Category: default || By jt3y

In need of some essential, but essentially boring items --- a watch battery, some cassette tapes, shampoo, allergy medicine --- I faced a trip last night to any of three discount palaces. North Bittyburg is roughly equidistant from a Wal-Mart, a Target and a Kmart.

Target is fine for some things --- Michael Graves pastel-colored teapot cozies, for instance --- but I've found their selection isn't exactly deep on many staple items. Wal-Mart often has a great selection, but I've tried to cut back on purchasing items from companies that lock their employees in and force them to work overtime. I also strongly suspect, but have no evidence, that Wal-Mart executives amuse themselves between buying trips to China by torturing rats with hacksaws. That left me with Kmart.

Actually, it left me with virtually a private shopping trip to Kmart, because I was one of only a handful of customers in the entire store. It was clean, well-lit, and had everything I was looking for.

It was also mostly empty.

I'm not much of a shopper, but over the past six months, I've been in several different Kmarts and Targets as well as the North Versailles Township Wal-Mart. Wal-Mart is always crowded. Too crowded --- I actually get a little bit uneasy from the crowds at times. I'm sure Wal-Mart has the same uneasiness, thinking of ways to spend the money. (The number 1 idea? Build more Wal-Marts.)

Target doesn't build stores quite as big as the largest Wal-Marts, but they're usually pretty crowded, too. It's interesting, too, that the customers largely fit the popular stereotypes. Wal-Mart attracts a lot of customers with big hair, NASCAR jackets and glitter on their fingernails, while Target seems to attract yuppies and young urban hipsters.

I'd make some sort of snide comment about the kinds of stereotypical customers I see at Kmart, but the last half-dozen times I've been inside a Kmart, I haven't seen enough people to develop a stereotype. (The only crowded Kmart I've seen was in Elizabethtown, Pa., a few months ago, when I was doing some traveling. It was Friday night, and I popped into Kmart to grab a few small items. But Elizabethtown is a college town in the middle of nowhere, and as best I could tell, there wasn't much else to do on a cold Friday night but hang out at Kmart.)

I have no special knowledge about retailing, though I've been interested in it for a long, long time, and over the past year or so, I've obviously been doing a lot of research on retailing for my other project. So feel free to take this prediction with as much salt as you like. But I will be very surprised if there are any Kmart stores left in five years. (Surprised and impressed with Kmart's management.) I don't see how they can stay in business for much longer by operating empty stores.

Kmart's financial disclosures don't exactly paint a rosy picture, either. Sales at Kmart stores declined 4.5 percent during October, November and December of last year --- the Christmas shopping season, traditionally the biggest three months for retailers. That, according to a Kmart press release, was actually a "significant improvement": During the previous three years, sales in the fourth quarter had declined 12.8, 14.9 and 13.5 percent, respectively. Egad.

Now Kmart has merged with Sears, Roebuck & Co., though the surviving company is, effectively, Kmart. To twist an old metaphor, it's like a man swimming in shark-infested waters offering to rescue a man in a leaky lifeboat. I'm probably in Sears on a more regular basis than Kmart or Target, and the Sears stores I frequent are starting to look a lot like Montgomery Ward stores did in 1997 or '98. That's not a good sign.

I think Sears has the potential to last a few years longer than Kmart, mostly on the strength of its hardware, appliances, paint and other hard-lines. In fact, I wouldn't be terribly surprised in a few years to see Sears divest its clothing and jewelry lines altogether and turn its stores solely into hard-line outlets, in which case I also wouldn't be surprised to see whatever was left of Sears sold off to Best Buy, Circuit City or Home Depot.

It's worth noting that some Wall Street experts think I'm all wet. The "new" Sears stock --- which is Kmart's old stock --- was up to $148 per share yesterday. It was trading at less than $60 a year ago. But more than one person I've talked with thinks that the value of Sears and Kmart is solely in their real estate --- all of those prime mall and shopping center locations --- and that their stores are, to put it in technical terms, "dooky."

Time will tell if Sears Holdings, nee Kmart, can turn things around. In the meantime, if you're in a hurry, I suggest you try shopping at Kmart. You might get lonely, but at least you won't have to wait long at the check-out.