Sears looking for rent relief on last-standing stores

Sears looking for rent relief on last-standing stores

It’s struggling to hold onto less than a dozen stores it has left

Oct 9, 2024

In its heyday, Sears dominated the US from its headquarters in Chicago, once the country’s tallest tower. The retailer won over patrons with mail-order catalogues by taking advantage of the railroad system and the US Postal Service, but setting the stage for online shopping.

Now, Sears’ once-bright blue logo sits fading on abandoned, empty buildings in strip malls across the country, serving as a relic for passing drivers. And it’s struggling to hold onto less than a dozen stores it has left.

Sears is working with advisory firm Huron Consulting Group to help score rent concessions from its landlords of its remaining locations, according to people with knowledge of the matter, who asked not to be identified discussing the private talks. A representative for Huron declined to comment. Sears and its parent ESL Investments did not respond to requests for comment.

The department store chain, founded as Sears, Roebuck and Co in 1893 and hailed in the 1980s as America’s largest retailer, has become a shell of itself. In 2005, Sears was acquired by discount retailer Kmart, under the leadership of billionaire hedge fund manager Edward Lampert.

Over the next decade, the business was splintered into 30 different divisions, stores were shuttered and thousands of employees were fired. Compiled with years of underinvestment and plunging sales, Sears snowballed into bankruptcy in 2018 with 687 stores, down from 3,500 at the time of the Kmart deal.

Sears exited bankruptcy under the ownership of Lampert’s ESL Investments in 2022 with 22 stores in the US and Puerto Rico, but is now down to 11 locations, according to its website. It has four locations open in California, two in Washington, two in Florida and one in Massachusetts, Texas and Puerto Rico. Sears does not have any stores within 100 miles of New York City – it closed its last store in the area in 2021 – or Chicago, once its home city.

Big-box retailers have struggled to hold onto physical presences over the last four years, after the pandemic led to an uptick in online shopping. About 15 per cent of all retail sales in the second quarter were online, up from about 10 per cent in 2019, according to a report from the US Census Bureau.

Last year, Bed Bath & Beyond filed for bankruptcy, closing all of its stores and liquidating its assets in the process. It cited a continued decline in sales, with fourth quarter sales in 2022 dropping US$1 billion from a year prior.