End of an era: Sears closes 142 stores, declares bankruptcy

White Oak, MD - The American chain of department stores, Sears, has filed for bankruptcy. According to Business Insider, Sears filed for Chapter 11 bankruptcy Monday, Oct. 15, after suffering from sale declines and low customer traffic.

Sears CEO Eddie Lampert announced he would be stepping down from his position, although he will still remain the company's chairman. Sears will be closing 142 of its stores by the end of 2018.

In Maryland, Sears will be closing the following stores: Center Street, Westminster; 10300 Little Patuxent Parkway, Columbia; and 15700 Emerald Way, Bowie.

Many American businesses that have been around for decades have been declaring bankruptcy over the last five years. By the second quarter of 2016, 25,227 companies declared bankruptcy in the United States.

Lampert says Sears' bankruptcy is due in part to unfair media coverage, the rise of e-commerce, and shifts in consumer spending.

Yet, former Sears Canada CEO Mark Cohen says the bankruptcy of the 125-year-old company was destined after Sears closed its merger with Kmart in 2005. Both retailers had been struggling at the time and the merger was meant to combine their strengths.

"[The] notion that there's been some turnaround or some transformation in place is just plain bogus," said Cohen in an interview with CNBC.

While Lampert says Sears has made progress and has worked hard to unlock the value of the company's assets, former Toys-R-Us CEO Gerald Storch says that Sears has been lacking a competitive edge for years.

Compared to Best Buy, which is the household name for electronics, and Walmart, which gives consumers the best value for their money, Storch told CNBC that Sears didn't have an area where it excelled.

"[That's] something that really matters to the customer," said Storch.

Lampert has been keeping Sears afloat for years by selling off real estate, making ESL investments, and taking out billions of dollars in loans from his hedge fund. The goal, Lampert said, was to give the company the time it needed to execute a transformation.

However, many analysts are skeptical if the iconic American company will be able to make a comeback after its years of under-investment. Neil Saunders, the managing director of GlobalData Retail, says that Sears has declared bankruptcy because it's failed in every facet of retailing.

"[From] assortment to service to merchandise to basic shop-keeping standards," Saunders said. "That failure has manifested itself in lost customers, lost market share, and a brand that has become tarnished and increasingly irrelevant."

Up to 90 percent of a first impression  is based on trustworthiness and competence. Customers who are unable to see these qualities in a company are less likely to visit its store.

It isn't only outside analysts critiquing Lampert's moves. Many former Sears executives have also critiqued Lampert for managing the company from afar and visiting the company headquarters once a year for shareholder meetings.

In 2006, Sears brought in $53 billion in sales. That number has dropped to less than $17 billion in 2017. Although 79 percent of marketers use event marketing to generate sales and revenue, it isn't only poor marketing that has caused Sears' sales to drop over the last decade.

Many of the company's stores have also fallen into decay with collapsing ceilings and cracked floors. Empty floors and other maintenance issues have caused employees to hang bed sheets and shower curtains from ceilings to cover up store problems.

These issues have not only made Sears an unpleasant place to shop for many customers but have also impacted customer service experiences. Up to 73 percent of employees who grind it out at work have been known to be more stressed on the job.

"I'll never understand why Sears was allowed to flounder for so many years," said Robert Moon, a Sears shopper, in an interview with Business Insider. "Sears was the number one retailer in the world. They could have been pioneers in online purchasing."

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