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Concord Sears to remain open despite bankruptcy filing

  • The Concord Sears will remain open after the company announced it would be closing 142 of its stores as part of a restructuring effort. Caitlin Andrews / Monitor staff

  • The Concord Sears will remain open after the company announced it would be closing 142 of its stores as part of a restructuring effort. Caitlin Andrews—Monitor staff

  • The Concord Sears will remain open after the company announced it would be closing 142 of its stores as part of a restructuring effort. Caitlin Andrews—Monitor staff

  • The Concord Sears will remain open after the company announced it would be closing 142 of its stores as part of a restructuring effort. Caitlin Andrews—Monitor staff

Monitor staff
Published: 10/15/2018 5:31:34 PM

The Concord location for former retail giant Sears continues to survive the company’s ongoing decline.

Sears Holdings, which operates both Sears and Kmart stores, will close 142 unprofitable stores near the end of the year, with liquidation sales expected to begin shortly. That’s in addition to the closure of 46 unprofitable stores that had already been announced.

New Hampshire has seen the loss of its Manchester and Salem stores, and a Portsmouth location became the most recent sacrifice as the company continues to struggle. But with only six stores remaining in the state, retail experts figure the location and rent may be keeping the Capital City store in the game.

“I’m a little surprised the Concord store is one of the remaining survivors, with the mall not doing great from a retail perspective,” said John Sokul, the head of the real estate group at Hinckley Allen, who specializes in shopping centers.

The Steeplegate Mall’s struggle to retain its anchor stores – and their repurposing – has been well documented over the years. The recent closure of the Bon-Ton gave way to the rise of the Capital City Charter School, and the former Circuit City location is set to see the opening of an Altitude Trampoline Park.

But Sokul noted the Sears has its own separate entrance to the mall, meaning shoppers do not need to enter the mall to shop there. He questioned whether customers even reach the mall while shopping.

He also pointed out the store’s accessibility from the highway and its visibility from Loudon Road. “If you look at that section of Loudon Road, there’s been a lot of new retail,” he said. “...You have to drive by Sears to get to almost anywhere.”

Tom Gruen, chair of the marketing department at the University of New Hampshire’s business college, lives in Portsmouth and guessed the Concord location pays significantly cheaper rent than the Seacoast store.

But he also pointed out that standing alone isn’t good for a chain store. After the Portsmouth location closes, New Hampshire will have stores in Center Conway, Nashua, Newport and Swanzey.

“From the long-term perspective, its not good in a chain environment,” he said. “...If the next store is over 100 miles away, it will become difficult to maintain that store out of the spur. You want to maintain some sort of concentration … If you have one sitting out there alone, it’s going to be real expensive from an inventory standpoint.”

The company said Monday it has secured $300 million in financing from banks to keep the operations going through bankruptcy. In addition, it’s negotiating an additional $300 million loan from Edward S. Lampert, the company’s largest shareholder. 

The filing listed between $1 billion and $10 billion in assets while liabilities range between $10 billion to $50 billion.

Lampert has stepped down as CEO but will remain chairman of the board. A new Office of the CEO will be responsible for managing day-to-day operations.

Sears joins a growing list of retailers that have filed for bankruptcy or liquidated in the last few years amid a fiercely competitive climate. Some, like Payless ShoeSource, successfully emerged from reorganization in bankruptcy court. But plenty of others like, Toys R Us and Bon-Ton Stores Inc., haven’t. Both retailers were forced to shutter their operations this year soon after Chapter 11 filings.

Sears, which started as a mail order catalog in the 1880s, has been on a slow march toward extinction as it lagged behind its peers and incurred huge losses over the years.

“This is a company that in the 1950s stood like a colossus over the American retail landscape,” said Craig Johnson, president of Customer Growth Partners, a retail consultancy. “Hopefully, a smaller new Sears will be healthier.”

Others don’t share Johnson’s optimism.

“That a storied retailer, once at the pinnacle of the industry, should collapse in such a shabby state of disarray is both terrible and scandalous in equal measure,” said Neil Saunders, managing director of GlobalData Retail, in a note published Monday. “In our view, too much rot has set in at Sears to make it viable business.”

Sales at the company’s established locations tumbled nearly 4 percent during its fiscal second quarter. Still, that was an improvement from the same period a year ago. Total revenue dropped 30 percent in the most recent quarter, hurt by continued store closings.

“The problem in Sears’ case is that it is a poor retailer,” Saunders wrote in an analyst note last week. “Put bluntly, it has failed on every facet of retailing from assortment to service to merchandise to basic shop keeping standards. Under benign conditions, this would be problematic enough but in today’s hyper-competitive retail environment it is a recipe for failure on a grand scale.”

Tim Sink, president of the Greater Concord Chamber of Commerce, said the retail area around Loudon Road has not suffered the decline of the big box stores; pointing to smaller strip popping up directly across from the mall.

“All the other large retail stores on the Heights seem to be doing well,” he said. “There has to be a healthy retail market, not just locally, but drawing people from longer distances away.”

Sink pointed out the Sears serves as a focal point for the mall and can provide many services, like automotive and vision in addition to retail.

There’s certainly no shortage of competitors for Sears – D’Amante Drive alone boasts a Home Depot and a Target, and JC Penney continues to keep its Concord location open despite ongoing financial woes.

(Material from the Associated Press was used in this report. Caitlin Andrews can be reached at 369-3309, and on Twitter at @ActualCAndrews.)

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