The following is from the Jan. 31, 2017, edition of The Dallas Business Journal. SMU's Ed Fox, associate professor of Marketing, provided expertise for this story.
By Korri Kezar
The woes of Sears may be the victories of competitor J.C. Penney Co Inc. (NYSE: JCP).
Sears is among several retailers – including Macy’s, The Limited and Aeropostale – to announce store closures in the past few months. Sears Holdings Corp. (Nasdaq: SHLD), which also owns the Kmart brand, said in January that it would shutter a total of 150 stores across the country, including 42 Sears department stores.
That leaves the company with fewer than 1,500 units. In 2011, it boasted 3,500 locations.
Sales declines have been credited for the closures. In its third quarter earnings, reported Dec. 8, Sears logged a 13-percent revenue dip and a profit loss of $748 million. . . .
J.C. Penney is also taking steps to diversify its sales past apparel, which dampened revenue in Q3. The retailer is adding to its product mix with initiatives like introducing furniture and appliances, improving its in-store salons, rolling out more Sephora store-within-a-store concepts and piloting flooring and HVAC services.
So while the two retailers have faced the same types of obstacles, analysts believe its likely Sears will eventually go under, while J.C. Penney will continue to rebuild its business.
“It’s becoming apparent that Sears is in what’s becoming a death spiral,” said Ed Fox, associate professor of marketing at the W.R. and Judy Howell director of the J.C. Penney Center for Retail Excellence at Southern Methodist University.
“J.C. Penney will be around in three to five years, and Sears may very well not,” he added.
Read the full story.