As you can tell from yesterday’s post about Stanley Black & Decker, I spent part of the day pouring over financial reports and filings.
Sears won’t release their 4Q 2013 or full-year 2013 report until the end of this month, but they did provide early figures.
In the fourth quarter of 2013, Sears saw 9.2% fewer comparable store sales than for the same period in 2012. For 2013 as a whole, sales were down 4.2% (as of Jan 6, 2014).
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This means that less and less people are shopping at Sears, and that Sears shoppers are spending less money there.
Sears Domestic’s quarter-to-date comparable store sales decline is attributable to decreases in most categories including consumer electronics, tools and home appliances.
It looks like Sears’ total monetary losses are expected to continue. They lost considerable amounts of money in 2012, although not as as bad as in 2011, and have closed a lot of the stores that consistently operated at high losses.
It is expected that Sears’ final 4Q 2013 and 2013 numbers will reflect losses of hundreds of millions of dollars. Fourth quarter losses are expected to be less than in 2012, but 2013 total losses are expected to be higher.
We currently expect our reported net loss attributable to Holdings’ shareholders for the quarter ending February 1, 2014 will be between $250 million and $360 million…
For the full year ending February 1, 2014, the Company expects our reported net loss attributable to Holdings’ shareholders will be between $1.3 billion and $1.4 billion…
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Last year, Sears reported losses of $489 million for the fourth quarter of 2012, and $930 million for all of 2012.
Sears is still pulling in a lot of revenue, but they continue to lose money. That Sears saw a 9.2% decrease in comparable store sales for the fourth quarter, which includes the entire winter holiday shopping season, is not a good sign.
Expected losses of several hundred million dollars in the fourth quarter and over one billion dollars for the year does not bode well for Sears or Craftsman.
Craftsman is still a very popular hand and power tool brand – one of my favorites – and I sincerely hope that Sears can reverse or at least reduce their decline.
Sears is still in big trouble, and they MUST take action if the company is to survive.
Source: Sears Jan 9th, 2014 Update
Caleb
Maybe it is just my perspective, but it seems like the less they focus on tools the worse they do.
I will occasionally purchase something there like clothes, kitchen items, an appliance, or jewelry for my wife, but I can find comparable stuff like that for comparable deals anywhere. For a DIYer like myself, Craftsman is generally my first choice because they are high enough quality for my uses while still being affordable and they (mostly) have a guarantee.
I am a third generation Craftsman user. One of my grandfathers was a carpenter and the other a mechanic and they both used a lot of Craftsman tools professionally. I have some of their tools that are decades old and are still going strong. My dad is good at fixing just about anything and we both default to Craftsman.
It irritates me when I get a new Sears ad and they only have 5 high-dollar tools on “sale.”
When I go to the outlet in Denver and there are hundreds if not thousands of large appliances and tens of thousands of clothing items and only half a shelf of tools. When they do get useful tools they disappear quite quickly. This should show them where they need to focus. They put the tools at the back of the store so you have to walk past everything else in hopes that you will buy something else. They obviously somewhat realize where their draw is, so why not focus on it?
Stuart
My local Sears stores seem to carry more tools than the local Home Depot and Lowes stores, although the home improvement stores tend to have greater breadth of consumables.
There is a lot that Sears can do to improve tool sales, but they would have to sell a LOT of tools to undo $1+ BILLION in annual losses.
Richard
“When I go to the outlet in Denver and there are hundreds if not thousands of large appliances and tens of thousands of clothing items and only half a shelf of tools.”
My local Sears Outlet just outside of Vancouver, BC is exactly the same. In a huge store full of appliances and other crap that I would likely never want to buy (we bought a “Kenmore” dryer – made by Samsung I believe – there that has been nothing but crap – never again, Sears, never again.)… there’s one tiny little “pod” that has some tools and one little carousel with miscellaneous single sockets… and all of the tools are listed at a discount based on the full MSRP – which end up being MORE expensive than just waiting for a flyer sale!
Yeah, sorry Sears – your time has come and gone. Don’t forget to turn the lights out.
John
When I moved to this area a few years ago, I was excited to have a Sears Hardware Store less than 2 miles from my house so I could pick up tools without a half hour drive in any direction to the mall. Anytime I’ve been in my local Sears Hardware store, employees usually outnumber customers and the place is a mess. Combine that with the continuing offshoring of Craftsman tools and I have almost no reason to ever walk through the door which is a shame.
Reality is that online orders always take 20-30 minutes to pickup once I get to the store regardless of how many people are in the store because either they can’t find it in the system, or the paperwork isn’t in the book, or it wasn’t pulled (even though the email stating my order is ready to pickup was sent 3 hours earlier). That gives me some time to look around and get frustrated. If the employees spent as much time cleaning and organizing the store as they do standing around BS’ing, it might resemble a business that wants my business (more on this in a second).
There are two other big strikes against Sears for me at the moment:
1 – Offshoring of Craftsman tool production. If I wanted import tools, there is a Harbor Freight 1 mile away. It wasn’t that long ago that Craftsman was a well-respected tool company that people could count on for quality tools at a fair price and know Sears would stand behind for warranty claims. Now, it’s increasing imported product that isn’t as good of quality and the warranty is changing for the worse.
2 – Sears’ overall financial health which to relates to their warranty and future service. With their current downward spiral the last few years, I have less and less confidence that I will get decent warranty service if / when any of my tools break which is leading me to think about going with SK, Williams, or one of the truck brands for future hand tool purchases. I realize that quality and service come at a price and I don’t have a problem paying that price as long as I am getting what they are selling me in terms of the complete package.
The only reason that I even considered Sears for hose pinching pliers a couple of weeks ago was that I didn’t want to wait for Snap-On to ship them. Going through Sears I saved a couple of bucks and amazingly enough received a USA made tool in time to make a snowblower repair on the only 40 degree day between two snowstorms. In general though, I have made my last Craftsman purchase unless its an emergency.
3 – Employees and Customer Service. A week or two before Christmas, we were at the mall on a mission to find snowpants for our 2 year old son. You think that snowpants would be somewhat easy to find in northern Indiana in December but you would be wrong. We struck out at every store we tried except 1 – Sears. Great – the boy can go sledding without freezing to death. While we were there I decided to take a walk through electronics to take a quick look at TVs while my wife was paying. There were 8 employees huddled in a corner watching TV. Didn’t acknowledge me in any way shape or form because since they all had their back to the store and didn’t know I was there. I’m in the market for a new TV this spring but I know where I don’t have to even think about shopping.
David
Craftsman is becoming as big a joke as modern Stanley tools. Most of their wrenches, sockets and countless other tools are Chinese/Taiwanese now. Why would I want that and how good does that make their warranty? I still buy some Craftsman, but only when it is 100% American made stamped on the tool. This is definitely hurting Sears, as the continuing transfer of Craftsman to China (Ex: Craftsman Evolv line – pure garbage) is a turn off to serious tradesmen who now turn to Proto, Channellock, Klein, Armstrong, S & K and others now. Heck, I’m only a DIY homeowner and I won’t buy Chinese hand tools. There are very few Craftsman tools on my wish list now, and this is the sole reason why.
David
Thirty-something years ago, I lived within a couple miles of a Sears store. Loved to drop by and grab something at the candy counter (dating myself) and peruse the tool section while the wife looked elsewhere. There was always a knowledgeable person at the counter who could answer questions about anything in that department. My toolbox contains many, many tools bought during that time period.
That store, having moved to a mall years ago, is now in the process of closing. Most people I know stopped buying tools there years ago when the older, experienced salesperson was eventually replaced by younger folk who now merely point out on which isle a certain product can be found.
Recently I read that businesses targeting middle class Americans are struggling, (Sears, JC Penny, etc.) whereas those catering to the upper income segment are doing very well.
Ryan
When I need something smaller, and need it in a hurry, I head to Amazon (thanks to Prime shipping.).
I still love Sears when I’m looking to upgrade, or just get the hankering to buy stuff. Their prices are as good as anyone’s on REAL tools. And they always seem to have $15 off $75 on tools going on. Also, they often have 6% cashback through Ebates or MrRebates. I really hope they make it through.
Michael Quinlan
Sears made fun of itself during the holidays with an advertisement showing two girls going to the mall. As the driver parked outside Sears, the puzzled passenger asked why. “There’s always parking at Sears,” replied the driver. At many malls, Sears has become a large entrance filled with merchandise, and a smattering of people wearing name tags, who seem to have no idea that they’re supposed to interact with the those not wearing name tags, in an effort to get them to buy some of the merchandise.
I did buy a pair of Timberland work boots at Sears last fall, and not one person approached me while I was there. Sears needs to train staff better, or at least check for a pulse now and then.
KenZ
Sears has been slowly losing me for years, but they TOTALLY lost me this year. First off, I bought something from their website which turned out to be via the “sears marketplace” for a vendor who continually failed to deliver for TWO MONTHS, and when I called Sears to cancel, they said they couldn’t and I had to deal with the vendor. I had to resort to threats to get them to cancel the order (which of course they could and did).
Then, redid a kitchen this year, down to the studs. Needed appliances. After my last washer/dryer fiasco with them, I was hesitant… and in the end, went with home depot as the price for the same item was cheaper, delivery was free, warranty cost less. Called sears and they said they’d match the price, but not the free delivery or the extended warranty price. Why did I even waste my time? It’s not like Sears’ service for warranty has been anything but a pain in the butt anyway.
I get that going for the lowest price in the end drives you to low quality providers, but for the same darn appliances, I don’t want to pay $200 more. That’s lunacy.
Noah
Even if Sears goes under, I suspect the Craftsman name will not. Some company will buy it, and I can only hope that if/when that happens they don’t immediately offshore the rest of the line.
Also, I absolutely LOVE being able to buy Craftsman tools at ACE Hardwares. One I shop at carries the entire line of the Professional screwdrivers.
Toolfreak
There have been a lot of articles in prominent business magazines written over the years about Sears, and a lot of the advice that has been given, from consumers and business professionals, just goes ignored.
It would turn Sears around to once again sell USA-made tools, USA-made clothing, USA-made applicances, USA-made everything, and still offer less expensive imported items as well.
Eddie Lampert doesn’t want to turn Sears around – he is deliberately going to drive Sears into the ground then sell off the assets. The Craftsman, Kenmore, and DieHard brands are already owned by a seperate entity and ready for sale to the highest bidder once Sears goes under. Eddie will sell it all, pocket the profit, and throw the brand the company away like a piece of trash when he’s done and move on to the next victim.
It should be a crime to operate a business this way, but the laws weren’t written to deal with pedatory business practices, they just assume that CEOs will operate in the best interests of the company.
I’m guessing that Stanley/Black & Decker will buy the Craftsman brand, Whirlpool will buy Kenmore, and Deka or Exide will buy DieHard, and that will be it. The brands will still exists, but only as names tacked on to products.
Stan
There was a time when I went to Sears and I typically wouldn’t walk out empty handed most, if not all the time. Those days have been long over for a very long time.
If Sears truly wants my business, I highly suggest for them to find American manufacturers that produce American made items and make Craftsman a American made brand again. As bluntly put, I refuse to buy any Craftsman products that aren’t American made. There was a time when the Craftsman brand was mostly American made and those were better times in my opinion.
Those gimmicky worthless tools they seem to continue to stock might appeal to the crowd that cares less about country of origin or quality, but in the long run this will hurt them as professionals and people such as myself certainly won’t buy them.
But at least with my local Sears, some of their employees are absolutely useless. Now I definitely not one of those hypersensitive critical people that needs to be the center of attention, but would it kill at least one person to at least pretend to care at least a little bit. I am not expecting to be greeted, but at the very least if these employees could look up from their phones or take out their headphones that would be a great start.
Back when I first started shopping at Sears, I can assure you the people they hired actually cared or at least did a great job pretending to do so and, but also were knowledgeable about the products they sold. Most of the Sears staff at my location don’t seem to care at all.
There is a reason I won’t let them “repair” any ratchets that I buy from Sears anymore. I’ve had ratchets that were “repaired” only to stop working until I or a real professional fixed them.
There is a old saying “Either do work right or don’t do it at all”. Clearly there seems to be a middle ground and that middle ground is doing work at bare minimum level and if the results aren’t that great, oh well.
I imagine that the Craftsman name will live on well past Sears, likely purchased by Black and Decker Stanley. Probably nothing will be USA made then, but that is to be expected.
David
You nailed it, Stan, and I’m 100% behind your comments on Craftsman. It’s a crime how they’ve sent that proud brand down the Chinese crapper. I only buy them if they are USA made as well.
Edward
Sears could be a online shopping leader, if it weren’t for their high prices. Everything I have ever looked for I have found on sears website for parts, tools, etc. But I have also found it on amazon or ebay new, for 1/2 the cost of sears. Unless sears starts being competitive, they will never have my money.
Stuart
Sears’ website and 3rd party seller initiatives have created one of the clunkiest and most frustrating to use online product catalogs I have ever seen. Sears, along with many other retailers, have been trying to create Amazon-like marketplaces, but the executions has been far from perfect.
jesse
The search engine is one of the worst I have ever seen, but as noted, the website overall is terrible, especially for a retailer of their size. The iconic Sears catalog(s) disappeared years ago, and I suspect the stores will be next. Thanks so much, Eddie Lampert. A horrible example of capitalism in action.
David
Their website does indeed suck badly, as does their marketing around holidays. As a kid, when I walked in Sears at Christmastime, it was festive with Christmas music playing and the store all decked out. This past year it was stale and non-festive, with the ridiculous slogan “Holiday a Better Way” plastered everywhere.
Colin
I personally try to support Sears when I can. They’re the only place you can go and get Tools, Outdoor wear, Electronics, Shoes/boots, and appliances all under one roof.
I’m 100% with you guys on the desire to have craftsman remain USA made, but it seems that is not up to Sears. Offshoring is even occurring on the truck brands (look at COO on anything you buy from MAC or MATCO, Snap On even though to a lesser degree). The quality of the tools themselves still seems good, and pricing is excellent compared to truck brands.
The guys comparing their imports to HF must not actually physically compare the tools. HF stuff really feels like the poorest quality for 90% of it, and Craftsman imported tools are exactly the opposite, 90% feels like the same quality it always has been (albeit with a made in china label).
I’d still urge Sears to push their suppliers for USA made tools, but there is still stuff made here in their lineup. I don’t see anyone rushing out to buy their premium ratchets though, or their other USA made tools. People still gravitate towards the cheapest POS, and then complain when it says made in China.
All you guys complaining, post up a pic of your USA Craftsman Premium ratchets or the thin profiles that were USA. I can show you mine, I paid the price for them (still insanely cheaper than snap on). Can you guys show me your Craftsman Pro/Premium/Industrial stuff?
Toolfreak
I’ve got the USA thin profiles, but haven’t sprung for the “premium” 84T ratchets yet. They seem to have issues seizing up.
David
At this point, it’s S & K or Proto for me on that stuff. Why buy Craftsman when the whole line will be Chinese soon enough, thus making the warranty worthless?
Colin
I think I just scuffed my hands and knee’s jumping off the bandwagon of hating import craftsman tools…
Colin
BTW, these are likely my next C-Man purchases. USA made chisels: http://www.sears.com/craftsman-5-pc-wood-chisel-set/p-00936859000P?prdNo=1&blockNo=1&blockType=G1
And German made (Knipex) pliers: http://www.sears.com/craftsman-2-pc-adjustable-pliers-set-7-in/p-00945433000P?prdNo=20&blockNo=20&blockType=G20
/Rant
Robert
I have no trouble understanding this. From my perspective, every step that Sears takes just puts more distance between them and their customers. They seldom if ever respond to customer complaints. Well they do, usually in the form of a generic well rehearsed response. It’s completely void of sincerity you understand, or any intent to actually address and remedy the problem. In this age of internet shopping, their website is one of the worst I’ve ever encountered. Every day it continues in that direction. After much pressure and strong suggestions from outside sources, Sears hasn’t lifted a finger to improve.
Like so many corporate organizations these days, they won’t really get it until it’s too late. There is an eventual point of no return. Once over that threshhold, they won’t recover. I honestly think they take their customers for complete idiots. Well, the customers who’ve had it with them will have the eventual last word on that. Maybe not today, but their attitude will be their own demise.
Don M
Third generation Craftsman Tools user here. Used to have a Sears Hardware about 5 minutes from my house. It was great, and I was in there with my Dad at least once a week for something. Then they reorganized their store to make room to start selling appliances. Annoying, but not the end of the world, and I don’t remember their selection taking a huge hit at the time. Then they did another re-org, and there were more appliances and noticeably fewer tools and really cut back on other things we needed from a hardware store which pushed us towards Home Depot. They actually started carrying fewer tools than their store in a MALL a few miles away. How the hell does Sears in a mall, carry tools that Sears Hardware doesn’t???
They ended up closing a year or two after that, and I pretty much despise going to the mall so my Sears orders these days are generally just picking up clearance stuff that I buy online for in store pickup or other deals, absolutely nothing at full price. If I’m paying full price for a tool I can generally find the same quality (or better) at a better price online, so I find I have little incentive to go to the mall for tools.
Greg Post
I don’t like shopping at Sears at all. The stores in this area are anchor stores at the mall. So if I want to go and pickup something quickly I have to deal with the traffic congestion and the parking hassle of going to the mall, that is strike one. Secondly Sears prices are not very good or require coupons or Craftsman memberships. The stuff they sell is increasingly the same made in China tools everybody else sells, so they’re not distinguishing themselves. Sears employees don’t seem to care at all and the stores often are not well stocked, I also see this a lot at KMART which is owned by Sears.
I honestly think Sears should copy the Harbor Freight model and have separate stand alone stores not as big as Lowe’s or Home Depot just for Tools and some supplies.
Toolfreak
They do, it’s called Sears Hardware Stores, or Sears Hometown Stores.
Stuart
Sears Hometown, Hardware, and Outlet stores are no longer owned by Sears. They were spun off into a separate company in mid-2013.
Toolfreak
Yeah, they were “spun off” into a company called Newco, which is what the US Government also called GM when it bailed it out of bankruptcy.
It all operates under the umbrella of Sears Holdings, it’s just shuffling things around for legal reasons and the naming is to keep up a pretense.
Stuart
I’m not sure what you ate talking about. These stores operate under Sears Hometown & Outlet Stores Inc., with stock symbol SHOS. They are NOT a part of Sears Holdings, and not under the same umbrella as Sears stores or the Craftsman brand.
Greg Post
They don’t have any of those Sears Hometown stores in the Bay Area/Central Florida. Meanwhile there are 15 Harbor Freight stores in the same area. Stuart says Sears no longer owns these stores anyways.
George
I know we focus on tools here but Sear’s failings go beyond tools.
For the past 20 years Sears has been going downhill. Sears used to be a place where you could get a large variety of goods of high quality. When you brought a Sears store brand, be it Craftsman or Kenmore, you KNEW you were getting a quality product that would last. Hell my parents have a 25 year old Kenmore fridge thats going strong. A stove purchased at the same time was replaced 5 years ago. A dishwasher that was purchased at the same time lasted 18 years. You just don’t get that kind of longevity these days.
But it’s not just the products…it’s the stores. Most Sears stores these days seem like they are on life support. Disorganized displays, no customers, few workers, obviously deferred maintenance, etc. Same goes for Kmart. I haven’t seen a lively K-mart in years. Walmart is going gangbusters but K-mart is well, feels like an empty store from the 80s.
They just don’t care. Sears was the store that put a lot of good stuff into the hands of ordinary people during the heyday of the company. Now, it’s in Hospice care. The going Chinese with the Craftsman brand is just one of many symptoms.
Joshua Wiens
Sears just isn’t very competitive from a customer standpoint. They’re generally less expensive than the bay, but compared to most department stores they’re expensive. For example. A filter for my Kenmore fridge is $69 at sears. But reliable parts has whirlpool branded filters for $50 or $45 is you buy three. And I don’t have to wait for sears to deliver them. They either need to move up the quality vs price spectrum or down it, because they don’t compete with the targets and walmarts on price and they don’t compete with the boutique stores on service or quality.
John Parker
I hope Sears doesn’t go out of business. I love the lawn and garden section they have. I recently bought 2 refurbished lawnmowers from Sears for $99 each and they were mowers people returned. Worked fine for me. I bought an axe, a pick , a sledge hammer and another garden tool. Sears had the lowest prices on the internet for those items. They also sell very inexpensive refurbished tractors at their outlet stores. Seen tractors for $700 , regularly over $1000. It was floor models.
Bryan Smith
I have always purchased Craftsman tools. My dad always bought them and passed on the tradition. I have hundreds of his old Craftsman wrenches and power tools that he purchased in the 60’s & 70’s. They are all US Made and still going strong. It sad what the brand is turning in to. I’m on the bandwagon with the “Chinese Craftsman Tool Hater Club”. However I can’t say with confidence that the quality of the 1/2″ flex head ratchet I bought is inferior. I guess time will tell. I purchased it about a year ago being unaware of the outsourcing to China. I just happened to notice that it didn’t have the USA stamped in to the handle like my 1/2″ ratchet. I then noticed it said made in China on the plastic hanger. Sneaky Bastards!!! However they are not the only ones. Snap-On has outsourced a lot of their Blue-Point brand. I work for a large Volvo-Mack truck dealership group on the West Coast. We have Snap-On, Mac, Matco and Cornwall tool trucks in our shop weekly and everyone except Cornwall has some Chinese made stuff on them. However, the price hey want for their Chinese stuff is insane. I’m not a professional mechanic and can’t justify paying their price for the U.S. made stuff but I’m definitely not paying a premium price for a Chinese made Blue Point tool.
I still buy Craftsman tools but only when it’s US made and I need something fast. I wanted to upgrade some of my deep sockets to 12 points. I started looking at Proto & SK. I recently bought an SK 12 point 1/2″ & 3/8″ socket sets on Amazon for roughly $50.00 more per set then a Chinese made Craftsman. It was worth the extra money to me.
I have also scoured the Sears Outlet Stores and scored US 12 point combo wrench sets on clearance. I bought 3 each as back ups. If I break one of mine I won’t go to Sears get it replaced with a Chinese wrench.