Retailers' New Reality: Smaller Stores, Shrinking Sales

Just before the New Year came the first bit of holiday casualty news. Sears revealed it was closing stores after rough holiday sales, quoting “performance” and “the difficult economic environment.” The company intended to implement a series of actions to reduce ongoing expenses, adjust its base, and accelerate the transformation of its business model. One such specific action included closing 100 to 120 Kmart and Sears full-line stores.

The types of retailers that will continue to struggle in this market are the ones that are working from the same “playbook” historically, says Richard Walter, president of Faris Lee Investments in Irvine, CA. Sears is having issues, Walter says, because “they are not focusing on the retail needs of the consumers, and on giving consumers a different and more positive experience. Retailers need to continue to adapt during these economic times.”