Dec
7
We have recently conducted a survey on Sears and Kmart stores in the U.S. which are owned collectively under the banner of Sears Holdings (SHLD).
We asked about store activity in this survey and 20% of respondents reported that stores were “less busy”. 20% negative response to questions in our survey is reason for concern given that traditionally store employees tend to be more positive or optimistic about retail store activity.
In addition to our temperature check on store activity we asked if the Sears and Kmart locations would be having PRE-CHRISTMAS sales and the answer across the board was yes. We also asked if there was excess inventory of items and the answer to this according to over 70% of respondents was “yes, excess inventory”.
The top selling items at Sears and Kmart locations were flat screen TV’s (25%), video games and video game consoles (20%) and Craftsman tools (10%). We did not see any strong showing for sales of clothing items or for consumer durables like washers and dryers. We believe that the heavy dose of electronics being sold at Sears could produce lower profit margins as we believe Sears is selling these items below the leading electronics retailers to help bring in business for these items.
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