Toya Sarno Jordan/Business Insider
- Sears US has narrowly avoided liquidation after filing for Chapter 11 bankruptcy protection last October.
- Chairman Eddie Lampert’s proposal to buy the retailer’s assets for $5.2 billion was approved in a move that could save up to 45,000 jobs. The deal includes a plan to keep 425 Sears and Kmart stores open.
- But the US department store under Lampert’s leadership has been losing money and closing stores for years.
- Sears Mexico, on the other hand, which is independent from the US chain and owned by business magnate Carlos Slim, is growing in both its locations and its sales.
- We compared US Sears stores to Sears stores in Mexico and saw striking differences between their general appearances, product stock, staff, and upkeep.
Greeted with a floor mat reading "bienvenidos" and a pleasant "buen día" from a guard as you walk into the store, it’s instantly clear by its appearance and appeal that Sears Mexico is heading down a far different path than its American counterpart.
As Sears US struggles to keep its head above water, Sears Mexico has as much of a solid footing in the country’s retail market as any of its competitors.
In efforts to avoid liquidation, Sears’ chairman Eddie Lampert successfully proposed a bid via his hedge fund, ESL Investments, to buy $5.2 billion in assets, including 425 stores. This could potentially save up to 45,000 jobs.
The iconic retailer’s once strong presence in the US has thinned significantly in recent years, with its sales falling significantly since 2014.
This lack of financial support has visibly eroded the stores’ allure on many levels, including a shortage of staff, stock, and upkeep in many location.
Lampert blames Sears’ descent on a shift in consumer spending and e-commerce, factors that haven’t yet affected Mexican retail sales.
The key to Mexico’s success? His name is Carlos Slim Helú. The richest man in Mexico, Slim purchased Sears Holdings through his retail holding Grupo Sanborns, which presently owns 99% of Sears Mexico.
Sears has operated in Mexico since 1947, and in 1997 Slim added Sears to his list of profitable business ventures, which include financial companies, a mobile phone empire, as well as businesses in construction and real estate.
Nearly 100 stores throughout Mexico operate under Sanborns, many of which are being remodeled, and three of these are even brand new. Sears Mexico’s total sales have also been growing year over year, with 3.4% positive growth in 2017.
Although it can’t be said that Sears Mexico is dominating the country’s retail market, its growth is in sharp contrast to the rapidly deteriorating reality Sears US is facing.
We visited Sears stores both in the US and in Mexico to get a sense of how they are doing in terms of appearance, products, staff, and general upkeep — and we saw some major differences.
There are about 100 Sears stores in Mexico.
Google Maps/Sears
Source: Bloomberg
When Sears filed for bankruptcy in mid-October, it had 687 stores, though it has closed many since then. Lampert’s plan is to cut the store fleet down to 425 in the US.
Google Maps/Sears
Source: Bloomberg, Business Insider, Business Insider
We visited different Sears stores in Mexico City, the first located in the prestigious World Trade Center in south-central Mexico City, where Sears and Sanborns are the main tenants.
Toya Sarno Jordan/Business Insider
See the rest of the story at Business Insider
See Also:
- Walmart is the biggest retailer in the world, but its stores in other countries often go by different names. Here’s what they look like and what you can buy there.
- Sears, once the largest retailer in the world, has narrowly avoided liquidation. Here’s how its downfall played out.
- Eddie Lampert wins court approval to buy Sears out of bankruptcy and save 45,000 jobs
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Source: Business Insider – feedback@businessinsider.com (Toya Sarno Jordan)