Wednesday, December 02, 2009

Sears the REIT

Sears Holdings:
KMart 1,321 discount stores, averaging 92,000 square feet
KMart 47 Super Centers, averaging 166,000 square feet
Sears 929 broadline stores averaging 133,000 square feet
Sears Essentials/Grand 73 stores averaging 115,000 square feet
Specialty stores 1,233 averaging 8,700 square feet

Grand total: 272 million square feet of retail space. Monuments fall.

This on the recent news of so many REITs exploding on stock values. Suckers.


Doug said...

Meanwhile, can we have a moment of silence for SRS?

Entertained said...

Four or Five years ago there was talk of an
investment deal where Target and a
REIT were planning a hostile takeover of
Sears. I suppose they're glad
that little plan never materialized.

Lost Cause said...

Soto Street Sears? I thought Sears was a hedge fund now. Their stores sure do suck. I almost got robbed for tires there recently, $125 each for 14 inch chinese tires...I just drove away and went somewhere else.

Lou Minatti said...

Cramer said Sears would be the next Berkshire Hathaway a few years ago. I still have the recordings from his old radio show. Don't know why.

Peripheral Visionary said...

Sears' "business model" was actually viable back in the day--less than two years ago--when retail was exploding and commercial space was at a premium. Had they been more active in unloading inventory, they could have realized a much higher value for what was left of the company.

Unfortunately, they still have too many stores. They do have core competencies--tools, appliances, and selling to Hispanics in urban areas--but too many stores for that, and Wal-mart and Target encroaching on their domain, with Target making moves into inner-city neighborhoods.

A lot depends on their capital structure, but I'm under the impression that it's not good. They own most of their properties outright, which is a huge advantage, but are also heavily leveraged, which is not. It's not looking good for them, unless Wal-mart or Target unexpectedly go off a cliff.

Peripheral Visionary said...

And by "inventory" above, I mean real estate. Ever since they were bought out, they've been in the real estate business, not the retail business.

Rob Dawg said...

Remember the lead balloon when Target proposed bundling all their CRE and spinning it off in a leaseback arrangement? Talk about dodging a bullet.