Sears and Kmart News

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.

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.

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.

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.

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:

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. 

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.

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." 

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.   

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. 

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.”

Consumers may have spent more this holiday season, but they didn't spend quite enough at Sears and Kmart. Sears Holdings announced today it is closing as many as 120 Sears and Kmart stores in the coming year.

"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.”

Sears says that, as a result, it will close 100 to 120 Kmart and Sears full-line stores. The company expects these store closures to generate $140 to $170 million of cash as the net inventory in these stores is sold and it generates additional cash proceeds from the sale or sublease of the related real estate.

Final determination of the stores to be closed has not yet been made. 

Other profit-boosting measures include better inventory management, promotion and targeted pricing, with a goal of reducing fixed costs by $100 to $200 million.

Sears Holdings made the announcement as it disclosed comparable store sales for the eight-week holiday sales period. Sears Domestic sales were off 3.3 percent while Kmart sales were down 1.8 percent.

If the thought of plugging your car in each night seems off-putting, here's some good news: Sears has hooked up with Evatran to install wireless charging systems for electric cars for home and commercial use.

The Evatran system, called Plugless Power, means that you can simply buzz into your home or office garage and jump out of the car without having to worry that you forgot to plug it in.

This admittedly may not be one of life's big problems but having a car that won't go is a lot worse than having an iPad that isn't juiced up, so don't be too quick to laugh about it.

Installation will handled by Sears Home Services, which has been installing appliances, heating and air conditioning and electronics for decades.

"Sears is very excited to announce this agreement with Evatran to support the installation and servicing of these stations. We look forward to being one of the leaders in this growing industry," said Stu Reed, SVP and President, Home Services at Sears Holdings.

The companies say the benefits of the Sears-Evatran link-up include: 

• Simplified Purchasing: Evatran will offer Plugless Power systems with optional basic or standard home installation wrapped into the purchase price of the equipment; this full price may be included in the vehicle purchase or lease at the time of sale.
• Pre-Installation Site Visits: Site visits, as necessary to quote non-standard and commercial installations, will be completed in advance of installations.
• Timely Installation: Sears will receive automatic notification of a customer's installation request; Sears will contact the customer within one business day of equipment purchase to schedule home installation.
• Convenient Additional Services: Sears will offer ongoing service and maintenance to Plugless Power owners.

Sears installation network technicians will be trained and certified on the wireless charging systems and will work with Evatran to structure a comprehensive launch plan for aftermarket systems throughout 2012, the companies said.

Product offerings will initially focus on Chevrolet Volt and Nissan Leaf models but Sears and Evatran said they will quickly expand to include additional electric vehicles. Installation will be offered with the sale of each Plugless Power system and priced based on the customer's home and current electrical service. Sears will also offer commercial installation for electric vehicle fleet owners and managers.

Aftermarket systems will be available for installation starting in 2012 for Nissan Leaf and Chevrolet Volt models. A specific geographic rollout plan will be announced next year with final installation pricing for basic and standard home installations.

Kmart Holding Corp. is buying Sears, Roebuck & Co., for $11 billion, a deal that will create the third-largest retailer in the U.S.

Kmart emerged from bankruptcy just 18 months ago and not long ago looked like a candidate for the dust bin, but Kmart has been generating strong profits in recent months while Sears continues to languish.

The startling acquisition was engineered by Kmart Chairman Edward Lampert, the largest single shareholder in Sears. He holds about 15% of Sears stock through his ESL Investments Inc.

The merger isn't the end of problems for Kmart and Sears, both struggling to combat Wal-Mart, Home Depot and other powerhouse retailers. But the combined company will have greater buying power and more outlets -- 2,350 Sears and Kmart locations and another 1,100 specialty stores.

"The merger will enable us to manage the businesses of Sears and Kmart to produce a higher return than either company could achieve on its own," Lampert said in a statement. 

The combined company will be called Sears Holdings Corp. and will be based in Hoffman Estates, Ill., where Searnow s has its headquarters.

It's expected that several hundred Kmart stores will be converted to Sears stores and Kmart stores will begin carrying private-label Sears products like Kenmore appliances and Craftsman tools.

Lampert will be the chairman of Sears Holdings, while Sears CEO Alan Lacy will be vice chairman and CEO.

Sears Roebuck and Co. will pay more than $625,000, including approximately $125,000 in restitution to thousands of New Jersey consumers, to settle allegations that it ran auto centers that defrauded customers in connection with the sale of four-wheel alignment services.

The settlement was announced by New Jersey Attorney General Peter C. Harvey and Division of Consumer Affairs Director Reni Erdos.

The settlement agreement comes more than a year after the State filed suit against Sears alleging that the companys auto centers throughout New Jersey repeatedly violated the States Consumer Fraud Act by charging for four-wheel alignments on vehicles which did not allow for rear-wheel adjustments.

Many of the vehicles in question, the State alleged, were designed to undergo only two-wheel thrust angle alignments which involve adjustments to only the front wheels.

It's hardly the first time such accustions have been made. A 1999 class-action suit in Illinois claimed Sears defrauded customers nationwide of $400 million by charging for wheel balancing it did not perform. The suit charges that up to 30 million customers were defrauded between 1989 and 1994.

Sears settled a similar case in Florida recently by admitting no wrongdoing while paying $580,000 to the state and offering free wheel balancing to customers.

During the period at issue, Sears Roebuck owned and operated the nationwide chain of auto facilities under the names Sears Auto Centers and National Tire and Battery (NTB). At that time, there were 24 Sears Auto Centers and two NTB facilities in New Jersey. Sears continues to own and operate the Sears Auto Centers, but no longer owns and operates the NTB facilities.

Through its practices, Sears charged consumers for a service they did not and could not receive, Attorney General Harvey said. The agreement requires Sears to refund to New Jerseyans its ill-gotten gains.

Sears will pay New Jersey $500,000 to cover future Consumer Affairs initiatives. Sears will also pay the States costs an amount to be determined in connection with its investigation and litigation of the case against Sears.

Also as part of the agreement, Sears will pay $125,440 to 12,544 consumers in restitution, representing a $10 payment to the known consumers who, between Jan. 1, 1997 and Oct. 1, 2000, purchased a four-wheel alignment from Sears and who the State alleged should have been charged for a two-wheel thrust angle alignment. The $10 payments represent the price difference between the four-wheel alignment and the two-wheel thrust angle alignment.

Most people lack the technical expertise necessary to know what kind of services can and cannot be performed on their vehicles, Director Erdos said. As a result, consumers brought their vehicles to a place they trusted. Unfortunately, we allege, Sears used that trust against consumers.

The Division of Consumer Affairs has provided Sears with a list of the 12,544 affected consumers along with their addresses. Sears will make restitution payments directly to those consumers by April 2, 2004.

In addition, Sears will pay $10 to additional affected consumers who, within one year of the agreement, come forward with proof (in the form of a receipt or invoice) that they purchased four-wheel alignments from Sears between Jan. 1, 1997 and Oct. 1, 2000 for their vehicle where adjustments to the rear wheels were not possible or where rear adjustments were possible only with the addition of aftermarket kits/parts that were not installed by Sears at the time the alignment was performed. Such consumers should contact the Division of Consumer Affairs Consumer Service Center at 1-800-242-5846 or 973-504-6200 (if calling from outside the State of New Jersey).

"Zeener" of Hoffman Estates, IL

In response to Sears Maintenance Agreements - Con by WW, I offer the following. I have attempted to answer some of the accusations presented by the author and have confirmed some points he attempted to make but have provided a more complete picture.

WW provides some good information on Sears Maintenance Agreements. Unfortunately, he provides just as much misinformation and confusion in his expose. In my 13-year career with Sears, Ive sold appliances and electronics, worked as a sales manager coaching other associates in their sales techniques, and have done a stint in the companys home office in Hoffman Estates, Illinois. I think Im duly qualified to offer a few points that WW missed, and to clarify some errors in his report.

Done before it starts?

The obvious conclusion thats inherent in WWs report from the start is that a Maintenance Agreement is a bad buy. Thats only half right. A Maintenance Agreement, just like any other product sold at any other retailer, is a bad choice for some, and a good choice for others. The reason that Sears sells over 200 types of refrigerators is that one refrigerator wont fit every customers needs but each refrigerator will fit some customers needs. The choice is the customers.

The Maintenance Agreement works the same way. Its certainly not for everybody. But it is for somebody. And its clearly for more than the small minority that WW suggests must experience a product failure within 3 years of their purchase. Heres why. Extension? WW is correct when he points out that Sears wants to distance itself from extended warranties. But he fails to explain why.

An extended warranty is just that. It extends the basic warranty on a piece of merchandise. Most every item on the market today has a limited warranty and comes with a list of things that are excluded from warranty coverage. Coverage on the labor to repair something is usually excluded. So are consumable parts (like filters, batteries, toner, etc.). And since you only have warranty service when something goes wrong, an extension of that warranty is little more than insurance against failure, something you buy expecting the worst but hoping for the best.

The name Maintenance Agreement defines exactly what Sears wants this agreement to be: maintenance. Every mechanical product requires some form of maintenance. With a Maintenance Agreement, Sears assumes the responsibility for the regular maintenance of a piece of merchandise, taking much of that responsibility from the customer. That means that coils on a refrigerator are cleaned annually, maintaining the refrigerators energy efficiency and prolonging the life of the compressor by keeping it from having to work so hard.

That means that spark plugs in a lawn mower are replaced at Sears expense, not the customers. That means that lint in the dryer vent is removed by Sears, allowing greater airflow through a dryer, drying clothes more quickly, and using less electricity. That means that the customer is actually getting something for their money, rather than buying a pig in a poke that they may never see.

Is a Maintenance Agreement for you?

Maybe its not, if you know how to find the coils on your refrigerator and clean them, enjoy tuning up your lawn mower each spring, and can move your dryer and disconnect its exhaust for inspection. Sound too daunting? Sound too time consuming? Then maybe a Maintenance Agreement actually is a good buy for you. Beyond normal maintenance, a Maintenance Agreement also serves as that basic extended warranty. It puts the responsibility for repairs on Sears shoulders for the life of the agreement, meaning that a customer doesnt have to call GE for repairs on a refrigerator, Murray for repairs on a lawn mower, and Maytag for repairs on a dryer. There are no surprise bills when it is discovered that the reason a dryer wont dry is that a lost sock has blocked the lint filter. There are no extra fees for a trip charge for a service call to discover that a repair may be more expensive than replacing a well-worn product.

For someone whos comfortable looking over the shoulder of a service technician and understanding what hes doing, a Maintenance Agreement may not be a good purchase. For someone whos uncomfortable with mechanical repairs and never can quite be comfortable that a repairman is being completely honest when he presents his bill, a Maintenance Agreement may be a wise purchase.

A Maintenance Agreement also covers repairs that wouldnt normally be covered by a limited warranty. The previous sock example is just one such instance. Most anything that occurs during normal use (though not for commercial purposes) is covered by a Maintenance Agreement with no additional expense to the customer. Having trouble unlocking your oven after running the self clean cycle? Cant get your washer to raise the amount of water it pours into the washtub? Cant keep the microwave from burning popcorn? These types of calls are also covered at no additional charge not even the proverbial trip charge.

Again, the benefits of a Maintenance Agreement are obvious to some customers, worthless to others. But clearly, there is a difference between a basic extended warranty and Sears Maintenance Agreement. Changed Mind? In his essay, WW suggests that customers with Maintenance Agreements cancel them and get a portion of their money back. An excellent point!

WW correctly highlights an important difference between a Maintenance Agreement and a run-of-the-mill extended warranty. When you buy a warranty, youve paid your money, youve taken your chances. Not so with a Maintenance Agreement. Sears Agreement reads You may cancel at any time for any reason. If the manufacturers original limited warranty hasnt expired and you havent used the agreement, Sears will refund 100% of your money. Right up until the day the agreement expires, Sears will still refund a prorated portion of the cost of the agreement. Who else in retailing will do that? (Hint: nobody.)

Satisfied?

WW makes the claim that 70% of Sears customers are actually dissatisfied with their purchases of Maintenance Agreements. He asserts that he has researched internet message boards to arrive at his conclusion. This simply contradicts the known facts. Such methodology is clearly not scientific in its approach and does not present a valid statistical sample. WW rightly points out that the company is aware of exactly how many customers cancel the plan. If those numbers were high, certainly Sears wouldnt offer that option. If few customers cancel the agreement, can 70% of customers really be that dissatisfied?

The fact is that the company continues to offer and sell what the customer continues to buy and keep. A product with a high failure or return rate doesnt stay on the shelves long; no retailer wants to sell things that wont stay sold. Maintenance Agreements are subject to this simple logic, as well. History says that 70% of customers who buy a Maintenance Agreement will buy another one in the future.

Conflict?

WW makes the point that the customer and the salesperson are put at odds by Sears because Sears pays commission on the sale of Maintenance Agreements. But WW failed to complain that the company puts the salesperson and customer at odds when Sears pays commission on the sale of merchandise. Why does he see a problem with only one type of commissioned sales? A salesperson will generally make more commission by selling an item that is more profitable to the company. In no way does this put the salesperson at odds with the customer, however.

Sears trains all of its salespeople to sell the way it wants merchandise sold. Over the years, the process has had many names, but it has always been the same basic process. The salesperson is taught to ask questions of the customer to discover their needs, then show the customer the merchandise that has the features and benefits that that customer wants. The salesfloor of every Sears store is even arranged to facilitate that process, making it easy to narrow down the myriad of choices to just a few. The company researches its customer base with exit surveys of customers who didnt buy, focus groups of customers who shop elsewhere, and more. Salespeople are taught that three out of four customers come in to the store with a brand name in mind; of those customers, more than half will walk away if a salesperson tries to push them to another brand.

The message is clear: understand what the customer wants, and sell it to them. The training emphasizes that the customer is in the drivers seat, not the salesperson. Strong arm tactics and brainwashing arent taught and arent encouraged. Again, the logic applies to Maintenance Agreements as well.

WW is correct, however, when he explains that salespeople are taught that most customers will refuse to buy a Maintenance Agreement more than three times before theyll agree to buy one. The reason is simple: theyre used to valueless extended warranties and dont want any part of them. Just like the sales process for physical merchandise, the sales process for intangible goods requires the salesperson to understand the customers needs. The salesperson is performing a service for the customer when she understands fully what the customer wants and advocates a product that provides fits the bill. A salesperson is doing a disservice to the customer by limiting that customers choices. Again, the same logic applies. A salesperson is doing a disservice to a customer by failing to explain the differences between an extended warranty and a Maintenance Agreement but as always, the choice is the customers, not the salespersons.

Misleading?

WW suggests that Sears is misleading its customers by comparing the company to fly-by-night scam artists. He fails to mention, however, that the full terms of the agreement are given to the customer in writing, and that the same terms apply to all customers who buy the agreements. There is no uncertain risk involved. Few multi-level marketing companies provide a money back guarantee. Even fewer get-rich-quick schemes pledge in writing to allow a participant to cancel at any time for any reason. Sears does. The comparison is inadequate and inappropriate.

If there is any misleading going on, it is WWs juxtaposition of Sears against companies of questionable integrity. Common? Unfortunately, WWs attitude is a common one among many Sears salespeople. That attitude seems to stem from the fact that a Maintenance Agreement is an intangible. You cant see it, taste it, touch it, or smell it. Any intangible is a tougher product to sell than one that the customer can see and feel. It requires a salesperson to know every detail about that intangible, to understand its features and benefits, to be able to answer a customers natural concerns about buying something that they cant see. Its also noteworthy that WW is a former Sears employee something else thats common among salespeople with his attitude about sales.

In my career, Ive seen many come and go quickly. No salesperson who thinks he knows whats best for the customer and disregards the customers wishes can be successful and he shouldnt be. If a salesperson were to decide that he knew side-by-side refrigerators were a bad choice for every customer, or that top-loading washers were useless, hed quickly find himself unable to make many sales and would be answering his sales managers questions about his refusal to sell those particular product lines. This is precisely how WW describes his relationship with his own sales manager, revealing much about the success of his short-lived career at Sears. Again, the parallel to Maintenance Agreement sales hold true. If a salesperson isnt giving the customer an option, hes doing the customer a disservice. Worse, hes limiting his own opportunities to satisfy customers and turn a sale into a lifelong relationship.

October 11, 2002
New Jersey's attorney general has filed suit against Sears, accusing it of overcharging hundreds of customers at its car-repair centers around the state.

The lawsuit claims that Sears routinely charged for performing "four-wheel alignments," even though only the front wheels can be aligned on many vehicles. The suit also charges that mechanics told customers they would conduct a "free" vehicle inspection but then went on to charge for unauthorized repairs supposedly discovered during the inspections.

According to the lawsuit, Sears offers only a $59.99 four-wheel alignment and does not offer any discount on vehicles with a "live," or solid, rear axle. Rear wheels are not adjustable on such vehicles, which include most pickup trucks, sport utility vehicles and other light trucks and full-sized cars.

The lawsuit also charges that Sears mechanics routinely did repairs without providing a written estimate and often failed to tighten lug nuts or properly grind brake rotors.

Attorney General David Samson said the state will seek refunds for customers and penalties of up to $10,000 for each violation. The lawsuit lists 362 alleged violations.

A Sears spokesman in Chicago said the company knew nothing about the allegations until being served with a copy of the lawsuit and denied the alleged actions were part of a companywide policy. But both Samson and Gov. James R. McGreevey said the actions were widespread and pervasive.

"This was repeated over and over again. There was a persistent and pervasive pattern of fraud and deception," Samson said. He said there were at least 350 instances of the alleged overcharges for wheel alignments at 19 separate Sears stores in New Jersey.

McGreevey said Sears was responsible for "a moral erosion of business practices."

None of this is new for Sears. Ten years ago, it was accused of defrauding millions of auto repair customers. It finally settled that suit by offering $50 coupons to nearly one million auto-repair customers.

In 1992, Sears paid a $200,000 penalty in New Jersey after the state conducted an undercover investigation into alternator repairs. In that investigation, the state charged that Sears mechanics routinely disconnected a wire leading to the alternator and then recommended unnecessary alternator repairs and replacements costing up to $400.

July 20, 2001
Sears spinoff HomeLife abruptly closed its stores and filed for Chapter 11 bankruptcy with the U.S. Bankruptcy Court in Wilmington, Delaware, leaving thousands of consumers wondering if they will ever receive refunds for furniture they ordered but which has not been delivered.

The answer, unfortunately, is maybe. Those who paid by credit card should immediately contract their bank and dispute the charge. Those who used Sears cards should notify Sears. Customers who paid by check can stop payment if the check has not yet cleared their bank.

Those who paid cash, or whose checks have already cleared, will have to get in line with all the other creditors and wait for the bankruptcy court to sort it out. As unsecured creditors, consumers often get only a fraction of what is owed to them.

Sears founded HomeLife in the late 1980s. It sold a majority of the chain to Citicorp Venture Capital in 1998. As a minority stockholder, Sears allowed some of the stores to remain inside Sears stores and it provided financinc through Sears credit cards.

The company had sales of about $680 million last year and, with 130 stores in 26 states, was the eighth-largest furniture retailer in the country.

In its bankruptcy filing, the company said it owes more than $100 million to creditors. The closing came after HomeLife failed to raise $85 million in emergency funding.

July 11, 2001
Sears is taking off the make-up. The giant retailer said it's eliminating its own "Circle of Beauty" brand and eliminating the sale of other brands as well, including Avon Products, which it started selling last fall.

The Sears announcement hinted at additional changes in the works, calling it the "first element in a repositioning" of its 860 stores.

Sears isn't completely exiting cosmetics. It said it will continue to sell selected fragrances, bath and body products, including its own "Time Out" brand.

Sears began emphasizing its "softer side" in the mid-1990s but analysts said the effort was largely a flop. Cosmetics amounted to less than one percent of total sales as drug and discount chains offered larger selections and lower prices.

Avon kept a stiff upper lip. A spokesman said the company was disappointed that Sears was dumping beauty products just a few months before a major promotion campaign to support Avon's presence in Sears and J.C. Penney stores.

A class-action lawsuit filed in Illinois claims Sears defrauded customers of $400 million by charging for wheel balancing it did not perform. The suit charges that up to 30 million customers were defrauded between 1989 and 1994. A Sears spokesman called the charges "false and unsubstantiated."

Sears settled a similar case in Florida recently by admitting no wrongdoing while paying $580,000 to the state and offering free wheel balancing to customers.

The suit also claims that Sears destroyed the machines used in the alleged fraud and paid $30 million in "hush money" to employees and vendors.

Sears' auto repair operation has been plagued with fraud charges for years. In 1992, the company agreed to distribute over $46 million to customers to settle allegations that it systematically over-charged customers and performed unnecessary repairs.

Recently, the company settled another suit in Florida, this one claiming that Sears sold used car batteries as new ones. It agreed to pay $985,000 and offered free replacement warranties to customers covered by the action.

Sears is the nation's second-largest retailer.

by WW

Even though I am a former Sears saleserson, even I was in the dark until recently about the Sears Credit Protection Plan ono the Sears Credit Card.

"The Sears Credit Protection Plan protects the purchases you make with your Sears Card by replacing them if they get damaged or lost due to fire, flood, earthquake, etc. and it only costs $0.85 for every $100 balance you have on your card. It also makes you minimum monthly payment if you should become involuntarily unemployed or if you should pass away."

There are several parts of this pitch that are very misleading and give the wrong impression to both customers and even to the sales associates who present it.

To get the facts and conditions on it, don’t call Sears Credit Central themselves, because many of their customer service reps don’t know all the details themselves. Instead, call the Credit Protection Plan Office at (800) 366-2286 or (800) 776-2077 and they’ll be required to give you the real details, such as:

1. First of all, it does NOT cover your purchases if they get damaged by simple causes like rain, sun or even theft. It only covers your items in conditions of disaster.
2. Second, the customer is left with the impression that if they pay off the balance on the card in full each month, then they won’t be charged anything for the CPP. Most sales associates also have this misconception as well, as I did when I presented the CPP while opening Sears cards for people. I only found out the truth when I called the CPP office, which told me that the $0.85 per $100 charge applies to ALL cumulative charges made for the month, no matter when you pay off your balance. What this means is that if I charge $100 on the card one day, paid it off the next day, and did the same for ten days, I would have accumulated $1000 in total charges on the card. That means the CPP fee would come out to $8.50.
3. Finally, the worst thing of all about the CPP is that in order to collect on any claims, you can’t just call them to make the claim and collect it just like that. For example, if you were to claim involuntary unemployment status in order for them to make your minimum monthly payment for you on the Sears card, you would have to file through Allstate Insurance, go register with the Unemployment Office, get a written statement from your former employer to prove that you were involuntarily discharged from your job, etc.  I can’t imagine that the process for claiming replacements for purchases damaged by fire, flood, earthquake, etc. is much easier! So even if I bought a $15 dollar sweater with my Sears card and it got damaged in a disaster, I would have to go through several bureaucratic procedures in order to file that claim.

I suspect Sears knows that most sales associates and customers are misled about how the CPP really works, but is it in their best interests to educate you on that?

In fact, if you apply for a Sears card, get approved, but don’t sign up for the CPP, you’ll get called twice by Sears Credit Central to try to sign you up for it and you’ll also get an offer in the mail to sign up for it by returning the SASE. All they want you to do is sign up for it, no need to tell you much about it.