The good news for Sears is that it plans to close a bunch of unprofitable stores, and hopefully that action will help the bottom line enough to allow it to cut prices and compete with Best Buy, Walmart, and online competitors.
But what must really hurt is the highly public announcement that CIT Group Inc. would quit extending credit to Sear's vendors. See Sears Supplier Loans Are Said to Be Halted by CIT Starting Today. Therefore, Sears would have to pay those vendors up front for orders. That sounds bad, but the report says merchandise financed by CIT accounts for only 5% of Sears' inventory. So unless other creditors follow suit, it shouldn't hurt that much.
I've got a soft spot for Sears. I admit it. The stores have always been a reliable place to buy tools, car batteries, tires, and plenty of other stuff. At one time wrenches and other non-electric tools bought at Sears carried a lifetime warranty. But times change, and that was back in the day when a tool would last a lifetime.
Hang in there Sears. Your fans are rooting for you, even those of us who sought out the cheaper prices elsewhere. If the store closures can bring down those prices, then the game is still on.
Making it political
The Sears store closings will inevitably result in employee layoffs and put those people out there looking for new jobs. The political issue of the day is Mitt Romney's work for a restructuring company that took over failing businesses and -- gasp -- laid off employees. So basically Sears is doing on its own what countless other businesses have done. That's the way the market place works. And thankfully no one is asking for a Sears bailout or some other form of government intervention.
Also, there's this nagging question. Lefties have left no doubt how much they hate Walmart. So would they cheer if Walmart was hurting? What about if Walmart decided to close a bunch of stores, would lefties continue to cheer big employee lay off? Just wondering how that all works together.
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