RadioShack and Sears Sufferings

Another possible hacking victim has been announced and it just so happens that it is Sears. As if this company didn’t need to be hurt anymore it now has been announced that it may have become the latest victim in this ongoing problem.

Of course, the keyword here is MAY be a victim as they are not really sure that they really are or not. Seriously here: why Sears is crying wolf when they may or may not be a victim? Certainly their customers should be kept more in the loop than just using the term “may be”.

No mention is given if Kmart, which is owned by Sears, is part of this possible attack. Since they both run similar register systems, I would say that they too are part of the attack.

It is sad when a company like Sears say that they may be a victim when companies like Neiman Marcus waited months to tell the world they were attacked. It seems that accountability is lacking in the retail industry.

I still believe that other retailers will announce attacks over the last few months including Staples. However, the longer companies wait, the more it will hurt their reputation and destroy their business. Hasn’t any retailer learned anything yet from the Target fiasco? Apparently not yet.

On another front, RadioShack announced this week that it plans on closing up to 1100 stores in the next few months. This would mean up to 20% of their stores would be gone. This is up significantly from the last round of closures announced a few months ago.

Apparently, sales to the retailer continues to slump to record levels causing the company to reevaluate itself. Why did they spend millions of dollars for a Super Bowl ad when they really couldn’t afford it in the first place?

So the real question is which stores will be closed and which ones may even be scaled back significantly.

My thought is that the stores that are going to be history already know who they are. It is just that the list has not been made public as they may not want to scare other retailers in the same areas to want to abandon the region as well. I also believe that many of the employees also know that their stores are closing as well. It is just that these employees are told not to talk to any media outlets as the company has not made any final announcements yet. Many of these stores have probably known for months that they were in line for termination and were warned that if sales didn’t pick up then they would close.

Unfortunately, nobody can make a customer buy anything at a certain store to try to save it from going out of business. What happens happens. Trying to force customers to make purchases will create a hostile environment that is bad for both the customer and the employee. However this is exactly what some companies do such as Staples.

What will be most interesting is to see whether most of the stores that will close are located in malls, strip malls, downtown centers, or standalone locations. My thought is that it might be an equal mix of all of these with more mall locations closing than anything else as malls are failing and many stores are starting to leave malls.

Speaking of company exits, the pizza location Sbarro seems to want to go bankrupt. They closed 155 locations in the last week including the one in the local mall. However, I feel that this company won’t be missed as most of their pizzas have been pretty bad in the last few years. I stopped eating at their locations about 4 years ago. Unfortunately, they are just the latest food court company closing up shop after declining food eaters in malls.

Overall the recent news of all 3 of these companies is more proof of an economy on the brink of collapse. Unfortunately, those who serve on stock boards are blinded by all the negative information and continue to push the stock market to record levels.

Certainly the 1% is winning while the rest of us are losing.