ADVERTISEMENT

Sears is closing its store of the future just 6 months after it opened, and it's an ominous sign for the company's recovery

Sears is shutting down a store in Oak Brook, Illinois, just six months after celebrating its grand reopening.

Sears Oak Brook
  • Sears reopened the store in October after renovating it to make it smaller, sleeker, and more modern than its traditional department stores.
  • The store's failure "underlines the fact that Sears does not have a credible plan for its long-term survival," said Neil Saunders, managing director of GlobalData Retail.
  • A Sears spokesman said the store is not profitable.
  • Visit Business Insider's homepage for more stories.
ADVERTISEMENT

Sears spent a year renovating a 56-year-old store in Oak Brook, Illinois, then trumpeted its grand reopening in October with a live band, celebrities, and a giant ribbon-cutting.

Six months later, the store is liquidating its inventory and closing permanently.

The failure of the store, which was viewed as a prototype for future Sears locations, casts considerable doubt over the company's recovery post-bankruptcy , according to Neil Saunders, managing director of GlobalData Retail.

ADVERTISEMENT

"It underlines the fact that Sears does not have a credible plan for its long-term survival," Saunders said. "Making stores a bit nicer and reducing space are sensible steps, but they do not represent a holistic solution."

Before reopening the store, Sears had spent a year renovating the space. It was downsized from 250,000 square feet to 62,000 square feet and modernized to provide a "refreshed, improved shopping experience," the company said .

It carries a small selection of premium brands and features a "Welcome Center" with a lounge for members of Sears' Shop Your Way rewards program.

ADVERTISEMENT

In an interview with the Chicago Business Journal at the time of the store's reopening, Sears Chief Brand Officer Peter Boutros called the Oak Brook location "contemporary and design driven." He said he imagined women might seek refuge in the lounge while their male counterparts shopped.

"A wife could have a coffee there while her husband is off looking at gardening equipment," he said.

But it seems that Sears' vision for the store didn't pan out.

The store is not profitable, according to Transform Holdco, which purchased Sears out of bankruptcy.

ADVERTISEMENT

"As part of Sears Holdings' bankruptcy proceedings, our go-forward company, Transform Holdco LLC, has the right not to acquire various contracts that were entered into by Sears Holdings," a Sears spokesperson said in a statement to Business Insider. "As such, Transform Holdco decided not to acquire the current lease for the unprofitable Sears store at Oakbrook Center and the store will close on April 28."

Sears employees that are eligible will receive severance and have the opportunity to apply for open positions at area Sears or Kmart stores, he said.

Large-scale renovations like those at the Oak Brook location could have helped revive Sears years ago, but the company has already alienated too many customers through years of underinvestments in its stores , Saunders said.

"There is not enough time, capital nor goodwill to make the changes needed," he said. "That leaves Sears in a very tough position that throws major doubts over the future of the firm."

ADVERTISEMENT

See Also:

SEE ALSO: Sears is reportedly slashing life insurance policies for some of its 90,000 retirees as the retailer continues to scramble

FOLLOW BUSINESS INSIDER AFRICA

Unblock notifications in browser settings.
ADVERTISEMENT

Recommended articles

Africa’s richest man Dangote stands between Europe and $17 billion in revenue

Africa’s richest man Dangote stands between Europe and $17 billion in revenue

After months of exchanging blows, Kenya and Uganda takes steps towards resolution

After months of exchanging blows, Kenya and Uganda takes steps towards resolution

Africa's first black billionaire could join $2.9 billion Vivendi bid for MultiChoice

Africa's first black billionaire could join $2.9 billion Vivendi bid for MultiChoice

10 most dangerous African countries in 2024

10 most dangerous African countries in 2024

Russia’s nuclear influence expands further north of Africa

Russia’s nuclear influence expands further north of Africa

Navigating the future: How AI transforms selling on Amazon

Navigating the future: How AI transforms selling on Amazon

Wall decor tips: Transforming your space with style and creativity

Wall decor tips: Transforming your space with style and creativity

Putin's African diplomacy: Security talks with West, Central Africa take centre stage

Putin's African diplomacy: Security talks with West, Central Africa take centre stage

Infinix users get over 35% exclusive discount on Showmax premier league & general entertainment subscription

Infinix users get over 35% exclusive discount on Showmax premier league & general entertainment subscription

ADVERTISEMENT