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It's a do-or-die Christmas for Sears and Kmart

Sears' 133rd holiday season could be its last.The company plans to emerge from bankruptcy much smalle...

Posted: Nov 21, 2018 12:56 PM
Updated: Nov 21, 2018 12:56 PM

Sears' 133rd holiday season could be its last.

The company plans to emerge from bankruptcy much smaller but profitable and competitive. But that may be wishful thinking. By next year, there's a very good chance the iconic retailer will be a ghost of Christmas past.

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"I'd say the chance of them making it to next year are no better than 50-50, and maybe not even that good," said Philip Emma, senior analyst with Debtwire, a financial research firm. "They've got a pretty tough road ahead."

The problem for Sears is getting its vendors to provide it with the inventory it needs to attract shoppers to the roughly 400 Sears and Kmart stores it plans to keep open.

Vendors had been reluctant to ship goods without being paid cash up front, worried they wouldn't be paid at all. Sears' most recent financial results suggest it would have difficulty securing the products it needs.

"Whether they can get past Christmas depends on what those store shelves look like on Friday morning," he said.

Sears' bankruptcy attorneys conceded how important this year's holiday sales will be for the company.

"The weeks that are coming up are really critical for the company's ability to reorganize," said Ray Schrock, its attorney, at a bankruptcy court hearing last week.

Sears' creditors committee, which represents some of those vendors and various mall landlords, wants the bankruptcy court to pull the plug on Sears and start the process of shutting down the company.

Federal Bankruptcy Court Judge Robert Drain said last week he'll consider the arguments once again at a hearing just before Christmas. Even if Sears makes it past that hearing, it could find itself forced out of business early next year.

That's what happened with Toys "R" a year ago: It had a much-worse-than-expected holiday season, and it decided in March to go out of business.

Sears' chances to avoid Toys "R" Us fate aren't looking great. A year ago, Sears reported holiday quarter sales plunged 16% at the stores it was keeping open. Customers avoided Sears and Kmart: Rival department store chains such as Macy's (M) and Kohl's (KSS) and even troubled JCPenney (JCP) all reported improved holiday season sales last year.

Sears' turnaround plan projects only a narrow increase in sales at stores open at least a year, Shrock told the bankruptcy hearing. That's a key measure of retail success known as same-store sales.

"We're not shooting for the moon," he said.

But even that modest goal may be out of reach, especially if vendors are reluctant to ship it the products shoppers want.

"The best they can probably hope for is less of a drop than in the past," said Emma. "It would be the second Christmas miracle for Sears to have positive same-store sales."

Minnesota Coronavirus Cases

Data is updated nightly.

Cases: 450762

Reported Deaths: 6079
CountyCasesDeaths
Hennepin935111486
Ramsey40220742
Dakota33243348
Anoka31118366
Washington20282231
Stearns17957188
St. Louis13777244
Scott1203597
Wright11688106
Olmsted1062075
Sherburne823966
Carver698338
Clay654681
Rice613969
Kandiyohi555772
Blue Earth544833
Crow Wing486877
Otter Tail459367
Chisago455036
Benton421587
Winona391948
Douglas376666
Nobles372446
Mower369429
Goodhue351259
Polk330059
McLeod326546
Beltrami313248
Morrison312945
Lyon303338
Becker286939
Itasca285943
Isanti283241
Carlton282243
Steele275810
Pine267814
Freeborn249523
Todd232530
Nicollet226437
Brown215834
Mille Lacs214745
Le Sueur211716
Cass208424
Meeker200633
Waseca190716
Wabasha17293
Martin171326
Roseau166117
Hubbard149938
Redwood140627
Houston139014
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Chippewa131732
Cottonwood127818
Fillmore12535
Wadena120417
Rock110612
Sibley10897
Aitkin108533
Faribault107416
Watonwan10678
Pennington100315
Kanabec98018
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Murray8995
Jackson86310
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Stevens7038
Clearwater68614
Lac qui Parle65716
Lake65615
Wilkin6299
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Lincoln4892
Big Stone4663
Unassigned43968
Grant4298
Norman4248
Mahnomen4137
Kittson37220
Red Lake3184
Traverse2553
Lake of the Woods1951
Cook1150

Iowa Coronavirus Cases

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Cases: 308737

Reported Deaths: 4391
CountyCasesDeaths
Polk46313460
Linn17916278
Scott15694167
Black Hawk13964242
Woodbury13064179
Johnson1220051
Dubuque11504157
Pottawattamie9086114
Dallas901872
Story875536
Webster470677
Cerro Gordo469972
Sioux458757
Clinton455065
Warren452039
Marshall429262
Buena Vista395230
Muscatine393078
Des Moines389243
Plymouth352269
Wapello347598
Jasper328559
Lee321132
Marion307252
Jones272949
Henry265831
Carroll257434
Bremer248048
Crawford233124
Washington221333
Boone221017
Benton210950
Mahaska196337
Jackson193931
Tama189559
Dickinson188129
Kossuth177744
Delaware174736
Clay170721
Wright166024
Fayette164123
Buchanan161023
Hamilton161030
Winneshiek159120
Harrison157362
Hardin156130
Cedar154419
Clayton153049
Butler149824
Page145415
Floyd140536
Cherokee139527
Mills138016
Lyon137033
Poweshiek134124
Hancock130824
Allamakee130029
Iowa126722
Calhoun12309
Grundy121927
Jefferson121625
Madison12169
Winnebago120829
Mitchell116436
Louisa115530
Cass114743
Chickasaw113312
Appanoose111540
Emmet111232
Sac111215
Union110223
Humboldt105819
Shelby104027
Guthrie103624
Franklin103118
Unassigned10000
Palo Alto91411
Montgomery87224
Keokuk85826
Howard84819
Monroe81419
Clarke8017
Pocahontas77811
Ida75430
Davis69721
Greene6977
Adair69320
Lucas6619
Monona65017
Osceola64510
Worth6154
Taylor5969
Fremont5206
Van Buren49914
Decatur4944
Ringgold44611
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Wayne41721
Adams2983
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