade as more retail sales have moved to online channels. Even as Sears’ brick and mortar competitors established effective e-commerce operations Sears -- a pioneer in catalog sales -- failed to do so.

The hemorrhaging picked up speed in the third quarter of 2016 when the company reported a net loss of $748 million, almost double what it lost in the same quarter a year earlier. The company responded by closing unprofitable stores.

The only problem was, there were a lot of them. At one point the following year, it opened one new store but closed 20 others. Store closings continued throughout 2017 and 2018, with Sears Holdings declaring bankruptcy in mid-October 2018.

Reuters reports the negotiations between Lampert and the company broke down over the structure of his bid, as well as the former CEO’s request to not be held liable for actions he took while servicing as the company’s chief executive.

Sears, Roebuck, and Company, began as a mail order retail company, the late 19th century’s version of Amazon.com. It began opening retail stores in 1925.

At the very last minute, former Sears CEO Eddie Lampert made his $4.6 billion bid official, saving the long-time retailer from liquidation. It ended a suspenseful Friday when it appeared likely that Sears was at the end of its rope.

Terms of the offer were not made public and it must still be ratified by the Sears Holdings board of directors in January.

The offer comes from an affiliate of Lampert’s hedge fund and is only for 425 of the remaining Sears and Kmart stores. The company had already announced that it would close another 80 stores, bringing the 2018 total to more than 250.

It closes what has been a bleak year for Sears Holdings and its employees. Amid the store closings, the company declared bankruptcy in October.

The company was holding out for a Christmas miracle, hoping that several interested parties would bid up the price of Sears’ remaining assets. In the end, however, Lampert was the sole player.

While $4.6 billion is a lot of money Lampert previously positioned most of his offer as forgiveness of existing debt. However, Sears desperately needs operating capital to keep going.

Sears and Kmart stores have steadily lost foot traffic as more consumers shifted to online channels. Its fortunes also declined with America’s shopping malls, many of which now contain empty storefronts.

Never adapted to the internet

Oddly Sears -- which pioneered the concept of retail catalog sales -- never adapted to the internet age, losing out not only to Amazon but also its brick and mortar competitors like Walmart, Target, and Macy’s.

Retail analysts say its remaining value lies largely in its brands and intellectual property, which includes Kenmore appliances and Die Hard batteries.

Sears sold its Craftsman tools brand to Stanley Black and Decker earlier this year for $775 million but still gets royalties from new third-party sales, as well as a 15-year license for the brand.

It’s been a rocky year for Sears Holdings, and it could end with the venerable retailer turning out the lights.

The company has set a deadline of the end of business today for a buyer to step in and purchase about 500 stores and its Kenmore appliance brand. Sears say it needs that cash infusion to keep its remaining Sears and Kmart stores open.

In bankruptcy court, Sears said it has received interest from “multiple parties,” but as of yet, none has stepped forward publicly to make an offer except for the hedge fund controlled by former Sears CEO Eddie Lampert.

But Lampert hasn’t officially put that offer on the table and only has hours left in which to do so. He is reportedly offering $4.6 billion for the assets and has said it would allow thousands of Sears and Kmart employees to keep their jobs.

October bankruptcy

Sears Holdings filed for bankruptcy protection in October as it faced a huge debt payment. At the time, it was seen as the last shot at becoming solvent, and major creditors gave the company the leeway to try.

At the time of its bankruptcy filing, Sears also announced it was closing another 142 stores, the latest in a wave of closings of unprofitable stores, in hopes of stopping the flow of red ink.

Last month, Sears opened discussions with Service.com to sell its home improvement business, but the $60 million price tag amounts to a drop in the bucket to the capital the struggling retailer requires.

What’s next?

Unless there is a secret bidder waiting until the last minute, that leaves Lampert and his hedge fund as the only players and, for now at least, that bid has not been formally offered. Neither Lampert nor Sears Holdings are offering a comment on the status.

Without a last-minute bid, Sears could begin the process of liquidation to pay off creditors. Another option could be to extend the deadline into 2019 in hopes of finding a buyer then.

In addition to declining sales, Sears’ Kenmore washers haven’t exactly been giving the company positive press coverage. Christopher Elliott, a columnist for King Features Syndicate, writes that he has received an increasing number of complaints from readers who say the glass lid of their Kenmore Elite washer spontaneously shatters.

An analysis of ConsumerAffairs reviews of Kenmore washers did not reveal any reports of shattering lids, but it did indicate that consumers are reporting some operational issues.

Two months after Sears Holdings filed for Chapter 11 bankruptcy protection, the company’s chairman Eddie Lampert has offered to buy the rest of Sears for up to $4.6 billion in cash and stock.

Lampert’s hedge fund, ESL Investments, submitted a proposal to pay that amount and purchase 500 stores to help keep the retailer from dying completely. He had previously planned to buy selected stores in the interest of keeping the retailer afloat.

The bid presented on Thursday could include a combination of cash, equity new loans, and debt swaps, according to the documents. If the offer is approved, it would save about 50,000 Sears and Kmart store jobs.

“ESL Investments continues to believe in Sears Holdings’ immense potential to evolve and operate profitably as a going concern with a new capitalization and organizational structure,” ESL said in a statement.

A “last-ditch effort” to save Sears

Sears filed for bankruptcy on October 15 after struggling under massive debt. Prior to that, the company had closed or announced plans to close hundreds of stores.

On December 15, a “stalking horse bidder” will be named in bankruptcy court.

Lampert’s offer is “a last-ditch effort,” Farla Efros, president of HRC Retail Advisory, told Bloomberg. “They want to be able to hold onto any equity that they can actually hold onto, and it’s really about ego and saving face.”

"Sears is an iconic fixture in American retail and we continue to believe in the company’s immense potential to evolve and operate profitably as a going concern with a new capitalization and organizational structure," Lampert said.

"Our proposed business plan envisages significant strategic initiatives and investments in a rightsized network of large format and small retail stores, digital assets and interdependent operating businesses."

Sears Holdings, the parent company of Sears and Kmart stores, continues to get smaller.

The company has announced it is closing an additional 40 stores by early 2019. That's in addition to the 142 unprofitable stores it expects to close before the end of this year.

The venerable retailer filed for bankruptcy protection last month after shrinking its footprint to just 700 stores. The footprint will get smaller, however, as the company desperately seeks additional capital to stay afloat while it shops around for a potential buyer.

To date, most of the financial support has come from ESL Investments, the hedge fund headed by Sears Chairman Eddie Lampert. ESL has already come through with $300 million in cash infusions and bankruptcy documents show Sears is in talks with ESL to double that.

According to CNBC, talks with ESL have broken down and the company is now looking for alternative financing. That likely was a contributing factor to closing the 40 additional stores. The liquidation of the additional stores is expected to be completed by the end of February.

Trouble stems from two factors

Sears Holdings’ problems have been years in the making and stem from two factors -- declining brick and mortar sales and rising debt. In 2016, Sears Holdings announced it would turn things around by getting smaller, a strategy that has failed to yield results.

At the same time, Black Friday is approaching so it's still business as usual. The retailer has rolled out plans to compete for what is expected to be record holiday spending. The company has announced Sears and Kmart Thanksgiving/Black Friday doorbuster deals.

Sears will have special deals on Craftsman Tools -- the brand it sold years ago in an effort to raise cash -- and many of the toys found at Kmart.

"It has been very humbling to see the outpouring of love and support from across the country and our 'Thanks for the Love' social media campaign reflects that," said Peter Boutros, chief brand officer for Sears and Kmart.

Despite the continued bad news, Boutros says he remains optimistic about the company's prospects during the upcoming holiday season.

In the wake of its Chapter 11 bankruptcy filing, Sears is hoping to sell its home improvement division to Service.com.

Sears Home Services formerly offered cleaning and handyman services, and Service.com helps homeowners find contractors. Sears is in talks to sell its home improvement business to the company for $60 million.

Robert A. Riecker, Chief Financial Officer and member of the Office of the Chief Executive, said the sale of the Sears Home Improvement Business (SHIP) is “an important step for Sears Holdings as we continue working to achieve a comprehensive restructuring.”

"We look forward to completing this process expeditiously so that we can maximize the value of SHIP and ensure a seamless transition for all of our stakeholders,” Riecker said in a statement.

Seeking court approval

Pending court approval, Service.com intends to purchase Sears’ home improvement business for approximately $60 million in cash. If no higher or better offers are received, the deal is likely to close by the end of the year.

“Service.com is excited about the possibility of combining with SHIP. This would not have been feasible without the support of Peter Karmanos’ MadDog Ventures,” said Service.com’s CEO Sandy Kronenberg.

In October, Sears filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. Reuters reported over the weekend that the retailer is currently negotiating a deal with chairman Eddie Lampert and lenders “to expand a bankruptcy financing package that would help it avoid liquidation.”

Sears is seeking to sell its home improvement business to Service.com through a “stalking horse” asset purchase agreement, which lets a bankrupt debtor test the market for the debtor's assets in advance of an auction of them.

Eddie Lampert, former CEO and current chairman of Sears, reportedly has a plan to support the retailer through bankruptcy through his hedge fund, ESL Investments. However, he’s now saying that he will only put in more money under certain conditions.

Sears -- which filed for Chapter 11 bankruptcy on October 15 and is also trying to secure financing in bankruptcy in an attempt to avoid liquidation -- had about 700 stores left when it filed for bankruptcy, with plans to close 142 of them by year’s end.

In a public filing late last month, ESL said that the retailer "must act immediately to have sufficient runway to continue its transformation."

"We continue to believe that it is in the best interests of all stakeholders to accomplish this as a going concern, rather than alternatives that would substantially reduce, if not completely eliminate, value for stakeholders," ESL said.

Asking for improved terms

Earlier this month, Sears Holdings secured the first $300 million loan from a group of lenders that included Citigroup, Bank of America, and Wells Fargo, which would help to support the retailer through bankruptcy.

“It was junior to the investment banks' loan, meaning ESL would get paid back after the banks,” CNBC noted. This week, however, Lampert went back to the investment banks asking to improve the terms of his loan.

Lampert has specifically asked to have the “first lien,” meaning he would get paid back before the lenders. Sources also told CNBC that he’s only interested in buying Sears at a roughly 400-store footprint.

Lampert, who is also the company’s largest shareholder, is currently the only known person who is planning to bid for the 400 of the company’s best-performing stores that will go up for sale at an auction in January. If the retailer can’t find a buyer, then liquidation will be the likely next step.

Sears -- which has more than 68,000 employees -- expects to use up $220 million in the first month of its bankruptcy, according to court documents.

Sears Holdings faces a significant debt payment next week, and the struggling retailer is reportedly preparing a bankruptcy filing.

The Wall Street Journal reports the firm has hired an adviser – M-III Partners – to prepare the paperwork for filing as early as this week.

Sears Holdings, which operates Sears and Kmart stores, is scheduled to pay $134 million on its debt on Monday. In the past, CEO Eddie Lampert has written the check himself, but he may be less inclined to do so this time.

In recent weeks, Lampert – the largest shareholder – has pushed for a major corporate restructuring to guide the company back to financial health. Last month, Lampert offered to have ESL, the hedge fund he heads, purchase some of the company's assets. He also urged the board of directors to take steps to structure the company's massive debt, warning that time is running short.

"We continue to believe that it is in the best interests of all stakeholders to accomplish this as a going concern, rather than alternatives that would substantially reduce, if not completely eliminate, value for stakeholders," ESL said in a public filing.

Proposal to sell assets

The proposal from ESL suggests Sears Holdings sell $3.22 billion in assets, including $1.47 billion in real estate. Part of the deal includes ESL buying the real estate if it hasn't sold after 12 months. At the time, the board said it would consider the proposal.

In the meantime, Sears Holdings has responded to the financial drain by closing stores. In January, the company announced it would close 150 unprofitable stores in 2018, most of which have already been shuttered. The remaining stores on the list will close their doors next month.

The company supplemented that by closing 50 Sears Auto Center locations and 92 Kmart pharmacies earlier this year.

The Journal's report of the impending bankruptcy cites employees at M-III Partners, who told the newspaper they have spent the last few weeks preparing the bankruptcy filing. They also say that Sears continues to talk about additional options and might stop short of bankruptcy.

Amid declining sales, in part stemming from the success of online mattress retailers, Mattress Firm has filed for Chapter 11 bankruptcy protection. The company plans to close as many as 700 of its 3,500 stores nationwide.

Many of the stores that are slated to be shut down are located "in certain markets where we have too many locations in close proximity to each other," CEO Steve Stagner said in a statement.

The filing and store closures are intended to help the company “strengthen its balance sheet and optimize its store footprint.”

"We intend to use the additional liquidity from these actions to improve our product offering, provide greater value to our customers, open new stores in new markets, and strategically expand in existing markets where we see the greatest opportunities to serve our customers,” Stagner said.

Restructuring package

The company, which has nearly 10,000 employees, said it filed motions to support the continued payment of employee wages and health and welfare benefits. Mattress Firm said it has financing that will allow it to keep running its business and said it expects the restructuring process to wrap up within 45 to 60 days.

Between 2012 and 2016, Mattress Firm acquired several companies – Mattress Giant, Sleep Train, and Sleepy’s. However, the acquisitions put the retailer on shaky ground. In a court filing, the company acknowledged "several well-intentioned, but ill-advised, marketing and sales promotions." Mattress Firm said it expects to lose $150 million this year.

The emergence of boxed mattress sellers like Casper haven’t helped the company find success in its effort to regain stability, either.

"I think Casper is the reason why they are in this position," Casper CEO Philip Krim told USA Today. "Casper has really pushed the industry to reinvent itself. We continue to give the customer what they want, and that’s not how the incumbents in this space operated."

Krim estimated that about 10 to 12 percent of mattress sales are online. He said he expects that figure to continue to rise over the next several years.

Mattress Firm said in its filing that it will not conduct typical liquidation sales or offer special going-out-of-business deals to customers.

Sears CEO Eddie Lampert is hopeful the struggling retailer can somehow raise some cash to keep the company's turnaround efforts alive.

Lampert, who is also the company's largest shareholder, has proposed that Sears Holdings sell additional assets and restructure its debt. In a public filing ESL, Lampert's hedge fund, said the retailer "must act immediately to have sufficient runway to continue its transformation," suggesting the company is running short on time.

"We continue to believe that it is in the best interests of all stakeholders to accomplish this as a going concern, rather than alternatives that would substantially reduce, if not completely eliminate, value for stakeholders," ESL said.

Company is considering it

The Sears Holdings board of directors has acknowledged receiving the proposal, confirming it regards liability management and some real estate transactions as a possible course of action.

"The Board has directed the company's management and its legal and financial advisors to work closely with ESL, its advisors and the company's other stakeholders to seek to pursue liability management transactions of the nature described in the proposal, subject to advice of the company's legal and financial advisors and approval of any final transaction by the Related Party Transactions Subcommittee of the Board and the full Board," the company said in a statement.

Lampert's hedge fund underscores the serious nature of the retailer's problem. It warns the company is running out of cash and faces a $134 million payment due October 15 and reserve requirements on October 1.

The proposal from ESL suggests Sears Holdings sell $3.22 billion in assets, including $1.47 billion in real estate. Part of the deal includes ESL buying the real estate if it hasn't sold after 12 months.

'No assurances'

Sears' board said it would consider the proposal but added, "There can be no assurance that any transaction will be consummated or on what terms any transaction may occur."

The company has closed dozens of stores so far this year and has more targeted for closing by November. However, the emerging consensus on Wall Street is that it won't be enough to stop the flow of red ink.

Sears Holdings stock fell nearly 9 percent Monday and investment site Seeking Alpha reiterated its sell rating, concluding, "We do not expect the company to be able to emerge from the current situation characterized by: comparable sales decline, unsustainably high operating expenses, and high debt levels."

Sears Holdings' well documented troubles have resulted in dozens of store closings and even concerns about the company's long-term future. But company CEO Eddie Lampert says it's not the business model that's producing the most headwinds -- it's company pensions.

Writing on the Sears Holdings blog, Lampert maintains that the steps the company has taken in recent years are sound and have produced positive results.

"We have integrated capabilities that leverage our physical store footprint, our unique service businesses and the Shop Your Way ecosystem to constantly define an integrated retail experience for our members," Lampert writes. "We continue to evolve our Shop Your Way 5-3-2-1 credit card, and our amended deal with our partner, Citi, should only make our efforts stronger."

Lampert concedes that adapting to the new retail environment, in which consumers continue to shift to online channels, has been a problem. But he says that's been a problem for every other brick and mortar retailer, some of which are actually thriving.

Gobbling up much-needed resources

The CEO says Sears Holdings, which operates both Sears and Kmart stores, has the added burden of managing its long-term pension obligations, which he says have gobbled up much-needed resources.

"In the last five years, we contributed almost $2 billion, and since 2005 we have contributed over $4.5 billion, to fund our pension plans," Lampert writes.

Pensions have cost more in part, he says, because the Federal Reserve has held interest rates near zero for so long, meaning the company has had to contribute more cash to its pension funds.

Competitors don't have that burden

"Had the Company been able to employ those billions of dollars in its operations, we would have been in a better position to compete with other large retail companies, many of which don’t have large pension plans, and thus have not been required to allocate billions of dollars to these liabilities," Lampert said.

In its latest quarterly earnings report last week, Sears noted that its decline in same-store sales was the smallest in more than three years. At Sears and Kmart stores open for at least 12 months, sales fell 3.9 percent during the second quarter, compared to an 11.9 percent drop in sales in the previous quarter.

While the company acknowledged the encouraging trend, it said it will continue to identify and close unprofitable stores. So far in 2018 it has either closed or planned to close a total of 99 stores.

Sears Holdings, operator of Sears and Kmart stores, continues to lose money as it closes stores, but its latest earnings report holds a sliver of good news.

The decline in same-store sales in the latest quarter was the smallest in more than three years. At Sears and Kmart stores open for at least 12 months, sales fell 3.9 percent during the second quarter, compared to a 11.9 percent drop in sales in the previous quarter.

The decline in sales was slightly smaller at Kmart stores than at Sears. The company said its comparable sales grew 3 percent in July and 2.5 percent in August.

"While we are encouraged by the improved comparable stores sales trend we experienced in the second quarter, and the positive comparable store sales of 3.0 percent and 2.5 percent achieved in the months of July and August, respectively, we have yet to achieve our goal of returning the company to profitability," said CEO Edward S. Lampert. "We continue to close unprofitable stores, and we are hopeful that we can stabilize our store base at a meaningful level in the near future."

Quarterly loss doubles

The cost of closing stores weighed heavily on the company's bottom line in the second quarter. The company reported a net loss of $508 million, more than double the net loss of $250 million for the second quarter of 2017.

"Our goal is to right-size our store footprint to a solid base from which we can operate and grow profitably, while leveraging our online and Shop Your Way platforms," Lampert said.

The company said it will identify additional opportunities to "streamline operations and reduce expenses" in the second half of the year, suggesting consumers may see additional store closings.

Sears served notice in January that it was in dire financial straits. It identified 150 unprofitable stores targeted for possible closing. So far, 99 have either closed or are among those that will close by November.

Other steps to raise cash

In addition to closing unprofitable stores, the company has also been considering other steps to raise cash. It has been in talks with a hedge fund that has offered to buy Sears Holdings' Kenmore appliance division for $400 million and the home improvement business for $80 million. The company had no comment on the status of those talks.

Sears said it plans to expand its Sears Auto Center tire installation program with Amazon.com which is now available nationwide. It also said is plans to expand its online marketplace with popular products sold by third parties.

Sears Holdings says it will close an additional 46 Sears and Kmart stores by November. Sears has shuttered about 400 U.S. locations in the last 15 months as it continues efforts to stem a rising tide of red ink.

In May, Sears announced the closing of 63 stores and hinted that more closings could be announced later this year. That hint became a reality today.

"We continue to evaluate our network of stores, which is a critical component to our integrated retail transformation, and will make further adjustments as needed," the company said in a statement.

Sears served notice in January that it was in dire financial straits. It identified 150 unprofitable stores targeted for possible closing. So far, 99 have either closed or are among those that will close by November.

In a way, Sears is a victim of consumers' growing reliance on Amazon, but that doesn't fully explain it. In the last two weeks, both Walmart and Target have reported robust earnings, demonstrating that traditional brick and mortar stores can make themselves more appealing to consumers and compete with the online retail giant.

CNBC reports that Sears is considering a hedge fund proposal to purchase the Kenmore appliance brand in an effort to pump new cash into the business. The retailer previously spun off its Craftsman Tool division.

Stores that are closing

Here is the list of the latest Sears and Kmart stores targeted for closing:

• Kmart 935 Sweetwater Road Spring Valley Calif.

• Kmart 1075 Shaw Avenue Clovis Calif.

• Kmart 3625 East 18th Street Antioch Calif.

• Kmart 6310 W 3rd Street Los Angeles Calif.

• Kmart 589 Bridgeport Avenue Milford Conn.

• Kmart 301 College Square Newark Del.

• Kmart 3231 Chicago Road Steger Ill.

• Kmart 11 South Kings HWY 61 Cape Girardeau Mo.

• Kmart 2308 Highway 45 N Columbus Miss.

• Kmart 605 Old Country Road Riverhead N.Y.

• Kmart 440 NW Burnside Road Gresham Ore.

• Kmart 101 Great Teays Blvd Scott Depot Wva.

• Kmart 2150 South Douglas HWY Gillette Wyo.

• Sears Flagstaff Mall, 4800 N US HWY 89 Flagstaff Ariz.

• Sears Capitola Mall, 4015 Capitola Road Santa Cruz Calif.

• Sears 2424 Highway 6 And 50 Grand Junction Colo.

• Sears 2266 University Square Mall Tampa - University Fla.

• Sears 1625 NW 107th Avenue Doral / Miami Fla.

• Sears Coastland Ctr, 2000 9th Street N Naples Fla.

• Sears Oglethorpe Mall, 7810 Abercorn St Savannah Ga.

• Sears 2860 Cumberland Mall Atlanta Ga.

• Sears 100 Mall Blvd Ste 300 Brunswick Ga.

• Sears 1631 E Empire Street Bloomington Ill.

• Sears 4201 Coldwater Road Fort Wayne Ind.

• Sears 3000 Mall Road Florence Ky.

• Sears 1914 Hammond Square Drive Hammond La.

• Sears 50 Holyoke Street Holyoke Mass.

• Sears Silver City Galleria Taunton Mass.

• Sears 1250 Jackson Xing I-94 Jackson Mich.

• Sears 4601 Glenwood Avenue Raleigh - Crabtree N.C.

• Sears 77 Rockingham Park Boulevard Salem N.H.

• Sears 1500 South Willow Street Manchester N.H.

• Sears 4409 Black Horse Pike Mays Landing N.J.

• Sears 200 Eastview Mall Victor N.Y.

• Sears 578 Aviation Road Queensbury / Glen Falls N.Y.

• Sears 1400 Union Turnpike New Hyde Park N.Y.

• Sears 2700 Miamisburg Centerville Road Dayton Ohio

• Sears 9505 Colerain Avenue Cincinnati - Northgate Ohio

• Sears 11800 SE 82nd Avenue Happy Valley / Portland Ore.

• Sears 400 Memorial City Way Houston - Memorial Tex.

• Sears Post Oak Mall College Station - Bryan Tex.

• Sears 7453 S Plaza Center Drive West Jordan Utah

• Sears 12000 Fair Oaks Mall Fairfax Va.

• Sears 8800 NE Vancouver Mall Drive Vancouver Wash.

• Sears 4720 Golf Road Eau Claire Wisc.

• Sears Valley View Mall, 4200 US HWY 16 La Crosse Wisc.

At the end of May, Sears announced that it would be closing 63 stores from a total of 100 underperforming stores. Now, the retailer has added ten more Sears and Kmart stores to its list of locations slated to shut down in September.

Sears Holdings said it told employees last week that it would be closing an additional nine Sears stores and one Kmart in late September. Liquidation is set to begin as early as July 13.

In total, 62 Sears and 16 Kmart locations were identified as “non-profitable.” All 78 will close in September.

Eddie Lampert, the company’s CEO, told Vanity Fair earlier this year that the retailer was “fighting to survive.” Sears Holdings has closed more than 500 stores over 15 months as a result of increased competition from online retailers and decreased foot traffic in shopping malls.

Store closings

Sears said the additional closures are part of the company’s “ongoing efforts to streamline the company's operations and focus on our best stores.” First quarter sales were $2.9 billion this year, compared with $4.2 billion last year. The company reported a net loss of $424 million in the first fiscal quarter.

"We continue to evaluate our network of stores, which are a critical component in our transformation, and will make further adjustments as needed and as warranted," Sears said in a statement announcing its first-quarter results.

Here are the ten stores that have been added to the company’s previous list of stores scheduled to shut down.

• California -- Newark: Sears at 6000 Mowry Ave; Thousand Oaks: Sears at 145 W Hillcrest Drive

• Florida -- Altamonte Springs: Sears at 451 East Altamonte Drive

• Michigan -- Troy: Sears at 300 W. 14 Mile Rd.

• Montana -- West Havre: Kmart at 3180 Highway 2

• New York -- Clay: Sears at 4155 State Route 31

• Oklahoma -- Oklahoma City: Sears at 4400 S Western Ave

• Virginia -- Virginia Beach: Sears at 4588 Virginia Beach Blvd; Chesapeake: Sears at 1401 Greenbrier Parkway

• Wisconsin -- Madison: Sears at 53 West Towne Mall C

Sears announced Thursday that it will be closing another 63 stores “in the near future.” 

More closures could be on the way, as the retailer indicated that the 63 stores it plans to close are among a list of 100 unprofitable locations.  

In January, the retailer announced that it would be shuttering 150 unprofitable Sears and Kmart locations. A few months later, the company said in an SEC filing that there was “substantial doubt” that it could continue operating unless it found a way to raise additional capital.

Eddie Lampert, the company's CEO, said the company would “continue to take difficult yet necessary actions,” and “closely evaluate the longer-term viability of stores where a clear path to return to profitability is not in sight.”

The 125-year old company has closed nearly 400 Sears and Kmart locations over the past 12 months.

Slumping sales

The closures come amid declining sales, with revenues falling 31 percent in the most recent quarter. First quarter sales were $2.9 billion, compared with $4.2 billion a year earlier, Sears said. The company reported a loss of $424 million due to lower sales.

"We continue to evaluate our network of stores, which are a critical component in our transformation, and will make further adjustments as needed and as warranted," Sears said in a statement announcing its first-quarter results.

Shares of Sears Holdings Corp. fell as much as 13% before the start of regular trading on news of the results.

Stores set to close

Here's the full list of Sears and Kmart locations the company said it is closing: 

Arizona

• Sears, 10001 N Metro Parkway, West Phoenix, AZ

California

• Kmart, 910 North China Lake Blvd, Ridgecrest, CA
• Sears, 100 S Puente Hills Mall City Industry, CA

Colorado

• Kmart, 9881 W 58Th Avenue, Arvada, CO

Florida

• Kmart, 5400 E Busch Blvd, Tampa, FL
• Sears, 7902 Citrus Park Town Center, Tampa, FL
• Sears, 320 Towne Center Circle, Sanford, FL

Georgia

• Sears, 2201 Henderson Mill Road N.E., Atlanta, GA
• Sears, 1300 Southlake Mall, Morrow, GA
• Sears, 2100 Pleasant Hill Road, Duluth, GA

Hawaii

• Kmart, 4303 Nawiliwili Road, Lihue, HI

Illinois

• Kmart, 5909 E State Street, Rockford, IL
• Sears, #2 Hawthorn Center, Vernon Hills, IL
• Sears, #2 Fox Valley Center, Aurora, IL
• Sears, 6136 W Grand Avenue, Gurnee, IL
• Sears, 104 West White Oaks Mall, Springfield, IL

Iowa

• Kmart, 2535 Hubbell Avenue, Des Moines, IA
• Sears, 320 W Kimberly Road, Davenport, IA

Indiana

• Sears, 2415 Sagamore Pkwy S, Lafayette, IN
• Sears, 40 Muncie Mall, Muncie, IN
• Sears, 6020 E 82Nd Street, Indianapolis, IN

Kansas

• Sears, 1781 Sw Wanamaker Road, Topeka, KS

Louisiana

• Kmart, 4070 Ryan Street, Lake Charles, LA
• Sears, Alexandria Mall, Alexandria, LA

Massachusetts

• Sears, Hwys 114 & 128, Peabody, MA
• Sears, Eastfield Mall, Springfield, MA

Michigan

• Sears, 3191 S Linden Road, Flint, MI
• Sears, 18900 Michigan Avenue, Dearborn, MI
• Sears, 14100 Lakeside Circle, Sterling Heights, MI
• Sears, 1212 S Airport Road W, Traverse City, MI

Minnesota

• Kmart, 215 North Central Avenue, Duluth, MN
• Sears, Shingle Creek Crossing, Brooklyn Ctr, MN
• Sears, Miller Hill Mall Duluth, MN

Mississippi

• Sears, 1000 Turtle Creek Drive, Hattiesburg, MS

Missouri

• Sears, 250 S County Center Way, St. Louis, MO
• Sears, #1 Chesterfield Mall, Chesterfield, MO

Montana

• Sears, 1515 Grand Avenue, Billings, MT

North Dakota

• Sears, 2800 S Columbia Road, Grand Forks, ND

New Jersey

• Kmart, 24 34 Barbour Avenue, Clifton NJ
• Sears, 300 Quaker Bridge Mall, Lawrenceville, NJ
• Sears, 2341 Rt 66, Ocean, NJ
• Sears, 2501 Mt Holly Road, Burlington, NJ

New Mexico

• Kmart, 2100 Carlisle Avenue, Albuquerque, NM
• Sears, 10000 Coors Bypass N.W., Albuquerque, NM

New York

• Kmart, 1000 Montauk Highway, West Babylon, NY
• Kmart, 25301 Rockaway Blvd, Rosedale, NY
• Sears, 3649 Erie Blvd E, Syracuse, NY​

Ohio

• Sears, 2400 Elida Road, Lima, OH
• Sears, 17271 Southpark Center, Strongsville, OH

Oregon

• Kmart, 12350 N E Sandy Blvd, Portland, OR

Pennsylvania

• Kmart, 1072 Mountain Laurel Plaza, Latrobe, PA
• Sears, 300 S Hills Village, South Hills, PA
• Sears, 1000 Robinson Center Drive, Pittsburgh, PA

South Carolina

• Sears, 205 W Blackstock Road, Spartanburg, SC
• Sears, 3101 N Main Street, Anderson, SC

South Dakota

• Sears, 3400 Empire Mall, Sioux Falls, SD

Tennessee

• Sears, 2931 Knoxville Center Drive, Knoxville, TN

Texas

• Kmart, 5000 San Dario Laredo, TX
• Sears, 2401 S Stemmons Freeway, Lewisville, TX
• Sears, 1800 Green Oaks Road, Fort Worth, TX
• Sears, 11200 Lakeline Mall Drive, Cedar Park, TX
• Sears, Golden Triangle Mall, Denton, TX

Washington

• Sears, 4502 S Steele Street, Tacoma, WA

Amazon and Sears have teamed up to sell tires, CNBC reports. Consumers can buy any brand of tire via the online retailer’s website and then schedule a time to stop by the closest Sears Auto Center to have them installed.

News of the partnership comes a year after the retailer was forced to shutter numerous locations that were determined to be unprofitable.

The tire sales program will begin at 47 locations in 8 cities, but Sears says it plans to “quickly expand” the service to every Auto Center around the country. Sears stock jumped 20 percent on news of the Amazon partnership after having falling more than 70 percent over the last year.

"Amazon.com customers can expect terrific performance and reliability from DieHard tires and professional installation from Sears Auto Centers," Tom Park, president of Kenmore, Craftsman, and DieHard brands at Sears Holdings, said in a statement. "We're thrilled to expand our assortment of this iconic brand to include passenger tires on Amazon.com."

Expanding partnership

Last Summer, Amazon announced that it would begin selling Kenmore home appliances on Amazon, with some integrated with Amazon’s Alexa. In December, Sears announced it would begin selling merchandise from its DieHard brand on Amazon, including car batteries and now tires.

"Kenmore is now distributed nationally on Amazon with over 250 products and we are exceeding customer service level expectations," Park said.

The tire service will be made available in the following cities in the coming weeks: Atlanta, Chicago, Dallas, Los Angeles, Miami, New York, San Francisco and Washington, D.C.

Struggling retailer Sears Holdings just may have bought some time. Eddie Lampert, the company's CEO, has offered to purchase the retailer's more valuable parts through a hedge fund he heads.

The result could be a leaner operation with more cash and less debt. Sears Holdings has announced the receipt of a letter from ESL Investments that lays out the proposal.

The letter suggests that Sears Holdings, which operates Sears and Kmart stores, should sell all or a portion of its Kenmore brand, along with the Sears Home Improvement business and the PartsDirect portion of the Sears Home Services division.

Substantial value

The letter notes these three properties have "substantial value," and that selling them could enable Sears Holdings to improve its financial stability. The letter went on to say that if the company is willing to take those steps, ESL could be a buyer.

Sears Holdings has struggled in recent years to stem the flow of red ink from its operations. Earlier this month, published reports detailed the company's plans to spin off some of the real estate from its closed stores, primarily in shopping malls.

The Wall Street Journal reported the company had retained a commercial real estate firm to sell about 16 locations in an online auction.

Kenmore is one of the company's more valuable assets. A year ago, Sears Holdings worked out a deal to sell the appliance line on Amazon. In addition to the marketing deal, Sears also said that its Kenmore Smart room air conditioners are integrated with Amazon's Alexa app and are available now on Amazon. It said it would expand the distribution to include all Kenmore home appliances.

Closing stores

Meanwhile, the company continued to close unprofitable stores throughout 2017. In January, it announced the closing of 150 Sears and Kmart locations. A couple months later, the company said in an SEC filing that there was “substantial doubt” that the business could continue unless it found a way to raise additional capital.

Only one month later, Sears opted to close another 50 auto center locations and 92 Kmart pharmacy operations, with Lampert saying that the company would “continue to take difficult yet necessary actions,” and “closely evaluate the longer-term viability of stores where a clear path to return to profitability is not in sight.”

Last August, the downsizing efforts continued with yet another batch of store closings. In a quarterly earnings report, Sears Holdings announced that it would close another 28 Kmart stores as part of its transformation effort.

As for the proposal from Lampert's hedge fund, Sears Holdings said it will review the proposal, noting there is no assurance that it will result in a transaction.

Consumers may find clothing, self storage, and even groceries in spaces once occupied by Sears. The struggling retailer is reportedly auctioning off several of its recently-closed locations in an effort to raise much-needed cash.

A report by The Wall Street Journal says a commercial real estate firm has been retained to sell about 16 Sears locations in an online auction. According to CNBC, most are part of shopping malls located in Texas, Missouri, Indiana, Ohio, and Michigan.

Sears did not immediately respond to media queries for comment.

Sears' loss may be other retailers' gain

While brick and mortar retail is generally struggling, businesses moving into a former Sears location may achieve increased visibility, since Sears was often able to secure prime locations.

Last week, the Pennsylvania Real Estate Investment Trust (PREIT) announced it was opening an 8,500-square foot Five Below store and a 20,000-square foot HomeGoods at a mall in Florence, S.C., in space formerly occupied by Sears.

Sears Holdings, which also operates Kmart, has been closing stores in an effort to reduce losses and return to profitability. A year ago, it shuttered 150 Sears and Kmart stores, sold off its high-profile Craftsman Tool line, and targeted 50 Sear Auto Center and 92 Kmart pharmacies for closing.

Toy retailer Toys "R" Us says it will close 180 of its stores in the coming months as it tries to reorganize its business under bankruptcy protection.

The company declared bankruptcy in September 2017, saying it need space to restructure more than $5 billion in debt. At the time, company CEO Dave Brandon cited an “increasingly challenging and rapidly changing retail marketplace” as the reason for the retailer’s current woes.

Much of the challenges have come from Amazon and Walmart, retailers with lower profit margins and stronger online channels.

“The actions we are taking give us the best chance to emerge from our bankruptcy proceedings as a more viable and competitive company that will provide the level of service and experience you should expect from a market leader,” Brandon wrote in a letter to customers, announcing the store closings.

The company said about 4,500 employees will be affected by the move, either by losing their jobs or being transferred to another Toys "R" Us store.

For consumers, it means they might have to travel farther to shop at a Toys "R" Us location. Here is the list of stores that will close between February and April:

Alabama

2600 McFarland Blvd. East, Tuscaloosa AL

335 Summit Blvd., Birmingham AL

Arizona

801 W. 32nd Street, Yuma AZ

12801 North Tatum Blvd., Paradise Valley AZ

9139 Indian Bend Rd., Scottsdale 4619 N. Oracle Rd., Tucson AZ

7000 E. Mayo Blvd., Scottsdale AZ

US 60 and Signal Butte Rd., Mesa AZ

Arkansas

2616 S. Shackleford Rd., Little Rock AR

California

42500 Jackson St., Indio CA

1189 Simi Town Ctr. Way, Simi Valley CA

26573 Carl Boyer Dr., Santa Clarita CA

960 Lakes Dr., Covina CA

1600 S. Azusa Ave., Puente Hills CA

2575 E. Imperial Highway, Brea CA

530 Westminster Mall, Westminster CA

20120 Hawthorne Blvd., Torrance CA

2550 Canyon Springs Pkwy S., Riverside CA

700 “A” Onstott Rd., Yuba City CA

2785 E. Bidwell St., Folsom CA

1330 Fitzgerald, Pinole CA

4505 Century Blvd., Pittsburg CA

600 Francisco Blvd., San Rafael CA

5461 Lone Tree Way, Brentwood CA

1400 Gateway Blvd., Fairfield CA

3938 Horton, Emeryville CA

2179 Monterey Hwy., E. San Jose CA

865 Blossom Hill Rd., San Jose / Almade CA

3520 W. Shaw Ave., Fresno CA

31250 Court House Dr., Union City CA

10640 Trinity Pkwy., Stockton CA

3900 Bristol Street, Santa Ana CA

3665 Grand Oaks, Corona CA

1240 W. Morena Blvd., Mission Bay CA

8181 Mira Mesa Blvd., Mira Mesa CA

1990 University Drive, Vista CA

Colorado

1150 S. Ironton, Aurora CO

Connecticut

376 North Universal Drive, North Haven CT

275 Union St., Waterbury CT

3491 Berlin Turnpike, Newington CT

169 Hale Road, Manchester CT

Delaware

1061 N. Dupont Highway, Dover DE

Florida

1625 Apalachee Pkwy., Tallahassee FL

1900 Tyrone Blvd., St. Petersburg FL

3908 West Hillsborough Avenue, Tampa FL

6001 Argyle Forest Blvd., Orange Park FL

Spring 708 West State Rd. 436, Altamonte FL

21697 State Road #7, Boca Raton FL

10732 SW Village Pkwy., Port St. Lucie FL

450 South SR 7, Royal Palm Beach FL

2601 W.Osceola Parkway, Kissimmee FL

6001 West Sample Road, Coral Springs FL

3214 N John Young Pkwy., Kissimmee FL

Georgia

2601 Dawson Rd., Albany GA

2955 Cobb Parkway, Smyrna GA

6380 No. Point Parkway, Alpharetta GA

1155 Mt. Vernon Hwy., Dunwoody GA

6875 Douglas Boulevard, Douglasville GA

8160 Mall Parkway, Conyers GA

221 Newnan Crossing Bypass, Newnan GA

132 Pavilion Parkway, Fayetteville GA

Indiana

3928 E 82nd Street, Indianapolis IN

8800 US 31 South, Greenwood IN

Iowa

1211 E. Army Post Rd., S. Des Moines IA

8801 University Ave., Des Moines IA

Illinois

1610 Deerfield Rd., Highland Park IL

16 East Golf Rd., Schaumburg IL

295 Center Drive, Vernon Hills IL

5001 Lincoln Highway, Matteson IL

6420 W. Fullerton, Bricktown IL

7750 South Cicero Avenue, Burbank IL

5660 Touhy Avenue, Niles IL

Kansas

4646 W. Kellogg, Wichita KS

8500 W 135th Street, Overland Park KS

Kentucky

4900 Shelbyville Rd., St. Mathews KY

1155 Buck Creek Rd., Simpsonville KY

1965 Star Shoot Parkway, Lexington KY

Louisiana

137 Northshore Blvd., Slidell LA

Maine

6 Bangor Mall Blvd., Bangor ME

200 Running Hill Road, Portland ME

Maryland

8401 Mike Shapiro Drive, Clinton MD

Massachusetts

302 Providence, Dedham MA

70 Worcester Providence Tpk/Rt. 146, Millbury MA

50 Holyoke Street, Holyoke MA

217 Hartford Ave., Bellingham MA

6110 Shops Way, Northborough MA

Shoppers World Plaza, 1 Worcester Road, Framingham MA

Michigan

5363 Harvey Street, Muskegon MI

2620 Crossing Circle, Traverse City MI

5900 W. Saginaw Highway, Lansing MI

4923 28th Street South East, Grand Rapids MI

3725 Carpenter Road, Ann Arbor MI

3725 Washtenaw, Ann Arbor MI

Minnesota

14100 Wayzata Blvd., Minnetonka MN

170 89th Ave., Blaine MN

8236 Tamarack Village, Woodbury MN

900 West 78th Street South, Richfield MN

Mississippi

1003 Bonita Lakes Circle, Meridian MS

200 Bass Pro Dr., Pearl MS

Missouri

1901 Bernadette, Columbia MO

201 Silver Springs Rd., Cape Girardeau MO

5590 St. Louis Mills Blvd., Bridgeton MO

220 THF Blvd., Chesterfield MO

Nebraska

3505 S. 140th Plaza, Omaha NE

Nevada

2150 North Rainbow Blvd., Las Vegas NV

7020 Arroyo Crossing Parkway, Spring Valley NV

New Mexico

45 Hotel Circle, Albuquerque NM

North Carolina

801 Fairview Road, Asheville NC

7001 Fayetteville Road, Durham NC

3300 Westgate Drive, Durham NC

New Hampshire

29 Gusabel Avenue, Nashua NH

New Jersey

1280 Rt. 22 & St. James Ave., Phillipsburg NJ

137 Route 35, Eatontown NJ

100 Promenade Blvd., Bridgewater NJ

2700 Route 22 East., Union NJ

909 US Hwy 1 South., North Brunswick NJ

Rt. 541 & Cadillac Road, Burlington NJ

2135 Route 38, Cherry Hill NJ

7 Wayne Hills Mall, Wayne NJ

545 Route 17 South, Paramus NJ

98 Route 10 West., East Hanover NJ

Kids World 900 Center Drive, Elizabeth NJ

50 International Drive South, Mt. Olive NJ

New York

139-19 20th Ave., College Point NY

24-30 Union Square E, Union Square NY

5181 Sunrise Hwy., Sayville NY

5214 Sunrise Hwy., Massapequa NY

2335 Marketplace Drive, Henrietta NY

1569 Niagara Falls Blvd., Buffalo NY

401 Frank Sottile Boulevard, Kingston NY

708 Upper Glen St., Glens Falls NY

221 Wade Road Extension, Latham NY

2700 Central Park Ave., Yonkers NY

66 Metropolitan Ave., Middle Village NY

1350 Corporate Drive, Westbury NY

108 Veterans Memorial Highway, Commack NY

461 Lycoming Mall Cir, Williamsport NY

1530 Ridge Rd. West, Greece NY

Ohio

6251 Glenway Ave., Western Hills OH

2661 Miamisburg-Centerville Rd., Dayton OH

7841 Mentor Ave., Mentor OH

3610 West Dublin-Granville Rd., Dublin OH

Oklahoma

1119 SE 66th St., Oklahoma City OK

5609-E Rogers Ave., Fort Smith OK

560 Ed Noble Pkwy., Norman OK

Pennsylvania

100 Welsh Road, Horsham PA

6680 Peach St., Erie PA

3700 William Penn Highway, Monroeville PA

104 Bartlett Ave., Exton PA

2003 Cheryl Dr., Ross Park Mall PA

301 Oakspring Road, Washington PA

18/Valley View Dr., Beaver Valley Route PA

Rhode Island

300 Quaker Lane, Warwick RI

South Carolina

254 Harbison Boulevard, Columbia SC

South Dakota

450 E. Disk Drive, Rapid City SD

Tennessee

7676 Polo Ground Blvd., Memphis TN

5731 Nolensville Rd., Nashville TN

Texas

801 Mesa Hills Dr., West El Paso TX

9730 Katy Freeway, Houston TX

170 E. Stacy Road, Allen TX

7730 N. MacArthur Blvd, Irving TX

420 E. Round Grove Rd., Lewisville TX

13710 Dallas Parkway, Dallas Galleria TX

1309 W. Pipeline Rd., Hurst TX

5800 Overton Ridge Blvd., Hulen TX

Utah

4042 Riverdale Rd., Ogden UT

1122 Fort Union Boulevard, Midvale UT

Virginia

14173 Crossing Place, Potomac Mills VA

12153 Jefferson Ave., Newport News VA

Washington

3567 N.W. Randall Way, Silverdale WA

1325A S.E. Everett Mall Parkway, Everett WA

6104 N. Division Street, Spokane WA

Wisconsin

18550 W. Bluemound Rd., Brookfield WI

2161 Zeier Road, Madison WI

Toys “R” Us announced Monday that its U.S. and Canadian subsidiaries have voluntarily filed for Chapter 11 bankruptcy. The decision gives the company a chance to hold off its creditors and reorganize its business in an attempt to return to profitability.

The company said that it will use its court-supervised proceedings to restructure $5 billion in outstanding debt and invest in the long-term growth of the company.

“Today marks the dawn of a new era at Toys“R”Us where we expect that the financial constraints that have held us back will be addressed in a lasting and effective way,” said Toys “R” Us Chairman and CEO Dave Brandon.

Brandon cited an “increasingly challenging and rapidly changing retail marketplace” as the reason for the retailer’s current woes. He followed up by saying that filing under Chapter 11 will allow Toys “R” Us to strengthen its competitive position and improve the customer experience.

Stores still open for business

The filing comes at an especially challenging  time of year, as retailers across the U.S. are beginning preparations for what should be a busy holiday shopping season. However, the company has assured its customers that the filing will not result in mass store closures..

“As the holiday season ramps up, our physical and web stores are open for business, and our team members around the world look forward to continuing to put huge smiles on children’s faces. We thank our vendors for their ongoing support through this important season and beyond,” said Brandon.

The company said that it has thus far received over $3 billion in debtor-in-possession (DIP) financing from lenders, which it expects will aid in the restructuring process. On its restructuring informational page, the company says that the Chapter 11 filing only affects its U.S. and Canadian operations, which excludes its separate entities in Asia.

Toys “R” Us currently operates approximately 1,600 stores worldwide and employs nearly 65,000 workers.

You may notice fewer Applebee’s and IHOP restaurants in your travels over the coming year. DineEquity Inc., parent company of both chains, announced on Thursday that it will be closing up to 160 locations (up to 135 for Applebee’s and up to 25 for IHOP) over the next fiscal year.

DineEquity Chairman and Interim CEO Richard J. Dahl cited lagging sales at underperforming locations as the reason for the closings, but said that the parent company plans to open up dozens of new restaurants in an effort to improve the brands’ overall financial health and supply chain.

“We believe 2017 will be a transitional year for Applebee’s and we are making the necessary investments for overall long-term brand health and expect to see improvement over the next year,” he said.

“IHOP remains on solid ground, despite soft sales this quarter. I am optimistic about the growth in both effective franchise restaurants and system-wide sales.”

Dahl did not disclose which restaurants were being targeted to close. Currently, DineEquity operates more than 3,700 Applebee’s and IHOP restaurants in 18 different countries.

If you can't be 'em, join 'em. That might be the thinking behind Sears' announcement that it will begin selling its Kenmore products on Amazon.com.

For Sears, it marks the biggest distribution of Kenmore appliances outside of its brick and mortar stores and comes as Amazon continues to invade traditional retailers' space. Amazon recently announced the purchase of the Whole Foods chain, sending shivers through the supermarket industry.

In addition to the marketing deal, Sears also said that its Kenmore Smart room air conditioners are integrated with Amazon's Alexa app and are available now on Amazon. It will expand the distribution to include all Kenmore home appliances. On Wall Street, Sears stock surged on the news.

"We continuously look for opportunities to enhance the reach of our iconic brands to more customers and create additional value from our assets," said Edward S. Lampert, Chairman and Chief Executive Officer of Sears Holdings.

Will expand availability

Lampert says the move will "significantly expand" the availability of Kenmore appliances to U.S. consumers.

Sears Holdings, which also owns Kmart, has struggled in recent years as more retail sales have shifted to online channels. The company closed a number of stores in 2016, including 30 right at the end of the year.

As we reported then, Sears had lost money in each of the past six fiscal years as it continues to lose business to online retailers and other brick-and-mortar stores. Pairing itself with a retail juggernaut probably can't hurt, putting its key brand in front of more consumers.

Linking its smart appliances with Alexa may also raise the company's visibility. The company says its Kenmore skill for Alexa allows users to control their Kenmore smart-enabled home appliances with simple voice commands.

Customers can enable the skill in the Alexa Skill Store, link their account and then begin asking Alexa to interact with their Kenmore appliances.

Gymboree, the bankrupt children's clothing retailer, has announced it will close 350 stores following what it calls "a comprehensive evaluation of its retail footprint."

The review was called for under its court-supervised financial restructuring. Company officials say maintaining a smaller number of stores, in the most profitable locations, will enable the retailer to get back on its feet. Gymboree filed for Chapter 11 bankruptcy protection in June.

'Right-sizing the footprint'

“Right-sizing our store footprint is a central part of our efforts to ensure Gymboree emerges from this restructuring process as a stronger and more competitive organization, with greater financial flexibility to invest in our future," company CEO Daniel Griesemer said in a statement.

Griesemer said the company will continue to operate a majority of its stores, which carry the Gymboree, Janie and Jack, and Crazy 8 brands.

"This was a difficult decision to make, but we are confident that it is in the best long-term interest of our Company, our customers and our broader employee base," he said.

The 350 Gymboree and Crazy 8 stores to be closed are scattered around the country. The company said it has retained the services of Great American Group and Tiger Group to help manage the closing sales. Those sales are scheduled to begin July 18.

Two trends

Gymboree is a victim of two related trends. It has lost business to online, discount retailers but it has also suffered from a decline in shopping mall traffic. Most of its stores are located in malls.

Gymboree launched in 1986, during a time when the Baby Boom generation was in its peak child-rearing years. It offers coordinated children's clothing from newborn to size 10.

USA Today has assembled a list of the Gymboree stores targeted for closing. You can find it here.

There are many out there questioning Sears’ ability to survive in the retail market, including executives from Sears itself.

Further evidence of the retailer’s struggle surfaced in an announcement made Thursday, which detailed the closing of 20 more stores in several different states. The decision to close these locations brings the total number this year to 235. According to Business Insider, the total number of stores has diminished to 1,180 from 2,073 five years ago.

Employees from the latest batch of closed stores were notified Thursday of the decision, which came on the heels of 59 store closings announced the same day for Sears Canada. The full list of stores can be viewed below:

• Sarasota, FL – 8201 S Tamiami Trail
• Chicago, IL – 1601 N Harlem Ave.
• Overland Park, Kansas – 9701 Metcalf Ave.
• Lafayette, La. – 5715 Johnston Street
• San Diego, Calif. – 4575 La Jolla Village Drive
• Cockeysville, Maryland – 126 Shawan Rd.
• Hagerstown, Maryland – 17318 Valley Mall Rd.
• Roseville, Mich. – 32123 Gratiot Ave.
• Burnsville, Minn. – 14250 Buck Hill Rd.
• Watchung, NJ – 1640 Rte. 22
• Albany, NY – 1425 Central Ave.
• East Northport, NY – 4000 Jericho Turnpike
• Johnson City, NY – 601-635 Harry L. Drive
• Mentor, Ohio – 7875 Johnnycake Ridge Rd.
• Middleburg Heights, Ohio – 6950 W 130^th St.
• Toledo, Ohio – 3408 W Central Ave.
• Warwick, RI – 650 Bald Hill Rd.
• Friendswood, Tex. – 300 Baybrook Mall
• Houston, Tex. – 9570 Southwest Freeway
• Greendale Wis. – 5200 South 76^th St.

One new store

On top of all its store closing news, Sears did offer one brief glimmer of expansion on Thursday. The company announced the opening of its first Sears Appliances & Mattresses store in Pharr, Texas.

Sears says that the free-standing store will compete in two of its most competitive categories, with hopes that it will follow in the footsteps of a successful Sears Appliances store opened in Ft. Collins, Colorado in 2016, which has “surpassed projections.”

The new store will allow consumers to meet with experts for scheduled appointments and provide flexible options for ordering and picking up purchased items. The grand opening which is currently underway offers discounts of up to 40% on appliances and up to 60% on mattresses.

Back in April, Payless ShoeSource filed for Chapter 11 bankruptcy in an attempt to reorganize its business and return to profitability. Unfortunately, the company’s announced that part of that effort would involve closing many of its stores across the U.S.

“This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify…We will build a stronger Payless for our customers, vendors and suppliers, associates, business partners and other stakeholders though this process,” said CEO Paul Jones at the time.

Now it seems the company has decided on which locations will definitely be shutting down in its second wave of closings. According to court papers, the company has asked permission to close down 112 of its stores outright and will possibly close another 296 locations if it cannot reach an agreement with landlords to lower rent prices. However, company officials are hopeful that they will be able to work out a deal.

“We remain hopeful…negotiations will result in consensual modifications and rent concessions with respect to these additional stores and that many of the 296 will remain open,” spokeswoman said in a statement to Fortune.

The company has already made some inroads towards reducing its overall debt; according to a Wall Street Journal report, Payless has already made a deal with its lenders to reduce its $838 million in funded debt by 40% by offering equity stakes in the company and promising “significant recoveries.”

The company says it hopes to emerge from bankruptcy in August.

Sears Holdings has been in a downward spiral for some time now. On numerous occasions, we’ve reported on the company’s downsizing efforts.

At the beginning of the year, the company closed 150 Sears and Kmart locations and spun off its Craftsman Tools line. Recently, company officials stated in an SEC filing that there was “substantial doubt” that the franchise could continue on unless it found a way to raise additional capital.

Now, the company has announced that it will be closing 50 Sears Auto Center locations and 92 underperforming pharmacy operations in certain Kmart stores. The move is meant to help the company reach its $1.25 billion cost-cutting goal, which had previously been set at $1 billion.

"Consistent with our ongoing strategy of focusing on our Best Stores, Best Categories and Best Members, we will continue to take difficult yet necessary actions. As we sharpen our focus on profitable areas of our business, we will also continue to closely evaluate the longer-term viability of stores where a clear path to return to profitability is not in sight,” said Sears Holdings CEO Edward S. Lampert.

“We are determined to take all necessary actions to improve the performance of Sears Holdings and will leverage our lease optionality to reconfigure our stores and reduce capital obligations.”

The Chicago Tribune reports that no timeline has been given for the closings, but some employees were notified on Friday that they would soon be losing their jobs.

“We obviously don’t take these decisions lightly. But in order to be a more competitive retailer and return the company to profitability, we need to look for ways to streamline the operations,” said company spokesman Chris Brathwaite, adding that the full list of store closings had not yet been released.

You could think of modern retailing as a lifeboat that is taking on water. Every now and then, one passenger jumps (or is pushed) overboard and the boat rides a little higher in the water. For a little while. 

hhgregg is the latest to take the plunge, joining Radio Shack and countless others in the murky depths. Best Buy, J.C. Penney, and others may be feeling a little more buoyant today, but it's not likely to be very long before that terrible sinking feeling returns.

J.C. Penney recently started selling appliances, so it may see some benefit from hhgregg's demise. And with hhgregg overboard, Best Buy solidifies its position as the last-standing big electronics retailer, at least for now.

hhgregg filed for bankruptcy last month while it tried to find a buyer, but after meeting with more than 50 private equity firms and other potential saviors, it was obvious that there would be no lifeline, so the electronics and appliance retailer began jettisoning its inventory over the weekend. 

It expects to close all 220 stores by the end of May, displacing about 5,000 employees.

The bubble burst

You can blame all of this on Amazon and other online retailers, but analysts say there's another factor at play as well -- a retail bubble. America is simply "over-stored," as one observer put it recently.

Urban Outfitters CEO Richard Hayne said much the same in a recent Indianapolis Business Journal report, saying big malls added way too many stores in recent years -- many of them selling the same things.

“This created a bubble, and like housing, that bubble has now burst,” he said. “We are seeing the results: Doors shuttering and rents retreating. This trend will continue for the foreseeable future and may even accelerate."

Shopping malls already have hundreds of slots to fill, and the situation is likely to get worse, especially as "anchor" retailers like Sears and Macy's continue to close stores, or even sink from sight.

It's not doing much for job growth either. The Labor Depmartment reported Friday that retailers cut around 30,000 positions in March, the worst two-month showing since 2009.

In a recent report, we detailed how Payless was likely going to be filing for bankruptcy in the near future. Indications showed that the chain would be another in a long line of retailers who have had to close their doors due to poor performance and the dominance of online retailing.

And, on Tuesday, the company did indeed file under Chapter 11, announcing the closing of 400 of its worst-performing stores. Under Chapter 11 bankruptcy, Payless will have the opportunity to try to reorganize its business and pay back its creditors to stay afloat, but company officials predict a rough road ahead.

“This is a difficult, but necessary, decision driven by the continued challenges of the retail environment, which will only intensify. . . We will build a stronger Payless for our customers, vendors and suppliers, associates, business partners and other stakeholders through this process,” said CEO Paul Jones in a statement.

The company said that it will continue to operate its business and honor employee wages, insurance coverage, and any customer gift cards. However, the company is looking pretty down and out when it comes to their financials.

In its bankruptcy filing, Payless stated that it had no more than $1 billion in assets, but that its liabilities could be as large as $10 billion. Upon filing for bankruptcy, the company said that it will be closing 400 of its 4,000 stores across the U.S. The company has provided a full list of the stores that will be closing, as well as nearby stores that will remain open, here.

Someone soon is going to have to find a creative use for all the empty shopping mall real estate, as one retailer after another retrenches, retreats, or simply goes away.

The struggling discount shoe store chain Payless is the latest added to the critical care list. The company reportedly plans to file for bankruptcy as early as next week, according to a Bloomberg report. 

Bloomberg quotes company sources as saying Payless will initially close 400 to 500 stores as it looks for a way to keep at least some of its doors open during the bankruptcy process.

The growing dominance of online retailing is taking a heavy toll on brick-and-mortar stores, with many companies struggling to meet their first-quarter sales goals as conditions continue to deteriorate. 

Dominoes falling

Retailers have been falling right and left, the latest being Radio Shack, which earlier this month sank into bankruptcy for the second time and began closing its stores.

Earlier today, Sears, one of the most venerable names in retailing warned in an SEC filing that it may not be able to continue as a going concern.

In its filing, Sears noted that many of its competitors operate mostly online or through catalog sales and are not required to collect sales tax, putting brick-and-mortar stores at a disadvantage. Ironically, it is none other than Sears that is generally credited with popularizing the mail-order business, publishing its first catalog in 1888.

Payless would no doubt echo Sears' complaint, with an eye towards online shoe giant Zappos and other online shoe sellers that have taken a large chunk out of its market share.

Payless, founded in 1956 in Topeka, Kansas, operates more than 4,000 stores in 30 countries and has about 22,000 employees.

Sears Holdings, the company that operates Sears and Kmart stores, is voicing doubts about its long-term ability to stay in business.

In a filing with the Securities and Exchange Commission (SEC), the company said there is "substantial doubt" about its viability unless it can raise additional capital.

The retailer has struggled, along with many other brick-and-mortar retailers, as more consumer purchases have shifted to online channels like Amazon. At the same time, overall retail sales have flattened in recent years due to demographic trends.

'Materially adversely affected'

In a 10-K filing with the SEC, Sears Holdings candidly warned that unless it found a way to compete effectively in the increasingly competitive retail sector, its business could be "materially adversely affected." In the document, it summed up the problem.

"The retail industry is highly competitive with few barriers to entry," the company said in the 10-K filing. "We compete with a wide variety of retailers, including other department stores, discounters, home improvement stores, appliances and consumer electronics retailers, auto service providers, specialty retailers, wholesale clubs, online and catalog retailers and many other competitors operating on a national, regional or local level."

The company notes that some of its competitors are actively engaged in new store expansion while online and catalog businesses, which handle similar lines of merchandise, are often not required to collect sales tax.

"We also experience significant competition from promotional activities of our competitors, and some competitors may be able to devote greater resources to sourcing, promoting and selling their products. In this competitive marketplace, success is based on factors such as price, advertising, product assortment, quality, service, reputation and convenience," the company said.

Problems are not new

Earlier this year Sears Holdings announced plans to transform its retail operations and possibly sell some of its assets, such as its Kenmore appliance and Die Hard battery brands, to raise much-needed cash.

As we reported in late December, Sears targeted about 30 Sears and Kmart stores for closing and announced it had secured a $500,000 line of credit to help it transform to meet the new retail realities.

Sears, meanwhile, has not been alone in its predicament. Just last month J.C. Penney announced it is closing around 130 of its stores in a bid to remain competitive.

It, like many other older, established retailers, announced it would shift more focus to selling online, a space currently dominated by Amazon.

J.C. Penney said last month that it would close about 130 stores as it tries to contend with falling traffic, and today it released a list of 138 stores that will be closing. 

The company said the stores on the chopping block generate less than 5% of sales revenue. With the closings, the company will have about 970 stores remaining. 

The stores slated for closing are:

Auburn Mall, Auburn, AL
Tannehill Promenade, Bessemer, AL
Gadsden Mall, Gadsden, AL
Jasper Mall, Jasper, AL
Military Plaza, Benton, AR
Chickasaw Plaza, Blytheville, AR
Riverview Mall, Bullhead City, AZ
Downtown Bishop, Bishop, CA
Sunwest Plaza, Lodi, CA
The Village at Orange, Orange, CA
Hilltop Mall, Richmond, CA
Fort Morgan Main St., Fort Morgan, CO
Glenwood Springs Mall, Glenwood Springs, CO
St. Vrain Centre, Longmont, CO
Broadway Plaza, Sterling, CO
Connecticut Post Mall, Milford, CT
Jacksonville Regional Shopping Center, Jacksonville, FL
Palatka Mall, Palatka, FL
Dublin Mall, Dublin, GA
Macon Mall, Macon, GA
Milledgeville Mall, Milledgeville, GA
Gateway Plaza, Thomasville, GA
Tifton Mall, Tifton, GA
Downtown Decorah, Decorah, IA
Crossroads Mall, Fort Dodge, IA
Penn Central Mall, Oskaloosa, IA
Quincy Place, Ottumwa, IA
Snake River Plaza, Burley ID
Eastland Mall, Bloomington, IL
Fulton Square, Canton, IL
Village Square Mall, Effingham, IL
Macomb, IL
Peru Mall, Peru, IL
Northland Mall, Sterling, IL
Centerpointe of Woodridge, Woodridge, IL
FairOaks Mall, Columbus, IN
Connersville Plaza, Connersville, IN
Huntington Plaza, Huntington, IN
Jasper Manor Center, Jasper, IN
Logansport Mall, Logansport, IN
Chanute Square, Chanute, KS
Downtown Great Bend, Great Bend, KS
Hutchinson Mall, Hutchinson, KS
Lawrence KS
Winfield Plaza, Winfield, KS
Cortana Mall, Baton Rouge, LA
Park Terrace, DeRidder, LA
North Shore Square, Slidell, LA
Berkshire Mall, Lanesborough, MA
Easton Marketplace, Easton, MD
Rockland Plaza, Rockland, ME
Lakeview Square Mall, Battle Creek, MI
Delta Plaza, Escanaba, MI,
Westshore Mall, Holland, MI
Copper Country Mall, Houghton, MI
Birchwood Mall, Kingsford, MI
Midland Mall, Midland, MI
Cascade Crossings, Sault Ste. Marie, MI
Central Lakes Crossing, Baxter, MN
Five Lakes Centre, Fairmont, MN
Faribo West Mall, Faribault, MN
Irongate Plaza. Hibbing, MN
Hutchinson Mall, Hutchinson, MN
Red Wing Mall, Red Wing, MN
Downtown Thief River Falls, Thief River Falls, MN
Winona MN
Maryville Center, Maryville, MO
Leigh Mall, Columbus, MS
Southgate Plaza, Corinth, MS
Greenville Mall, Greenville, MS
Bonita Lakes Mall, Meridian, MS
Oxford Mall, Oxford, MS
Capital Hill Mall, Helena, MT
Sidney Main Street, Sidney, MT
Albemarle Crossing, Albemarle, NC
Boone Mall, Boone, NC
Eastridge Mall, Gastonia, NC
Blue Ridge Mall, Hendersonville, NC
Monroe Crossing, Monroe, NC
Becker Village Mall, Roanoke Rapids, NC
Prairie Hills Mall, Dickinson, ND
Buffalo Mall, Jamestown, ND
Downtown Wahpeton, Wahpeton, ND
Fremont Mall, Fremont, NE
Downtown McCook, McCook, NE
Platte River Mall, North Platte, NE
Rio Grande Plaza, Rio Grande, NJ
The Boulevard, Las Vegas, NV
Dunkirk-Fredonia Plaza, Dunkirk, NY
Westfield Sunrise, Massapequa, NY
Palisades Center, West Nyack, NY
Findlay Village Mall, Findlay, OH
New Towne Mall, New Philadelphia, OH
Richmond Town Square, Richmond Heights, OH
St. Mary's Square, St. Marys, OH
Altus Plaza, Altus, OK
Ne-Mar Shopping Center, Claremore, OK
Ponca Plaza, Ponca City OK
Pioneer Square Shopping Center, Stillwater, OK
Astoria Downtown, Astoria, OR
Grants Pass Shopping Center, Grants Pass, OR
La Grande Downtown, La Grande, OR
Downtown Pendleton, Pendleton, OR
The Dalles Main Street, The Dalles, OR
Columbia Mall, Bloomsburg, PA
Clearfield Mall, Clearfield, PA
King of Prussia Mall, King of Prussia, PA
Philadelphia Mills, Philadelphia, PA
Bradford Towne Centre, Towanda, PA
Lycoming Mall, Pennsdale, PA
Willow Grove Park, Willow Grove, PA
Citadel Mall, Charleston, SC
Town 'N Country, Easley, SC
Palace Mall, Mitchell, SD
Northridge Plaza, Pierre, SD
Watertown Mall, Watertown, SD
Yankton Mall, Yankton, SD
Greeneville Commons, Greeneville, TN
Knoxville Center, Knoxville, TN
County Market Place, Union City, TN
Athens Village Shopping Center, Athens, TX
Borger Shopping Plaza, Borger, TX
Heartland Mall, Early, TX
El Paso Downtown, El Paso, TX
Marshall Mall, Marshall TX
McAllen, TX
University Mall, Nacogdoches, TX
King Plaza Shopping Center, Seguin TX
Bosque River Center, Stephenville TX
New River Valley Mall, Christiansburg, VA
Tanglewood Mall Roanoke, VA
Pilchuck Landing, Snohomish, WA
Pine Tree Mall, Marinette, WI
Marshfield Mall, Marshfield, WI
Richland Square Shopping Center, Richland Center WI
Rapids Mall, Wisconsin Rapids, WI
Foxcroft Towne Center, Martinsburg, WV
Downtown Sheridan, Sheridan WY

Abercrombie & Fitch is joining Macy's, Sears, and Kmart in the store-closing derby, saying it will close 60 stores this year on top of 53 closings last year.

More closings are likely in the cards as sales have been eroding in recent months, down 5% during the last quarter, the fourth straight quarter of declining sales, despite an attempt at rebranding undertaken by CEO Fran Horowitz, named to her job last month.

"Results for the quarter reflect a still challenging and competitive retail environment, however we continue to make progress on our strategic priorities. Hollister, our largest brand, achieved positive comp sales and the Abercrombie brand renewal continues, although it is a work in progress," Horowitz said in a report to investors.

The shrinking number of stores is having an impact on customers who go online to buy from A&F.

"I have been always fond of their apparel and have purchased a lot of items from them so far," said Meghna of East Lansing, Mich., in a recent ConsumerAffairs review. "However, I have been having a terrible experience with online shopping. With so limited number of stores, even returning an item is a headache. With one item, my refund was altogether $14 less than what I spent, simply because they will deduct additional charges, and their shipping was not free either. This made me sure that I would never purchase an item from them online."

Trying to recover 

The clothing chain has been trying to recover from a strategy of sexuality and exclusivity that most analysts believe backfired badly. Under ousted CEO Mike Jeffries, the brand used provocative ads featuring skimpily clad models.

The rebranding includes an attempt to go a bit more mainstream and also appeal to a slightly older crowd. 

The company insists it will remain competitive, although it has closed about a third of its stores over the last few years, leaving it with fewer than 750 stores in the U.S.

Horowitz said the company would continue to make "improvements to the customer experience through the roll out of store remodels, and ongoing investments in direct-to-consumer and omnichannel capabilities."

Electronics retailer hhgregg has long been short of capital letters and is becoming increasingly short of the kind of capital you can take to the bank, having lost money for the last three years.

The company says it is hoping to avoid a bankruptcy filing, but wise consumers will dig out any hhgregg gift cards they may have stuffed in the sock drawer and rush to redeem them, just in case.

Gift cards don't carry much weight in a bankruptcy filing. They sometimes lose all of their value and, even if they don't, consumers may find their money is tied up for months or years while other creditors pick the bones clean.

There's no official word from the company just yet. In a statement, CEO Robert Riesbeck said he was trying to keep the doors open.

“We’re focused on continuing to execute our business strategy, as planned, and returning this company to profitability,” he said in a prepared statement.

A familiar problem

The malaise affecting hhgregg is the one that retailers are all too familiar with -- too much competition from online retailers and discounters. In hhgregg's case, it's made worse by the likes of Lowe's and The Home Depot bringing their considerable muscle to appliance sales.

Even J.C. Penney recently got back into appliance sales, although today's announcement that Penney would be closing up to 140 stores may not do much to bolster its image as a giant of appliance retailing.

Earlier this month, hhgregg said that it was exploring "strategic initiatives ... to improve liquidity and return to profitability."

"We are committed to improving our results through our business strategy, including investments made to shift our focus to appliances and furniture, and additional expected cost reductions," Riesbeck said. "As the company undertakes this exploration process, we are focused on the execution of our business strategy and remain fully committed to serving our customers' needs."

J.C. Penney reported its first annual profit since 2010 today but in the next breath announced that it will close about 130 stores and two distribution centers as it tries to contend with falling store traffic.

Like other shrinking retailers, including Macy's and Sears, J.C. Penney said it will continue to build its online presence as strolling shoppers become an endangered species. In a press release, the company referred to the closings as "optimizing" its retail operations.

"We believe the relevance of our brick and mortar portfolio will be driven by the implementation of these initiatives consistently to a larger percent of our stores. Therefore, our decision to close stores will allow us to raise the overall brand standard of the Company and allocate capital more efficiently," said Marvin R. Ellison, chairman and CEO, in a news release.

It's not just Amazon and other online merchants who are strangling traditional department stores; it's also off-price retailers like TJ Maxx and Marshall's, both owned by TJX Cos., which this week said it would be opening about 1,800 stores.

Will remain competitive

Ellison said that even after the closings, J.C. Penney would remain competitive in the brick-and-mortar field. 

"Maintaining a large store base gives us a competitive advantage in the evolving retail landscape since our physical stores are a destination for personalized beauty offerings, a broad array of special sizes, affordable private brands and quality home goods and services. It is essential to retain those locations that present the best expression of the JCPenney brand and function as a seamless extension of the omnichannel experience through online order fulfillment, same-day pick up, exchanges and returns," Ellison said.

Could be, but not all shoppers find the experience quite so seamless.

"Amazon is killing these stores online and these idiots have no clue why?" said Adrian of Chicago, in a recent ConsumerAffairs review. "You don't have speed delivery, you don't even email a tracking number to your customers, and you don't even have ALL YOUR PRODUCTS ONLINE."

Nor does the in-store experience always win kudos from shoppers.

"I took my children shopping on Jan. 2nd at the Parks Mall in Arlington, TX as they had Christmas money they wanted to spend," said Kaylene of Ovilla, Texas. "My teenage son chose a Nike jacket he wanted and proceeded to go stand in the line which only had one cashier working. After waiting on him for at least 20 minutes or more and there were still 5-6 people in front of him, I told him just to put it back, we didn't have that kind of time."

Ellison, however, sees a bright spot, insisting that he has found the answer to high delivery costs.

“While many pure-play e-commerce companies are experiencing dramatically increasing fulfillment costs, we are pleased with the double-digit growth of jcpenney.com and how leveraging our brick and mortar locations is enabling us to offset the last-mile delivery cost,’ he said. “We believe the future winners in retail will be the companies that can create a frictionless interaction between stores and e-commerce, while leveraging physical locations to minimize the growing operational costs of delivery.”

We've seen it in the waves of store closings. Sears is closing a number of Sears and Kmart stores. Even stalwart Macy's announced it was closing 68 stores at the end of last year.

When it comes to retail purchases, consumers are either buying less or buying it online. And the stores that provide consumer options, as well as jobs for millions of consumers, are taking it on the chin.

The Deal, a business unit of financial website TheStreet.com, reports the number of bankruptcy filings by U.S. retailers nearly doubled last year over 2015, and the prospects look no better for 2017.

"The rate of Chapter 11 filings is often an indicator of an industry's health and that's bad news for retailers," said Ian Wenik, bankruptcy reporter at The Deal. "The number of large-liability retail Chapter 11 filings -- at least $250 million in liabilities -- nearly doubled in 2016 and that trend shows no signs of slowing down."

Teen retailers suffering

In particular, Wenik says retailers specializing in teen clothing are struggling, as teenagers no longer are drawn to fashion labels but look for experiences that will set them apart from their peers and enhance their cool factor.

In late January, teen retailer The Wet Seal announced the closing of all 171 stores after it was unable to find a buyer. It followed in the footsteps of The Limited, which previously shut down its business operations.

Wall Street is keeping a wary eye on publicly traded retail companies. Financial news website Marketwatch reports retailer's debt, sold in the bond market, now makes up a "significant portion" of Fitch Ratings "Bonds of Concern" list. It reports there's more than $4 billion in retailers' debt that is in danger of default.

But retailers' woes may not be completely due to consumers moving all of their spending to online channels like Amazon. Amazon stunned Wall Street this week when it's quarterly earnings badly missed estimates, primarily due to lower than expected revenue.

Are consumers spending less money? Not really. It seems to be where they're spending it, and for what, that's the bigger question.

On the heels of Macy's announcement that it is closing 68 stores, Sears Holdings says it will shutter 150 unprofitable locations. Targeted for closing are 108 Kmart and 42 Sears stores.

At the same time, Sears said it would sell its signature Craftsman Tools line to Stanley Black and Decker for $775 million.

The Craftsman deal is a complex one. In addition to the sale price, Sears will have use of a perpetual license for the Craftsman brand, royalty free for 15 years. It will also get a 15-year royalty stream on all third-party Craftsman sales to new customers.

Stabilize the company

"We are taking strong, decisive actions today to stabilize the company and improve our financial flexibility in what remains a challenging retail environment," said Edward S. Lampert, Chairman & CEO of Sears Holdings. "We are committed to improving short-term operating performance in order to achieve our long-term transformation."

Sears has fought strong headwinds as more retail sales have moved to online channels. It has consistently closed stores in recent years that have added to the company's sea of red ink. However, the losses have continued to mount.

In September, Moody's downgraded Sears liquidity rating from "good" to "adequate," which is just one grade above the lowest, "weak."

As for the stores that are closing, 10 of the Kmarts are in Michigan; seven are in Ohio; five are in Missouri; and five are in North Carolina.

List of stores

The stores will close in the spring. You'll find a complete list of stores to be closed here.

“The decision to close stores is a difficult but necessary step as we take actions to strengthen the Company’s operations and fund its transformation,” the company said in a statement.

While the stores targeted for closing together generated about $1.2 billion in sales over the past 12 months, Sears reports they turned in a net loss of about $60 million. By closing the stores and liquidating the inventory, company officials says they expect to generate much needed cash.

The company is also leveraging its real estate holdings to increase liquidity. It announced a secured standby letter of credit facility of up to $500 million.

Sears Holdings, which operates both Sears and Kmart department stores, reported third quarter earnings that were a disappointment to just about everyone, including Sears Holdings executives.

The company reports a net loss in the third quarter of $748 million. In the third quarter of 2015, the company lost $454 million.

While all brick-and-mortar retailers have struggled with the changing consumer landscape, Sears appears to have had a particularly hard time coping.

"We remain fully committed to restoring profitability to our company and are taking actions such as reducing unprofitable stores, reducing space in stores we continue to operate, reducing investments in underperforming categories and improving gross margin performance and managing expenses relative to sales in key categories," company CEO Edward Lampert said in a statement.

Getting small

In fact, Sears is responding to its market challenges by getting smaller. In a conference call with analysts following the earnings release, chief financial officer Jason Hollar said closing stores was just one way the company is trying to cut its losses.

“Focusing on our product categories, over the past several years, we have significantly reduced the size of our consumer electronics business, which has experienced operating losses,” Hollar said.

He also said that in the prior three months, Sears had reduced the size of its pharmacy business which operates in some Kmart stores.

“This business is composed of a number of profitable pharmacies and a number of unprofitable pharmacies,” Hollar said. “As we optimize our pharmacy footprint to generate better operating results, we are also mindful that the pharmacy category is instrumental in the lives of many of our members.”

Turnaround possible?

JC Penney went through a similarly painful period a few years ago and in recent months has appeared to make some headway in the marketplace. So is there hope for Sears, one of the oldest names in American retail, to turn things around?

The headline on a Salon piece about Sears – “Sears Death Watch Update” – isn't particularly reassuring. The piece notes this is Sears' 20^th straight quarterly loss and that key executives have recently left the company.

A Business Insider article calls Sears “The Titanic of Retail,” noting that the company is shuttering 64 Kmart stores this month, at the height of the holiday season.

The publication quotes Neil Saunders, the CEO of the retail consulting firm Conlumino, as saying the money Sears is raising through the sale of assets is not being used to grow the company, but simply to “prop up an ailing and failed business."

Sears Holdings is closing 64 Kmart stores in 28 states and laying off thousands of emloyees, according to a Business Insider report. The closings will start Sept. 22 and be complete by Christmas, the report said.

Sears has not yet confirmed the closings and, in fact, the press section on its website today features a release cheerily entitled, "The Holidays Ae Here and the Shopping Pros Know to Start at Kmart."

“We have been strategically and aggressively evaluating our store space and productivity, and are accelerating the closing of unprofitable stores as we have previously announced,” a Sears spokesman said in identical statements to all of the stores’ respective local news outlets, Consumerist reported.

Sears and Kmart have been endangered species for quite some time. In April, Sears announced that it would close 68 Kmart and 10 Sears stores.

Liquidity rating downgraded

The closings were foreshadowed a few days ago when Seritage Growth Properties, which owns stores leased by Sears and Kmart in many locations, filed an SEC document saying Sears expected to vacate 17 of its properties by the end of the year. 

Moody's last week downgraded Sears liquidity rating from "good" to "adequate," which is just one grade above the lowest, "weak."

"The ... rating reflects our view that Sears will continue to rely on external financing and the monetization of its alternative assets to fund its operating losses," said Moody's vice president Christina Boni. "We recognize the risks associated with relying on these sources and continued shareholder support to finance its negative operating cash flow which is estimated by Moody's to be approximately $1.5 billion this year." 

Stores named

Here’s the complete list of store closings, according to Business Insider:

JC Penney has been struggling as of late. Fresh on the heels of its attempted recovery, the New York Post reported that the company eliminated jobs and froze overtime due to “unexpected light sales” in April.

Now, perhaps in another attempt at reinvigoration, Penney’s is getting into the business of selling appliances. This July, the company will begin rolling out appliance showrooms at nearly 500 locations.

The showrooms (as well as jcp.com) will include kitchen and laundry appliances from Samsung, LG, GE Appliances, and Hotpoint.

Aligns with consumer spending

The decision to incorporate home products and an appliance showroom was a strategic one. According to JC Penney’s chief executive officer, Marvin R. Ellison, the decision was based largely on opportunities afforded by the current housing market.

"The current housing market presents a lucrative opportunity to diversify our Home assortment and strategically align with consumer spending patterns,” Ellison said in a statement. By ramping up its Home department, the company hopes to connect with families and become a destination for home products.

Ellison also hopes this move will help “weather-proof” the company during seasonal periods of the year and increase its revenue per customer.

Partnerships with other companies, such as Empire Today and Ashley Furniture, will be tested to determine whether they warrant inclusion in more stores and markets. By the end of 2017, the company hopes to achieve $1.2 billion in earnings before interest, taxes, depreciation and amortization (EBITDA).

This isn't the company's first foray into the world of home furnishings. At one point in time, the company was credited with covering one-third of the windows in America.

Sears and Kmart stores have been sort of fading into the woodwork for the last few years, but now Sears Holdings is stepping up the pace. The company says it will close 68 Kmart and 10 Sears stores this summer, hoping to return to profitability by eliminating less profitable locations.

"The decision to close stores is a difficult but necessary step as we take aggressive actions to strengthen our company, fund our transformation and restore Sears Holdings to profitability," said Edward S. Lampert, Chairman and CEO of Sears Holdings. "We're focusing on our best members, our best categories and our best stores as we work to accelerate our transformation."

The 78 closures will leave about 1,500 Sears and Kmart stores. Here is the complete list of closings, as provided by Sears Holdings. 

J.C. Penney, a retailer once left for dead, is turning heads on Wall Street, perhaps because it has regained the respect of consumers on Main Street.

The proof was delivered in the company's fourth quarter and full-year earnings report late Thursday. Comparable store sales grew 4.1 % for the fourth quarter and 4.5 % for the full year.

The company said the combination of strong sales growth, better profit margins, and disciplined expense reduction resulted in full year adjusted earnings of $715 million, a $435 million increase.

"We are very pleased with our performance for the fourth quarter and full year,” J.C. Penney CEO Marvin Ellison said in a press release announcing the earnings. “Our focus on private brands, omnichannel and revenue per customer is clearly resonating as we continue to win market share in a competitive environment.”

Disastrous makeover recovery

Ellison probably has every right to be pleased since the company suffered what can only be described as a disastrous makeover and customer revolt just four years ago. For those who don't recall those events, here's what happened.

At the urging of activist board member Bill Ackman, J.C. Penney at the beginning of 2012 abandoned its long tradition of serving a middle class, middle aged, and middle-of-the-road consumer. The company hoped to replace that J.C. Penney customer with one who was younger and cooler.

It changed its brand to JCP and launched its offensive with the TV commercial below, which few people understood but old J.C. Penney customers universally hated.

Complaints

Complaints from long-time Penneys customers poured in to ConsumerAffairs.

"This is the worst ad of all time, stop it immediately," wrote Kathy, of Hillsboro, Ore. "We will boycott J.C. Penney until it offers an apology to all its customers!"

"I am complaining about the obnoxious television commercial aired announcing your new pricing campaign," wrote Carole, of Lakewood, Calif. "It has to be one of the most irritating, annoying commercials ever created for television. If you think this will make anyone shop at your stores, you are mistaken as far as I'm concerned.”

What Kathy and Carole didn't understand was that the ad was probably designed to evoke that reaction in them. To many industry observers, Penneys appeared to be firing its customers, with plans to replace them.

The old customers left, but the hoped-for new ones didn't arrive, at least not in the necessary numbers. Just over a year later, amid mounting losses, J.C. Penney went back to the future, reinstalling its former CEO and returning to many of its previous pricing and operational policies.

Enough of its customers have returned that the company now appears to be back on its feet. In fact, it's doing better than some of its rivals like Macy's and Sears, that have struggled in the increasingly tough retail environment.

Sears Canada is recalling Joe Boxer licensed boys 3-piece Eat Sleep Play Pajama Sets.

The PJ Sets do not meet flammability testing standards for sleepwear.

The company says it has received no reports of incidents to date.

The PJ Sets were sold in boys' sizes: small, medium, large and extra-large at Sears Canada retail stores between January 2014, and July 2014, for $29.99.

The affected manufacturer numbers and corresponding Sears item numbers are:

Consumers who have the recalled PJ sets should stop children from wearing them, and return the sets to their nearest Sears department store for a full refund if accompanied by a receipt of sale or Sears Card statement, or for the lowest selling price without a receipt.  

Robert Passikoff is president of Brand Keys, a retailing consultancy.

--

For nearly 100 years Sears, Roebuck & Co. was America's greatest retailer and consumers loved them. Hard to believe today? Well here's a bit from a 1949 song by Ray Gilbert, William Okie, and Al Gannay. The first verse went like this:

Dear Mister Sears and Roebuck:
I been sittin' here a-thumbin' through your book.
Page a hundred ninety-nine
Shows a stove that's mighty fine
And a feller in an apron like a cook.
Dear Mister Sears and Roebuck:
That electric stove's away above my class.
It's a beauty, yes indeed,
But the thing I really need
Is that man to teach me how to cook with gas.

It ended as follows:

Don't mean to fuss, poor Roebuck,
But you'll never fill my order, it appears.
If the shortage is acute,
I'm an easy girl to suit.
I'll shut up if you send me Mister Sears.

The "book" the song referred to was the Sears catalog, first published in 1888. It eventually came to be known as "the Consumers' Bible," offering catalogs as large as 500 pages long, featuring everything from phonographs to bicycles, milk pails to automobiles, even headstones and ready-to-assemble house kits.

Two years later, in 1896, you could order toys and groceries. It was a kind of 19th century paperback Amazon.com. In 1933, Sears issued the first of its famous Christmas catalogs, the "Sears Wishbook."

Based on actual market results, along with some actual market research à la our annual Brand Keys Customer Loyalty Engagement Index, it's apparent that there aren't a lot of consumers singing love songs to Sears today, and that Sears Holdings is wishing for happier days. Sears Holdings just announced they plan to close its flagship Loop location in Chicago this April, and will begin liquidating merchandise at the store next week.

Less Space, Fewer Stores Serves Better?

CEO Edward Lampert indicated that he believes Sears can better serve customers with less space and fewer stores. When you figure that one out, let us know. Sears ranked 4th (of 5) national Department Stores we track in the annual survey. The stores' own customers do the brand evaluations, but alas, for Sears this is becoming a smaller and smaller segment of the buying public.

Brands like Sears end up at the bottom of their respective lists because they fail to meet expectations consumers hold for what drives loyalty in their category. You've got to watch those expectations because they almost always move up and brands have a hard time keeping up in the best of circumstances.

Engagement and loyalty metrics prove it out: meet those expectations and you do well. Don't, and it always shows up on the bottom line because emotional engagement and loyalty metrics are leading-indicators of consumer behavior. And it's axiomatic that it consumers don't behave well toward a brand, it's not likely that the brand is going to do well.

How is Sears doing? Well, the struggling department store reported same-store sales declines of 7.4% earlier this month, with year-to-date sales down 3.9%. The closure shouldn't come as a surprise, though. Sears has been selling off stores and leases to raise desperately needed cash for a financial infusion to stem declining revenues.

Co-Founder Richard Sears was once quoted as saying, "If you buy a good watch you will always be satisfied, and at our prices a good watch will influence the sale of another good watch; and that's our motto: "Make a Watch Sell a Watch." Today a better motto for Sears Holdings would be: "Watch Those Expectations, Sell A Lot of Product."

We often hear from readers whose complaints boil down to “As a customer of this particular company, I am thoroughly unhappy with the behavior of said company’s employees.”

But sometimes, honestly, it’s not the employees’ fault; they’re working under conditions that make it impossible for them to do their jobs well (from a customer's perspective). For example, many a fast-food customer has been annoyed by constant upsell attempts: “Hi! I'd like a small hamburger, nothing more. No, I don’t want fries with that. No, I don’t want to supersize it. No, I don’t want a hundred-ounce soda for only 50 cents extra, just a burger. No, I don’t want….”

Annoying as this is, 99.99 percent of the time it’s not the employees’ fault; company policy requires them to follow the upsell script, and if they don’t they’ll be fired.

We mention this because last month we told you the story of several people who bought Sears maintenance agreements and ultimately concluded they weren’t worth it; consumers complained of long waits for repairs, repairmen not showing up when scheduled, or repairmen not being offered at all. 

Last month, Sears did not respond to our request for comment (we sent them a fresh request before writing this follow-up story, and will let you know if we hear anything). However, this week we did get a response to our old article — not from a Sears spokesman but from Brian, who said he spent almost three years as a Sears repairman in an eastern state, but no longer works for the company.

A technician's view

“Even though this article is a month old, I just finally got to read it,” Brian said.  “I just want to hopefully clear up some things from a technician’s view. I am not by any means standing up for Sears or representing Sears. In all honesty, I do not like their practices or treatment of employees and customers.”

All right: a possibly disgruntled ex-employee, so take his claims with as many grains of salt as you deem necessary. But we found his stories very believable.

In our last article, we mentioned several customers who complained of waiting at home for Sears repairmen who never showed. (Even worse, many of these stood-up people had taken time off work to stay home—all for nothing.)

Brian sympathized, but said, “Maintenance agreement customers are not put at the bottom of any list … where a person lives can also affect why service takes too long, because some areas just do not have enough technicians available. Especially rural areas, where travel time is very high.  Also, Sears doesn't hire enough or keep enough people to handle the workloads.”

Kristine from Illinois was the woman who cancelled her maintenance agreement on suspicion that it put her at the bottom of the “list.” Here’s one of the anecdotes she told us in support of this theory:

“One day my dryer wouldn't work; I called Sears and someone came out the next day and fixed it. No maintenance agreement on the dryer. A few months later my freezer broke and I had a maintenance agreement. They couldn't come out for almost a week. It was fixed, but I lost hundreds of dollars in food.”

In response, Brian said, “I want to address the lady that got her washer fixed quickly, but had to wait a week for the freezer. Sears appliance technicians are specialized in either refrigeration, laundry, or cooking/dish. HVAC techs are a different department.  Each specialty has its own busy seasons. More than likely the laundry season was slow, so she was taken care of quickly. On the other hand the refrigerator season may have been busy, so she was a week out.”

Makes little difference

We must admit Brian’s explanation makes sense, and weakens the theory “Maintenance agreements put you at the bottom of a priority list”… though this distinction makes little difference to maintenance agreement holders forced to go a week or more without use of a vital appliance.

What about customers who complained about repairmen blowing off appointments again and again? According to Brian: “The main reasons for no shows is because the company sets the workload higher than can be accomplished.  We had technicians as high as 160% workload every day ….  Our routing team will not remove calls when it gets late.  We are expected to call the customers ourselves to give them the bad news.  I will admit I canceled calls and went home without contacting people at 9pm. I felt bad, but I had a 2-hour drive home and was getting tired of the customers chewing me out.”

Ouch. From the perspective of a customer who’s been waiting all day for a repairman who never arrives, a customer who maybe had to use some vacation or sick time to leave work in hope of meeting that repairman, we say: that’s absolutely irresponsible. But from the perspective of an ordinary person who dislikes being yelled at for any reason, let alone for refusal to accomplish the impossible … that’s absolutely understandable.

A San Diego law firm has filed a class action suit against J.C. Penney, accusing the beleaguered retailer of federal securities fraud.

The action, submitted by Robbins Arroyo LLP, alleges that the company and certain of its officers violated the Securities and Exchange Act of 1934. Specifically, the suit focuses on events of September 27, when Penney's stock suffered a huge one-day loss.

Previously, the company had announced it was issuing additional stock, using the proceeds to fund operations through the end of the year.

Misrepresentation?

The suit claims that was a misrepresentation. In fact, it says the company would have insufficient liquidity to get through year-end and would require additional investments to make it through the holiday season. The suit further claims Penneys was concealing its need for liquidity so as not to add to its vendors' concerns.

The suit says a September 26th analyst's report found the company would need to take on additional debt to ensure that it had enough cash to keep its business operations going. The following day Penney's common stock fell 13% on the New York Stock Exchange.

While the suit seeks to sign up unhappy Penney's stockholders, the heavy stream of complaints from unhappy consumers – so prevalent beginning with Penney's radical make-over in early 2012 – seems to have died down. A recent Penney's review at ConsumerAffairs, from a young bride-to-be shopping for a ring, was positively glowing.

Glowing review

“Other jewelry retailers and department stores just didn't have what I wanted, and they definitely didn't offer much when it came to prices,” wrote Jamie, of Broken Arrow, Okla. “I found my ring after taking my mom's advice to check JC Penney's site, and there it was! The ring was unique but somehow still classic in style, it was of excellent quality, and it was totally affordable. I showed my fiancé and, needless to say, a few months later I was wearing the ring and planning our wedding! At the proposal, it was the first time I had ever seen my ring in "real life" and it was even better and sparklier (sic) than I had imagined. He was even able to get it on sale and afford the lifetime care package! I have never been happier and I love my ring so much.”

A year ago the retailer was getting very few positive reviews as consumers objected to the change in course the store had taken under new CEO Ron Johnson, a former Apple executive installed at the urging of major board member Bill Ackman.

"Ackman officially exits stage left, having brought an American retailing icon to its knees," Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisors, wrote in a note to clients in August.

Radical changes

In January 2012 J.C. Penney, which had steadily been losing money and had the reputation as a rather conservative and stodgy retailer, attempted to remake itself as younger and hipper, hoping to pull customers from Target and other more contemporary retailers. In the process, they managed to alienate – some analysts think by design – the core J.C. Penney customer base.

The old customers didn't like the new pricing structure, which did away with sales and coupons. It didn't like the make-up of the stores, which jettisoned traditional brands and turned over floor space to vendors for kiosks. The old customers left and the new customers never showed up.

Now the old J.C. Penney is back, doing things the way they did before. Will it be enough to save the brand? Perhaps it's too early to tell.

But the fact that the store gets an online review from a happy consumer – and a young one at that – has got to give the retailer some hope.

New York Attorney General Eric T. Schneiderman has reached a settlement with Sears over a refund policy that Schneiderman charged was deceptive.

At issue is Sears' "Come Back Cash" promotion. In the promotion, a consumer who purchased merchandise above a "qualifying threshold" amount was given a $10 or $20 promotional award card.

However, if the consumer later returned some of the merchandise, Sears reduced the refund by a pro-rated amount of the value of the award card, even if the cost of the unreturned merchandise remained above the qualifying threshold and/or if the customer did not cash in the award.

The company, which operates 45 stores in New York, has agreed to pay $150,000 in fines and has already reformed the policy. 

"This settlement ensures that consumers who participate in a promotion of this type and later return merchandise will receive a full and fair refund - and not a penny less," Schneidermansaid. "Sears' refund policy improperly reduced refunds to customers whose purchases stayed above the qualifying threshold in the promotion, or whose promotional award card had already expired without being used." 

You've got to give JCPenney credit -- it isn't afraid to try new things. And when those new things turn out to be unmitigated disasters, it isn't afraid to swallow hard and admit its mistake. 

The struggling retailer lost nearly a third of its customers last year as it tried to freshen up its image, so now it's launching a new series of ads urging customers to come back, and perhaps the most noticeable thing about the ads is that they dispense with the "jcp" logo that ousted CEO Ron Johnson introduced and return to a simple JCPenney logo.

Johnson's strategy was to attract hip younger shoppers to replace the loyal, perhaps slightly ordinary customers who had kept the company afloat for decades. It was partly successful: lots of older customers bailed out but the hipsters were nowhere to be seen.

Johnson's biggest brainstorm involved getting rid of the frequent sales and promotions that JCPenney had previously featured. The chain is now reinstating sales, promotions, coupons and so forth although it is somewhat hampered in doing so since it burned through most of its cash during Johnson's tenure.

Mark up, then mark down

It's also hampered by the logistics of going back to the old way of doing things. During Johnson's era, there were fewer sales and markdowns. To get back to doing markdowns requires jacking up the Johnson-ear prices, as this customer, "S" of Great Meadows, N.J., discovered:

"Yesterday in the Rockaway Mall in Rockaway, NJ, I purchased a beachwear garment that had a sticker over the original price on the tag which showed the new price at $32. When I checked out, I was informed it was on sale for $24, which I paid.

"When I got home, I peeled the $32 price sticker off the tag which revealed the original price underneath the sticker was $20! So JCP, you raised the original price and then put it on 'sale' for $4 more than the original $20 price! A bit unethical, wouldn't you say!" S said.

Or as retail industry analyst Dr. Robert Passikoff put it in a recent ConsumerAffairs guest column: "They're going to raise the prices and then -- wait for it -- lower them, figuring that will give them the appearance of having provided consumers with a large discount at a sales event, so it will appear even more special and of greater value to customers. So, all in all, not so fair-and-square and really fake prices."

It's no secret

In its unusually frank ad, JCPenney admits its mistakes. 

"It's no secret. Recently JCPenney changed," the ad says. "Some changes you liked, and some you didn't. But what matters with mistakes is what we learn. We learned a very simple thing: to listen to you. To hear what you need to make your life more beautiful."

JCPenney frankly admits the error of its recent ways in the ads and openly begs customers to come back, closing with this rather urgent appeal:

"Come back to J.C. Penney. We heard you. Now, we'd love to see you." it says. 

In 2000 the average tenure of a CEO was 10 years. In 2008 it was down to 8 ½, signaling a slightly higher degree of corporate and brand accountability by boards and shareholders. Bet you Ron Johnson, the now former CEO of JCPenney wishes the retailer had a Time Machine Department about now. He only lasted 17 months.

We can'’t imagine that anyone is surprised. The results of his efforts were dismal. Grim. jcp (Mr. Johnson “modernized” the name and logo) lost $552 million in the 4th Quarter, nearly a billion dollars for the year, and sales fell nearly 29% versus a year ago. Oh, and JCPenney shares lost half their value during Mr. Johnson’s tenure. So really, really grim.

Mr. Johnson got rid of sales, instituted low-price guarantees, got rid of brands, got rid of “fake prices,” negotiated for new brands, brought back sales and coupons, planned to redesign stores, and then brought back “fake prices.” None of which worked. To paraphrase Yogi Berra, who apparently knew as much about department store retailing as Mr. Johnson, “if the customers don'’t want to come to the store, you can'’t stop ‘em.” 

A tough business

Nobody would deny that retailing has gotten tougher in the past few years, but equally so, brands have learned that if they can create some degree of emotional engagement (in addition to the rational stuff like Merchandise Range, Fair Pricing Strategies, and Customer Service), they are bound to see positive behavior toward the brand. And yes, it'’s gotten harder for retailers to provide meaningful and engaging differentiation as regards their brands.

But equally so, it'’s axiomatic that if customers behave more positively towards you, you ought to see positive results to your bottom line. But to do that you need to have something that customers can engage with. We won’t go into all the reasons consumers engage with Apple. That would be preaching to the choir. Mr. Johnson apparently thought JCPenney and Apple were on equal planes when it came to emotional engagement, and boy, was he wrong!

Customer engagement

According to our 2013 Customer Loyalty Engagement Index, when it came to Department Stores, overall engagement levels (versus a category Ideal, calculated to be 100%) were pretty close:

Kohl’s: 84%
Macy’s: 82%
Marshall’s: 81%
T.J. Maxx: 80%
Dillard’s/Sears: 79%

But not for JCPenney. Their engagement rating – according to their own customers – was 70%, which is low in any category, but very low in Department Store Retailing.

Anyway, JCPenny announced that Myron Ullman, who had been CEO until Mr. Johnson was brought in will be coming back. In a seven year period when Mr. Ullman was in charge shares were down 15%, so about 2% a year, which is a lot better than 50%. 

Talk about cutting your losses!
---
Robert Passikoff is President of Brand Keys, a research consultancy.

Well, it seemed like a good idea at the time. J.C. Penney was a respected brand with millions of loyal customers but, like every company, it was hoping to find a way to jazz up its image and grow a little bit.

So it looked to one of the world's most successful companies -- Apple -- and poached Ron Johnson, who had built Apple's successful chain of retail stores.

Johnson promptly embarked on a drive to rid Penney of its old customers by getting rid of the sales and coupons they had come to expect. He also jettisoned many of the brands and lines of merchandise Penney's customers were accustomed to. Instead he imposed a new pricing strategy no one quite understood and introduced hip new lines of merchandise.

Partly successful

The strategy was at least partly successful. The old customers went away. Angrily. But the new, hip consumers? Judging from the empty stores, they failed to get the message.

"Today I went to the Mall, straight to Penney's. It's been a while since I've been there. I usuallly buy bagfuls of clothes there. First the store was bare. I'm 58 yrs old and all I see is Junior stuff," said Bonnie of Chesapeake, Va., a few days ago, in a ConsumerAffairs posting. "There is no more Worthington, no more St Johns Bay, and the aisles have mannequins with tiny dresses on.

"All I can say is I will never return. The clothes look small, ugly and cheap. What a shame. I'm so sorry the old J.C. Penney's is gone," Bonnie said.

And so, after a stunning quarterly loss of half a billion dollars, the J.C. Penney board undertook a review of its new CEO's innovative policies, and did not like what it saw.

After 17 months of declining sales and punishing losses, the board ousted Johnson and brought back his predecessor, Myron Ullman.

So everything will be fine now? Don't count on it. A lot of damage has been done and hundreds of millions of dollars thrown away. Whether Ullman or anyone else can get J.C. Penney back on its feet is anyone's guess.

Too little, too late

To his credit, Johnson recognized that his strategy was not taking hold but by then it was too late. "It was clear that withdrawing from our promotional model to a more everyday model has been harder than we anticipated," he admitted a few weeks ago.

Johnson embarked on a desperate attempt to turn things around by laying plans to revert to the old pricing policy, a move that brought harsh condemnation from marketing gurus, including branding consultant Robert Passikoff. Writing recently for ConsumerAffairs, Passikoff  put it this way:

"They're going to raise the prices and then -- wait for it -- lower them, figuring that will give them the appearance of having provided consumers with a large discount at a sales event, so it will appear even more special and of greater value to customers. So, all in all, not so fair-and-square and really fake prices. If you are as dumbfounded as we, join the club."

For this part, Ullman said he had not yet worked out what his recovery strategy would be. ""I wouldn't recommend that we go back to the way J.C. Penney was when I left. Things change," he said, according to the Wall Street Journal. But, he added, "There's no reason to try and alienate customers who want to try and shop at J.C. Penney."

There’'s a wonderful Yiddish reflection -- "The difference between genius and stupidity is genius has its limits." That may explain the difference between Apple stores and JCPenney/jcp. What’'s interesting is the strategies for both retailers were set by the same person –-- Ron Johnson, formerly SVP, Retail Operations for Apple, currently jcp CEO. It was JCPenney when he joined and announced his long and short-term strategies. 

Long term: re-do all of the stores in the 111-year-old chain into mini-boutiques-under-one-roof, which sounds really cool, but, alas, to do that you need time and money and jcp is running out of both. Short-term:– a plan that was going to reinvigorate the store and restore profitability,– stop what Johnson labeled “fake prices,” and move away from nonstop promotions and coupons with everyday low prices (like Wal-Mart) to “fair-and-square” pricing.

The change didn't work all that well, but in their defense, the Ellen DeGeneres commercials were fun. Until they cancelled the advertising and strategy, neither of which was working, and the regular sales, that Mr. Johnson had characterized as “simplifying” pricing. If that seems contrary to the previous “fair-and-square” positioning, we think that’'s a perfectly acceptable position for you to take, so go ahead. 

That was about six months ago and Mr. Johnson finally acknowledged that, "It was clear that withdrawing from our promotional model to a more everyday model has been harder than we anticipated."

You think? It wasn’t just harder; it was expensive, coming with a price tag of a $552 million 4Q loss, which is a lot of money and pretty much a sign that your strategy isn’'t working. So what'’s a CEO with a chain in a death-spiral of same-store sales to do?

Back to Square One

We’'re glad you asked, because Mr. Johnson has an answer to that question: go back to the original sales strategy they scrapped last year, and restore sales on a weekly basis. But if you do that, how do you protect your already tiny “fair-and-square” margins, where you’'re losing money big-time? 

Now you might think that was going to be a really difficult question to answer, but not so much, particularly for someone who came from a company where simplicity and elegance were the watchwords. It'’s been reported that Mr. Johnson’'s elegant plan is to raise jcp prices to their former, higher levels – the ones before the fair-and-square pricing – and then cut them. Simple, huh?

No, no, you read that right. They'’re going to raise the prices and then – -- wait for it -- lower them, figuring that will give them the appearance of having provided consumers with a large discount at a sales “event,” so it will appear even more special and of greater value to customers. So, all in all, not so fair-and-square and really fake prices.

If you are as dumbfounded as we, join the club. In a century where consumers are more marketer than fool, speak to each other before they speak to the brand, and have access to more digital information each day, how does Mr. Johnson figure this strategy hoax is going to bamboozle consumers? We’'d be fascinated to hear Mr. Johnson’s answer to that.

In the meantime, for those of you interested, the phrase "“fair and square"” dates back to the 16th century. “Fair” was spelled "“faire,"” and meant “aboveboard,” and “square ” meant “honest.” So aboveboard and honest. But given the circumstances, with their new, more modern jcp logo, and more contemporary consumers, perhaps jcp should consider a more recent tagline. One from 1941: Never give a sucker an even break!

---

Robert Passikoff is President of Brand Keys, a research consultancy.

Can a popular Canadian named Joe Fresh save a tired old American named J. C. Penney? We'll soon know. The troubled retail chain is opening Joe Fresh apparel shops inside 681 of its U.S. stores today, hoping to draw in new, younger customers to replace the ones it's driven away with its attempt to revamp itself.

"We want to become famous for irresistible style at incredible value every day," said Ron Johnson, Penney's embattled chief executive officer and former Apple retail wunderkind. "By introducing these exciting brands at truly affordable prices, we are making it easier for customers to look and live better every day."

Joe Fresh, as close as we can figure, is sort of the Gap of the North.  It's billed as Canada's favorite apparel brand, claiming to offer "classic style with a twist."

Beginning today, Joe Fresh's spring collection of "modern basics for women" will be presented in 750- to 2,500-square-foot shops in nearly 700 jcp stores. All of the apparel and accessories will also be available on jcp.com for under $70, the retailer said.

"Significant milestone"

"Building Joe Fresh shops inside jcp is a significant milestone because it makes us truly national, and now customers can buy Joe Fresh products online exclusively at jcp.com," said Joe Mimran, creative director of Joe Fresh. "The ability to broaden our reach reinforces the Joe Fresh brand promise, which is rooted in the belief that everyone deserves fresh style at fresh prices."

Having a bunch of "shops" inside the jcp stores is one of the key elements in Johnson's plan to reimagine the aging retail chain. 

The hope, obviously, is that Joe Fresh will bring a fresh start to jcp. It certainly needs something. Even skeptics were shocked earlier this month when the company reported fourth quarter earnings that were a disaster even by recent J.C. Penney standards. The retailer reported a quarterly loss of $552 million, amounting to $2.51 a share.

Company revenue declined more than 28%. Same-store sales plunged 32%, worse than the previously worst 26.1% in the third quarter. Online sales dropped a stunning 34.4%.

Besides plummeting sales, jcp has been enmeshed in a bruising court battle with Macy's and Martha Stewart, the sort of dispute that winds up makes all parties look bad.

Fresh enough?

Will Joe Fresh be enough to turn things around? Maybe, but if it's not, the result could be a lot worse than another bad earnings report. 

"If it doesn’t work, I think it’s going to get really ugly,” said one analyst quoted by Bloomberg Businessweek, echoing a sentiment that's become commonplace on Wall Street. 

Consumers aren't wild about the changes either. Angela of Carolina Shores, N.C., said she went to the Penney's in Myrtle Beach a few days ago and found it even emptier than the last time she was there.

"I did see 1 or 2 people cutting through to get to the parking lot but not shopping. I did find a blouse [but] lo and behold, there were no cashiers," Angela said in a ConsumerAffairs review. "I then stopped an associate and asked 'Where do I pay for this?' She took out an iPhone and asked for my credit card.

"I stood there with my mouth open. I proceeded to say 'Are you kidding, what is this all about?' She told me it was a new process now at Penney's. ... By the way, I completed my shopping at Dillard's. They are more people friendly!"

Diane of Menomonee Falls, Wis., blames the company's directors.

"You allowed this one CEO high-tech idiot to destroy what took a century to build. I am (was) a loyal JC Penney customer. I am 54 and ex-New Yorker who spent zillion hours shopping in my life while always hunting for a good sale, a good sale, which is something you took away! Why did you allow this to happen? Why did you stop the fun sales?" Diane asked.

"You allowed this non-retail person to end fashionable and affordable lines for ladies (who are not 15 and a size 0). Those people don't shop in JC Penney's anyway. You lost the middle age shoppers like me. You never had many of the 20 something's; the 30's don't like what you did either. So who do you have shopping besides your employees? No one," she said. "Get rid of Mr. High Tech. Let him turn Best Buy around and hire a few of your 50-something female employees who know what we like before it's too late. I won't be back until he's gone!"

Like Diane, Charlotte of Kingsport, Tenn., is a longtime customer who has scratched Penney out of her playbook.

"I have tried to keep an open mind about the changes being made at JCP, but I have reached the point that I am completely unable to see any improvements that have been made. All of the changes seem to be detrimental," she said. I received a $10 coupon last week, so I thought I would give it one more try. I was shocked since my last visit in early January. The store was so empty it looked like it was going out of business. Many of the customer service centers (cash registers) had been closed. I didn't find anything that I wanted to buy even with $10 off. All of the brands that I loved are gone. Ordering on the website is a joke. It's hard to find anything in stock. If the coupon had been for $100, I still would not have been able to use it. I can't believe the damage that has been done to this company and cannot imagine how it will ever recover."

See more consumer reviews of jcp

Sears Canada is recalling Nevada infant girl's shirts

The small ribbon row can easily detach posing a potential choking hazard. There are no reports of incidents or injuries to date.

The Nevada tee shirt was sold in sizes: 6 months to 24 months at Sears Canada retail stores between September 2012, and December 2012, for $12.99.

The Sears item numbers are as follows and can be found on the customer's receipt.

Customers who have the affected shirt should stop children from wearing it and return it to their nearest Sears department store for a full refund if accompanied by a receipt of sale or Sears Card statement, or for the lowest selling price without a receipt.

Sears Canada will post signs in all retail stores to advise customers of the recall.   

It came as something of a shock this week when J.C. Penney reported fourth quarter earnings that were a disaster, even by recent J.C. Penney standards. The retailer reported a quarterly loss of $552 million, amounting to $2.51 a share.

Company revenue declined more than 28%. Same-store sales plunged 32%, worse than the previously worst 26.1% in the third quarter. Online sales dropped a stunning 34.4%.

If Wall Street was surprised, ConsumerAffairs readers were not. A year ago, when newly installed CEO Ron Johnson instituted radical changes in marketing and product line-ups, long-time Penneys customers turned to ConsumerAffairs to vent their anger.

Hate it, hate it, hate it

“I hate the new pricing that J.C. Penney recently implemented,” Jeannette wrote in a post at ConsumerAffairs a year ago. “All of my coworkers, family and friends feel the same way. I hope the CEO or whoever that made these changes will change things back to the way they were or at least improve the pricing! I predict that many stores especially in my small community area will be closing if something does not change. Listen to your customers!”

Johnson, who ran Apple's retail business, instituted the changes in February, doing away with sales and coupons and going to what he called a three-tiered pricing system. He also initiated a more youthful, off-beat marketing approach, apparently designed to attract younger, hipper shoppers. In so doing, Penneys has managed to alienate a large portion of its customer base while failing to snag the new customers it covets.

In a blunt article this week, the Wall Street Journal noted the retailer has lost $4.3 billion since Johnson has been at the helm. That article prompted Lisa, of Rochester, N.Y., to rush to the retailer's defense.

At least one happy shopper

“I've had a super easy time finally finding things I love at great prices at Jcp,” Lisa wrote in a ConsumerAffairs post this week. “I saw the Wall Street Journal's article today & wanted to put in a good word for a company that makes shopping fun again.”

But Lisa is definitely in the minority among posters at ConsumerAffairs. More typical over the last year is Diane, of Menomonee Falls , Wis., who this week dropped a big, “I told you so!”

“Attention big stockholders of JC Penney, if their are any left, HEAR US. You allowed this one CEO 'high tech' idiot to destroy what took a century to build. I am (was) a loyal JC Penney customer. I am 54, ex-New Yorker who spent a zillion hours shopping in my life while always hunting for a good sale. GOOD SALE! Which you took away! Why did you allow this to happen?? Why have did you stopped fun sales? You allowed this non-retail person to end fashionable, affordable lines for ladies who are not 15 and a size 0. Those people don't shop in JC Penneys anyway. You lost the middle age shoppers like me.”

If Penney's shareholders and retail gurus want to figure out where Penney's went wrong, they might do well to read through the ConsumerAffairs reviews over the last year. They will not only find angry longtime customers like Diane but customers who are really trying to give the new makeover a try but end up frustrated.

Problems online

“I bought a complete Van Heusen suit, shirt, and shoes for my 10 years old son online at JCPenney.com,” writes Paul, of Freemont, Calif. The jacket to the suit was to be shipped about three weeks after ordering, due to backorder. The rest of the items were shipped within a week.

"After more than three weeks of waiting, I received a cancellation email from JC Penney informing me that the jacket is no longer available. A visit to a local JC Penney shows the same jacket/size is available on the rack for a full price instead of the sale price which was on sale when I placed my order. A call to JCP's customer service seemed like a run-around with no real solution to get it resolved. JCPenney just lost another loyal customer that had been shopping in their stores/on-line for years.”

Kathy, of Sheridan, Wyo., reports a similar experience. She reports ordering some blinds online and receiving a thank you email.

“After a week I went to check on the order but it said I had no order so I ordered the blinds again,” she writes. “My bank account showed a pending transaction for this order but eventually was not charged. I checked my order status and no orders where displayed. After a month I called JCP and they told me nothing was ever placed. I ordered my blinds somewhere else and received them within a week.”

Ironically, during this week's post-results conference call, Johnson raved about a new Oracle IT system that, presumably, should make sure Paul gets his suit and Kathy gets her blinds.

“The problem with JCPenney's IT strategy is that it needs the business to deliver results as well,” tech site ZDNet observed in its report on the conference call.

But if you ask a lot of our readers, J.C. Penney may be running out of time.

Since taking over as CEO at JC Penney, Ron Johnson has made it his stated goal to transform the stodgy retailer into the next big thing. The transformation began in January with edgy commercials and a new pricing structure that did away with sales and coupons.

So how's that working out?

It's fair to say it has yet to catch fire. JC Penney reported its third-quarter results today, showing a 26 percent decline in sales. Wall Street was prepared for a decline of 18 percent.

Third-quarter results

The company lost $123 million, or 56 cents a share in the July through September period. The loss was much bigger excluding one-time items. Revenue totaled $2.93 billion, but the Street was expecting $3.27 billion. If Wall Street was surprised by the showing, many long-time Penney's customers, and former customers who have railed against the changes these last 10 months, weren't.

"I have been buying jeans from JC Penney for as long as I can remember. I've been getting bombarded by emails for months now saying how great the new JC Penney is. My daughter and I went to get some jeans last night and were shocked at an empty-looking store," Christopher, of Hernado, Miss., wrote in a ConsumerAffairs post. "I was even more shocked about the tiny selection of clothes there was to purchase. The jean selection was the worst. JC Penney has lost a customer for good. Whoever decided to do the revamp should be fired."

Barbara, of Mechanicsville, Md., who also describes herself as a long-time Penney's customer, was turned off by the changes in her local store.

"I received an email from the new CEO about all the good things that were coming," she wrote to ConsumerAffairs. "This week, I went back to the store in California, Md., to again look for clothes for my husband. There was even less than a few months ago. When I looked for underwear for him, I found that same package of boxer shorts and no more new ones. I talked to a sales person and was told that she thought the company was targeting a younger customer base. Well, JC Penney, you should be a company for all ages. I will not come again to shop."

New concept

Johnson makes no secret that Penney's is looking for new customers who are attracted to his concept of transforming Penney's stores into a collection of small boutiques under one roof. In a statement, he says Penney's is "a tale of two companies."

"By far the largest part of our store is the old jcp, which continues to struggle and experience significant challenges as evidenced by our third quarter results," Johnson said. "However, the new jcp, centered around the shop concept, is gaining traction with customers every day and is surpassing our own expectations in terms of sales productivity which continues to give us confidence in our long-term business model."

During the quarter, Penney's opened shops under the Levi's , Izod, Liz Claiborne, The Original Arizona Jean Co., and jcp brands. The company also opened 38 Sephora inside jcpenney stores, bringing the total to 386. Yet the shops remain a small part of overall sales.

Johnson said he's confident that, given enough time, the shops concept will catch on and Penney's will attract a new set of customers who will return the company to profitability.

At the beginning of 2012 retailer J.C. Penney, under the new leadership of CEO Ron Johnson, embarked on a number of bold, dramatic changes. The reaction from many long-time Penney's customers was not overly positive.

Since then the company has struggled and now reports it lost $81 million, or 37 cents a share, in the second quarter of the year. That's on top of the $163 million the department store chain lost in the first quarter. The second quarter loss would have been even steeper if not for the sale of some company assets during the period.

"We have now completed the first six months of our transformation and while business continues to be softer than anticipated, we are confident the transformation of J.C. Penney is on track," Johnson said. "The transition from a highly promotional business model to one based on everyday value will take time and we will stay the course."

Alienated consumers

From the start, many existing Penney's customers objected to the changes initiated under Johnson's new regime. In particular customers questioned why Penney's would do away with its sales and coupon promotions. The "fair and square" pricing system seemed to confuse some. Others objected to the company's television advertising.

Complaints to ConsumerAffairs, however, have tapered off in recent months, suggesting that angry consumers who vowed to stop shopping at Penney's have been true to their word. And the falling sales suggest that could be the case.

Perhaps more significant than the quarterly loss, J.C. Penney withdrew its guidance -- its expectations for the rest of the year to guide Wall Street investors. But rather than revising the guidance, as is common on Wall Street, it did not offer a new number. Back in May the company said it expected to earn $2.16 a share for the year.

Doubling-down

In June, amid falling sales, Johnson backtracked a bit, reinstating periodic sales at Penney's stores. Despite that concession, the company appears to be doubling-down on its transformational course.

"We continue to learn and adjust, and fully expect that our unique, specialty department store experience will drive J.C. Penney's long-term success," he said. "Our rock solid balance sheet will support the execution of our transformation and position us for growth beginning in 2013."

Perhaps, but there are plenty of doubters on Wall Street. Goldman Sachs analyst Adrianne Shapira told Forbes the company lacks "meaningful traffic drivers" without coupons and she was not surprised Penney's was forced to "retract what proved to be overly optimistic initial guidance.”

More changes are coming to J.C. Penney's, the department store chain that began the year proudly boasting it was throwing off the past and embracing the future.

This week the retailer abruptly announced that company president Michael Francis, who had been brought in from Target Corp. to help redefine the brand, was leaving after joining the company late last year.

Apple alum and CEO Ron Johnson will assume the duties of president as well as CEO. While Johnson has been the public face of the new Penney's, analysts say it was Francis who had responsibility for installing a new marketing and pricing plan, both of which have been slow to gain favor with consumers.

Off on the wrong foot

The company seemed to hit a sour note in early January when it launched an advertising campaign featuring screaming women, which alienated many of the store's customer base.

In February it rolled out its "fair and square" pricing, doing away with sales and coupons. By the time spring arrived, it was clear many of Penney's customers just didn't get the changes.

"I used to love to shop at J.C. Penney's, but that is no longer the case," Edna, of Albuquerque, N.M., wrote in a ConsumerAffairs post. "I am a woman and I can speak for a good majority of us! The pricing is not at all near a shopping deal, like we used to experience before this so called wonderful change! Just saying please change it back to our wonderful J.C. Penney's we once loved and once enjoyed the wonderful sales with coupons a woman so desires! We live for sales and coupons, what were you at the round table thinking?"

Customers get through

Apparently, enough customers like Edna spoke up that it got some attention. By early this month Johnson was telling investment analysts that the company was returning to its previous use of sales, discounts and coupons.

From all appearances Penney's changes were aimed at expanding its customer base from its traditional-value consumer to reach more upscale shoppers who frequented stores like Target, Macy's and Nordstrom. Instead, it appeared to drive away the very consumers who were supporting Penney's without pulling in new customers, or enough of them at least.

In the end Penney's bid for change proved costly. Penney's suffered a staggering $163 million loss in its fiscal first quarter. A year earlier, it had turned a $64 million profit.

There, they said it. “Sale.”

When J.C. Penney began 2012 with a new strategy, CEO Ron Johnson vowed the department store chain was finished with coupons and sales. From now on, it would be “fair and square pricing,” which was a three-tiered system of prices.

Johnson said customers wouldn't be hearing the word “sale” again. Instead, the company would call these events “month-long values.”

Customers posting on ConsumerAffairs didn't like it and apparently, enough others didn't like it either. Penney's sales plunged in the first quarter of the year. This week Johnson told a Piper Jaffray investors conference that it failed to effectively communicate with its customers so the word “sale” is returning to its advertising.

Consumers like Amanda, of Tao Baja, Puerto Rico, are saying “told you so.”

“Since the new CEO changed the strategy to Fair and Square, we have practically stopped shopping,” Amanda wrote in a ConsumerAffairs post. “The store is mostly empty, there are no good sales and I know many people have drifted to Macys instead.”

And Amanda says she is not at all surprised to see the company changing course again.

“Of course,” she wrote. “The coupons and sales were excellent motivators and I know that the stores sold more this way than the way it is now.”

But Penney's isn't abandoning all its changes. Johnson says in August the chain will start remodeling stores that will be turned into a number of separate shops. And Johnson said the new pricing policy actually helped draw in more vendors that will draw in new customers over time.

Change doesn't appear to be going over very well at J.C. Penney. The nation's fourth-largest retailer reports it lost $163 million in its fiscal first quarter of 2012, compared to a profit of $64 million in last year's first quarter.

The loss, which Penney's blames on falling sales, was so significant the company announced it was discontinuing its quarterly dividend.

There are plenty of consumers who might be saying “I told you so.” Penney's new CEO Ron Johnson initiated sweeping changes at the chain at the beginning of the year, rubbing many long-time customers the wrong way.

Johnson did away with Penney's discounts, coupons and sales and instead, initiated a “three tier pricing system.” Marilyn, of Hot Springs, S.D., says the result seems to be higher prices now at Penney's.

“I bought an Alfred Dunner blouse at Herbergers today for $18.20,” Marilyn wrote in a post at ConsumerAffairs. “I priced the exact same blouse at JCP and it was $40. I use to shop Penney's for Alfred Dunner but will no longer shop there.”

Turn-off

Sue, of Wilmington, N.C., says she was a long-time Penney's customer turned off by the changes

“Went through our Penney's a couple weeks ago after staying away awhile to recover from being shell-shocked by the commercials,” Sue wrote. “I've shopped Penney's for years! I was amazed to see a bustling well stocked and appealing local store morph into a dead-end! Didn't like the changes in merchandise, pricing or displays. I quickly walked through to get to another store. I have not been back!”

Even Penney's advertising campaigns have become a source of irritation for some shoppers. Pat, of Mountain City, Tenn., wrote to ConsumerAffairs about Penney's President's Day campaign back in February.

Annoying commercials

“I was annoyed by the screaming women commercial but I did not complain about it,” Pat wrote. “Their current commercial, however, should not be allowed on television. I am very offended to see a child dressed as Abraham Lincoln dancing around and grabbing his crotch. This type of child exploitation should be against the law. If this is the kind of thing that J.C. Penney is promoting, I certainly will not go into their stores.”

While Penney's may hope to eventually attract a new breed of shopper to its stores, it's losing Sue, Pat and Marilyn in the process. They, along with like-minded customers, are likely responsible for the sea of red ink.

Wall Street punished Penney's with a 14 percent one-day sell off in its stock, but most analysts say they still expect Johnson to turn things around, with a newly announced plan to cut costs by $175 million.

The financial media is focusing new attention on the changes at retailer J.C. Penney, pointing out that consumers appear to be resisting them.

Business Week reports J.C. Penney has taken a big hit in revenue, a result it says of the company's new pricing policy.

In an article headlined “Most Customers Don't Have A Clue About J.C. Penney's New Pricing Plan,” Forbes cites a survey showing 67 percent of shoppers said they did not know about changes to Penney's pricing policies.

Many of the consumers who do know about it don't seem all that impressed. Jeannette, of Enfield, N.C., doesn't mince words.

Hates it

“I hate the new pricing that J.C. Penney recently implemented,” Jeannette wrote in a post at ConsumerAffairs. “All of my coworkers, family and friends feel the same way. I hope the CEO or whoever that made these changes will change things back to the way they were or at least improve the pricing! I predict that many stores especially in my small community area will be closing if something does not change. Listen to your customers!”

New J.C. Penney CEO Rob Johnson instituted the changes in February, doing away with sales and coupons and going to what he called a three-tiered pricing system. Wanda, of Panama City, Fla., said she used to be a regular Penney's shopper until the changes went into effect in February. But over the over the weekend, she says she and her husband decided to see what had changed at their local store.

Prices are higher

“This was the first time my husband had been in the store since the change,” Wanda wrote. “He has always liked to shop for his clothes here and he also was in shock. We purchased three polos for him which costs us $60 plus. In the old days those same shirts would have cost us at least $20 less with our 'coupon' savings and 'rewards' we would received by doing the survey on the back of our receipt. St Johns Bay polos use to be around $10-$15 when on sale....now a SJB polos regular everyday price is $20. How is that fair and square?”

Candy, of Morgantown, WVa., says she also hates the new pricing, and is additionally upset that Penney's has discontinued its catalog.

“I believe the changes have made it clear that J.C. Penney no longer wants any money from senior citizens,” Candy wrote. “Senior citizens needed the catalogs and were good customers. Senior citizens needed the coupon sales to save due to fixed incomes.”

The arrival of Johnson at Penney's from his former position at Apple was cause for widespread optimism about Penney's on Wall Street. But now it appears that some of that optimism is fading. Forbes cites a report from a Citi analyst predicting J.C. Penney's sales will fall by $1.2 billion in 2012. Bloomberg reports Johnson, meanwhile, earned $53 million in compensation from Penney's last year.

While consumers like Jeannette, Wanda and Candy don't feel they are benefiting from Penney's make-over, Forbes sees some possible winners – Walmart, Target and Khol's.

Sears says it will close 62 more stores in the first half of this year. The stores targeted for closing include 43 Hometown Stores, 10 hardware stores and all nine of its Great Indoors stores, the Wall Street Journal reported.

Sears Holdings earlier announced plans to close about 120 poorly performing stores.

Last month, the ailing chain said it hopes to sell off 1,000 or more stores to raise up to $770 million, money it needs to help cover more than $3 billion in losses last year.

The company did not identify the latest stores on the choppng block but said that employees of the stores have been notified.

A complete list of the closings is available here. 

A few months ago, shoppers were shocked to learn that Sears Holdings Corp. planned to close as many as 120 Sears and Kmart stores. Now, the ailing chain says it hopes to sell off more than 10 times that many stores to raise up to $770 million, money it needs to help cover more than $3 billion in losses last year.

Sears says it has already found a buyer for 11 of its stores -- General Growth Properties, the shopping mall owner where the stores in question are located.  It also intends to spin off a separate company to control about 1,250 small franchised stores that sell Sears products.

But what happens to the rest of the 126-year-old chain remains in doubt. The company could spin off other divisions, including the profitable Lands End, which Sears acquired before it was taken over by Edward S. Lampert, a hedge fund manager who critics say hasn't spent enough money to keep Sears stores attractive and competitive.

A particular sore point with many consumers is delays and misunderstandings surrounding in-home warranty and repair service.

"I am on my fifth week waiting for Sears to repair my GE washing machine under warranty," said Joan of Chester, Md. "They came out the first time one week and 2 days after my first call. Even though I told them the problem, they waited another week for a part to be delivered. Then, they said it was the wrong part and waited another week for a part to be delivered. Then, they said the two parts were defective because they were not new parts but Sears remanufactured parts, and had to order more parts, yes another week for delivery."

For all its business woes and all the complaints it generates to ConsumerAffairs and other online review sites, Sears has managed to maintain a relatively good standing with consumers.  A computerized sentiment analysis of about 1.2 million consumer comments on social media and blogs over the last year finds Sears maintaining a positive net sentiment that peaked at 52% in October before falling to the low 30s in November and December. 

Sears, an iconic name in retailing and still the nation's largest appliance retailer, has been steadily losing market share to Wal-Mart, Macy's and  Home Depot, not to mention Amazon and other online merchants who offer nearly everything you can -- or, often, can't -- find at a Sears outlet.

Lack of customer service remains the biggest dislike identified by consumers, a perceived failing that may be hard to overcome as the struggling chain tries to hold down expenses in its remaining stores. On the other hand, the number of consumers complaining about customer service is about the same as the number who list customer service in the "plus" column.

While Sears insists it is in no imminent danger of running out of cash, its credit rating has been downgrded to "junk" and one large lender, CIT Group, has stopped financing loans to Sears suppliers. 

But if Sears is having trouble keeping its shelves stocked, that doesn't show up in the comments analyzed in the ConsumerAffairs survey, which found relatively few complaints about items being out of stock. 

J.C. Penney has refused to fire Ellen DeGeneres as its spokesperson, turning aside demands from an anti-gay hate group, OneMillionMoms.com, which objected to the choice of Ms. DeGeneres.

In an emailed statement yesterday, J.C. Penney said it "stands behind its partnership with Ellen DeGeneres.”

“This week Americans spoke out in overwhelming support of LGBT people and J.C. Penney’s decision not to fire Ellen simply for who she happens to love,” said Herndon Graddick, Senior Director of Programs and Communications at GLAAD, a lesbian, gay, bisexual and transgender (LGBT) media advocacy and anti-defamation organization.

A ConsumerAffairs.com sentiment analysis of about 200,000 consumer comments on social media confirmed DeGeneres' popularity, with a net positive sentiment in the 70%-90% range over the last year.

“But while Ellen has the nation on her side, in 29 states today, Americans can still be legally fired just for being gay," Graddick said. "Our elected officials should use this incident as yet another example of the support for legal protections for all hard working employees.”

Today, Americans can be fired in 29 states because of their sexual orientation, and in 34 states because of their gender identity.

Anti-gay group

OneMillionMoms.com is a project of the American Family Association, which has been designated as a hate group by the Southern Poverty Law Center (SPLC).

"Degeneres is not a true representation of the type of families who shop at the retailer. The small percentage of customers they are attempting to satisfy will not offset their loss in sales by offending the majority," the group said on its Web site. "Funny that JC Penney thinks hiring an open homosexual spokesperson will help their business when most of its customers are traditional families."

A poll on the Los Angeles Times site shows 94% of readers polled agree that DeGeners should not only maintain her post as J.C. Penney’s spokesperson, but call her “a symbol of equality.”

"Ellen DeGeneres is one of the most fun and vibrant people in entertainment today, with great warmth and a down-to-earth attitude. The millions who watch her on television and follow her through social media relate to her and trust what she has to say," said Michael Francis, president of J. C. Penney Company, Inc., as he announced her appointment last week.

"Importantly, we share the same fundamental values as Ellen," Francis said. "We couldn't think of a better partner to help us put the fun back into the retail experience."

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Sentiment analysis by NetBase

J.C. Penney's new TV advertising campaign, heralding its new discount pricing policy, is rubbing a lot of consumers the wrong way.

Since late last week, shortly after the commercials began airing, ConsumerAffairs.com has received dozens of complaints, mostly from women, registering strong, negative reactions. The barrage of complaints began last Friday.

"This is the worst ad of all time, stop it immediately," wrote Kathy, of Hillsboro, Ore. "We will boycott J.C. Penney until it offers an apology to all its customers!"

Obnoxious

"I am complaining about the obnoxious television commercial aired announcing your new pricing campaign," wrote Carole, of Lakewood, Calif. "It has to be one of the most irritating, annoying commercials ever created for television. If you think this will make anyone shop at your stores, you are mistaken as far as I'm concerned. I can't imagine anyone thinking this is good advertising. Remove it as soon as possible. IT IS ANNOYING!"

The 30-second spot contains no dialogue, only female consumers screaming when they see signs and advertisements announcing the store's supposed steep price reductions. It's not clear what that's supposed to represent, although it may be that the screaming women represent consumers who shop at J.C. Penney competitors. You can see the ad for yourself below and draw your own conclusions.

It turns out, watching the ad makes apparently makes consumers want to scream. L., of Frisco, Tex., calls it "the most annoying spectacle I have ever seen." Pamela, of DePew, N.Y., asks "how could you possibly think that this going to attract customers?" Kathi, of Orem, Utah, calls the ad "disturbing." "It does not encourage me to shop at your store," she said.

J. C. Penney -- or, as it now wishes to be called, jcpenney -- is implementing a new pricing and sales plan that its CEO says he thinks will make it "America's favorite store." Speaking to financial analysts in New York today, Ron Johnson unveiled "Fair and Square Pricing, making every day a great day to shop."

"The department store is the number one opportunity in retail today. We are going to rethink every aspect of our business, boldly pursue change, and create long-term shareholder value, as we become America's favorite store," Johnson said. "Every initiative we pursue will be guided by our core value to treat customers as we would like to be treated -- fair and square."

The new pricing plan consists of three types of prices, Johnson said:

• "Everyday, regular prices, which are always great;
• Month-Long Values, even better prices on the things you need now; and
• Best Prices, jcpenney's lowest prices, which always happen on the 1st and 3rd Fridays of every month as jcpenney makes room for exciting new merchandise."

The plan is sort of lunar, actually, based as it is on a monthly calendar. There will basically be 12 sales per year, each lasting a month and each tied to the products customers are likely to want at that time of the year.

"We want customers to shop on their terms, not ours. By setting our store monthly and maintaining our best prices for an entire month, we feel confident that customers will love shopping when it is convenient for them, rather than when it is expedient for us," Johnson said.

New brands

Johnson's ebullient comments no doubt added salt to the wounds over at Macy's, which is seething at Martha Stewart for signing up to provide products to the revamped jcpenney.  Macy's has sued Martha, claiming it had an exclusive right to sell Matha Stewart products.

But while Martha may be tied up in court for awhile, jcpenney will have comedian Ellen DeGeneres as its new "brand partner." Ellen began her career in her teens as a jcpenney sales person, we're told.

Oh, and by the way, as part of what Johnson fondly called the "reimagining" of the company founded 110 years ago by James Cash Penney, the brand will henceforth be known as jcpenney, as noted above.  This is what marketing people call a new "brand identity."

There's even a new logo -- pictured above -- which we're told "combines the elements that have made jcpenney an enduring American brand, by evoking the nation's flag and jcpenney's commitment to treating customers Fair and Square."

"The square frame imagery will be evident throughout all of jcpenney's marketing, to remind customers to frame the things they love," a news release from the newly-reimagined company gushed.

Bedraggled Sears Holdings, already planning to close 100 or more stores, has run into another hurdle -- CIT Group says it will no longer finance loans to Sears' suppliers who are awaiting payment from the company.

The loans, known as factoring, enable suppliers to finance their operations as they wait for payment from retailers.  Sears insists that CIT, the nation's largest factoring lender, provides only about five percent of the loans to its suppliers but the announcement is still likely to send chills through the Sears supply chain.

Sears has been struggling to overcome worries about its finances. All three major credit-rating firms have downgraded its debt in recent weeks, noting its declining earnings over the last year. Sears fell 5.8 percent to $31 at mid-morning Thursday as news of the CIT decision hit. The shares dropped 56 percent last year.

Sears Holdings has blamed poor holiday sales for the decision to close up to 120 underperforming stores, but analysts say the entire chain is underperforming, at least partly because it has failed to spend enough on freshening its stores so that they are attractive and inviting places to shop.

Inventory slipping?

If, on top on their already-dowdy appearance, Sears and Kmart stores begin to display empty shelves, sales could be further degraded. Judging from recent complaints to ConsumerAffairs.com, that may already be happening. 

"For the past 2 1/2-3 months I have been trying to order the Disney Botanical Baby Play Yard, only available at sears.com and Kmart.com," said Addie of Fort Riley, Kansas recently. "All four times I have ordered this item it has instantly gone 'out of stock.'" 

"For the last couple of years I have strictly shopped Kmart especially around the holidays but lately kmart has been falling behind on the availability of products," said Erica of Pearsall, Texas. "I have had to travel two hours to pick up my merchandise after completing the layaway plans."

"I ordered a combo toolbox for my husband on Dec. 4th with a delivery date of Dec. 23rd. When it didn't arrive, I called Sears and was told there was a backorder on the product," said Stacia of Jefferson, Ga. 

Sears Holdings has identified 79 of the 100 to 120 stores that it plans to close.  The company said the stores each employed from 40 to 80 people.  Sears said earlier this week that poor holiday sales contributed to the decision to begin stores that have not been profitable.

The rest of the closings will be announced soon, the company said.

"Given our performance and the difficult economic environment, especially for big-ticket items, we intend to implement a series of actions to reduce ongoing expenses, adjust our asset base, and accelerate the transformation of our business model,” said Sears Holdings CEO Lou D'Ambrosio.

“These actions will better enable us to focus our investments on serving our customers and members through integrated retail -- at the store, online and in the home.”