Analyst Jeff Van Sinderen Comments on Possible Sears & Kmart Closures in San Fernando Valley

Speculation rife on possible Sears, Kmart closures in San Fernando Valley

By Gregory J. Wilcox, Staff Writer, Daily News

Sears on Victory Boulevard in North Hollywood is seen on Tuesday, Dec. 27, 2011. Sears plans to close 100-120 Sears and Kmart stores across the country. No information was given on specific locations slated for closure. (Hans Gutknecht/Daily News Staff Photographer)

Sears and Kmart stores have been a fixture in the San Fernando Valley area for decades but that footprint could shrink as the 125-year-old retailer targets underperforming outlets for closure.

After a lackluster Christmas season, Sears Holding Corp. will close up to 120 stores in a attempt to generate as much as $170 million of cash from an inventory selloff, plus an undisclosed amount from subleases or real estate sales.

There are eight Sears stores and three Kmarts in the Valley area. The company has not announced which locations will be targeted for closure.

The announcement troubled life-long customer Juliana Rose, 40, of Granada Hills, who spent about $200 Tuesday at the Sears in Northridge Fashion Center.

"That's going to be sad" if her neighborhood store ends up on the closure list, Rose said. "My mom bought all my kid clothes here when I was young. I think my best Christmas ornaments came from Sears."

Sears has stores at Valley Plaza Mall in North Hollywood, Media Center in Burbank, Northridge Fashion Center, Glendale, Westfield Topanga in Woodland Hills, Valencia Town Center and Thousand Oaks.

The Kmarts are in North Hollywood, Burbank and Valencia.

The once iconic retailer, founded in 1886 by R.W. Sears in Minneapolis as the R.W. Sears Watch Co., is fighting for its financial life in a post-mail-order-catalog Internet-dominated culture.

For example, the parent company in a statement Tuesday said that so far in the current quarter same store sales at Sears were down 6 percent from a year earlier. The drop was driven by consumer electronics and home appliances, the company said.

Those were once considered Sears financial pillars.

Jeff Van Sinderen, senior retail analyst at the investment banking firm B. Riley & Co., said that it's hard to predict which local stores will close as a result of the dismal performance.

But closing stores is probably the right move, Van Sinderen said.

"We know that they want to close the worst performing stores of the bunch." he said. "Both Sears and Kmart have struggled with merchandising for some time. Both ... have struggled for relevance," Van Sinderen said.

Location might play a role in keeping some stores open. For example, the Westfield Topanga store is in an upscale mall on the north side of Victory and Topanga Canyon boulevards. Westfield LLC will start work on the nearly $500 million Village project on the south side of Victory sometime next year.

"You would think if a mall was being developed there they would want to be near that so I would hazard a guess it would be a consideration," Van Sinderen said.

Both Sears and Kmart have an identity problem, too.

"They are a destination for Craftsman tools and Kenmore appliances and probably some basics," he said of Sears.

And Kmart is struggling with run-down stores and intense competition from Target and Walmart.

"It's going to be very hard for them to turn around that business," he said.

Bill Harrison, 55 of Granada Hills, typifies today's Sears destination shopper.

He bought a $600 Kenmore freezer and shopped for some Craftsman tools on Tuesday.

"I'm not a clothes shopper. I wouldn't think of Sears for clothes or shoes," said the motion picture special effects designer.

But he does remember when the retailer was in its prime.

"Back in the day the catalog was the Christmas wish list," he said.

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