News this week that Sears and Kmart will close 235 stores along with JCPenney’s continued decent reaffirm my belief that the true value of these iconic brands is being ignored. In the case of JCPenney, unimaginative executives struggle to increase sales with awkward marketing stunts in a retail industry that is returning to its roots.
While the brands of yesterday are suffering slow agonizing deaths at the hands of traditionally educated executives, Amazon, eBay and Google are leading in online sales. What the new tech giants are capitalizing on is the digital version of what drove significant growth of two of the iconic brands. JC Penney and especially Sears were companies that had explosive growth early on as mail order catalog companies that delivered to homes across America. While the two companies continually try to attract customers back to brick-and-mortar stores they are ignoring the trend of online shopping.
While the store closings mean unfortunate layoffs it is only matter of time before the companies go out of business completely if they do not make significant changes. The brands have salvageable equity but the burdensome infrastructure of maintaining physical retail storefronts is taking its toll.