Kmart to buy Sears

[DenverChief]

Color me suprised I thought Kmart was on its way down and out of the retail business

DES MOINES, Iowa - Wal-Mart Stores Inc. is widely referred to among its suppliers as the 800-pound gorilla. What the giant retailer wants, it usually gets.

Now, many manufacturers must be wondering whether Kmart Holding Corp.'s pending acquisition of Sears, Roebuck & Co. will create a second behemoth that demands lower prices for their goods or, worse, drops them altogether.

In announcing their marriage intentions Wednesday, the two retailers said they expect to save $300 million a year through "improved merchandising and non-merchandising, purchasing scale as well as improved supply chain, administrative and other operational efficiencies."

For suppliers, the key words are "purchasing scale" and "improved supply chain." Those goals might translate into such buying power that to retain Sears/Kmart's business, manufacturers may be forced to go overseas to make products at a profit.

"When they say they need a $49 price point for an electric drill, people have to come up with ways to do it," said Bill Drumm, president of Establish/Herbert W. Davis, a supply-chain consultant in Fort Lee, N.J. Significant U.S. manufacturing went offshore in order to meet the prices that Wal-Mart dictated, he said.

Moreover, whereas several companies may be making drills for Sears and Kmart now, in the future the combined company may seek a single source.

"Say today Sears has three suppliers of (something) and Kmart has three. Combining them you don't get six," Drumm said. "If I was No. 4 or 5, I would be concerned. If I was one of the top three I'd be thrilled."

Indeed, Sears' biggest supplier of major appliances, Whirlpool Corp., believes the merger "will be a plus for us, absolutely," said spokesman Steve Duthie.

He expects Sears will convert more Kmarts into Sears outlets, which means more locations where customers can buy Kenmore washers, driers and other appliances that Whirlpool makes under Sears' house brand.

Asked whether Whirlpool expects the combined retailer to exact cheaper prices from it, Duthie replied, "We don't foresee that at all." He noted that Whirlpool has announced plans to increase its prices to retailers between 5 percent and 10 percent next year to reflect higher costs of steel and other raw materials.

Sears now buys from more than 10,000 suppliers. The number of Kmart suppliers — and their overlap with Sears — couldn't be determined.

http://news.yahoo.com/news?tmpl=stor...rs_suppliers_1

[Deberg_1990]

Originally Posted by Demonpenz

the target in springfield is the most ghetto thing i have ever seen

really?? wow...All of the ones I have ever been in are nice and clean and they never clog the aisles with pallets of junk. Wal-Mart is notorious for that. I cant stand it.

[milkman]

Originally Posted by KCWolfman

Snazi - I did the same at the same price. Unfortunately, I only bought 200 shares as I had never tried that kind of risk before.

I hope for the same results with IBC (now IBCIQ - Wonderbread). They declared bankruptcy only a few weeks ago and I bought ten times as many shares at just around 2 each. It is already at 4.25 and if it caps even 40 I stand to make a buttload.

I work for this outfit(IBC), and unless there are some changes in strategy, I just wouldn't have much faith in their ability to rebound like K-Mart did.

[Mosbonian]

Y'all need to take a class in Accounting...

First off, it is the Kmart holding company that has all the cash...$6 billion dollars worth. Problem is, that they have done nothing to improve the stores that need improvement and that is quite a number of them. And that cash trove that they have been hording, while getting everyone excited, just showed all the retail experts that they were right.....Kmart may have some nice real estate holdings, but as a retail entity they have no clue.

Sames store sales for Kmart have steadily declined in double digits...what is worse is that they are double digit declines from the previous year which were also double digit declines.

Now, Kmart and Sears have decided to merge....whoop de frigging doo!! As has been intimated, Sears has been in a decline itself.....so what you have here are two retail entities that have been losing market share and still have no clue as to how to fix the declines. Sear's has decided that they are going to do the Sear's Great Indoor store, which will probable have the same success as the other model, Sear's Great Outdoors.

And just in case anyone thinks that that $6 billion treasure trove is a cushion, think about how much it will cost to retool all of the stores if they decide to make a go of it. While this merger is just a swap of stock and no cash is involved in the transaction, do you really think that money is just going to sit there? Eddie Lampert didn't make money by letting it grow interest......

The short term on this may be a great investment, but I am not a long haul guy....until these two retail "giants" figure out how to compete with Wal-mart, Target, or Home Depot, they will just slowly eat up cash, or could even diminish in value.

mmaddog
*******

[DenverChief]

Originally Posted by mmaddog

Y'all need to take a class in Accounting...

First off, it is the Kmart holding company that has all the cash...$6 billion dollars worth. Problem is, that they have done nothing to improve the stores that need improvement and that is quite a number of them. And that cash trove that they have been hording, while getting everyone excited, just showed all the retail experts that they were right.....Kmart may have some nice real estate holdings, but as a retail entity they have no clue.

Sames store sales for Kmart have steadily declined in double digits...what is worse is that they are double digit declines from the previous year which were also double digit declines.

Now, Kmart and Sears have decided to merge....whoop de frigging doo!! As has been intimated, Sears has been in a decline itself.....so what you have here are two retail entities that have been losing market share and still have no clue as to how to fix the declines. Sear's has decided that they are going to do the Sear's Great Indoor store, which will probable have the same success as the other model, Sear's Great Outdoors.

And just in case anyone thinks that that $6 billion treasure trove is a cushion, think about how much it will cost to retool all of the stores if they decide to make a go of it. While this merger is just a swap of stock and no cash is involved in the transaction, do you really think that money is just going to sit there? Eddie Lampert didn't make money by letting it grow interest......

The short term on this may be a great investment, but I am not a long haul guy....until these two retail "giants" figure out how to compete with Wal-mart, Target, or Home Depot, they will just slowly eat up cash, or could even diminish in value.

mmaddog
*******

interesting

[Lzen]

Originally Posted by Deberg_1990

Agreed....Kmart staying in business is in all of our best interests. They help to keep Wal-Mart Honest......Although, I dont care much for either place. They are both "ghetto" to me. Target is what I like.

Frankly, I see no difference in Walmart, Kmart, or Target. I find it amusing that you think 2 are ghetto and 1 you like.

I like Walmart. They aren't ghetto. They are a pretty clean store. They have pretty much everything I need which means I only have to go to one store. This is a definite plus for someone like myself who hates going shopping.

One thing I do hate about it, though, is all the idiots who stand in the middle of the aisles in the friggin' way. That annoys me to no end. I'm like, "get the heck outta the way". Well, I don't actually say that out loud because I'm not a jackass. But if they have half a brain, they can see the frustration on my face.

[milkman]

Originally Posted by Lzen

Frankly, I see no difference in Walmart, Kmart, or Target. I find it amusing that you think 2 are ghetto and 1 you like.

I like Walmart. They aren't ghetto. They are a pretty clean store. They have pretty much everything I need which means I only have to go to one store. This is a definite plus for someone like myself who hates going shopping.

One thing I do hate about it, though, is all the idiots who stand in the middle of the aisles in the friggin' way. That annoys me to no end. I'm like, "get the heck outta the way". Well, I don't actually say that out loud because I'm not a jackass. But if they have half a brain, they can see the frustration on my face.

"Ghetto" depends on the location of the store.
In the Ventura/Oxnard Ca. area, K-Mart and Target are pretty bad, while the WalMart is fairly claen.

Up on the central coast, the K-Mart and Target stores are pretty nice while the WalMart is Ghetto.

As for the idiots that just stand in the way in the middle of the aisle, I think the problem is exactly that they only have half a brain.

[Mosbonian]

Just so all you know....

Everyone talks about how bad WalMart is for everyone.....do any of you have a clue that Target is just as bad in their relations with vendors as Wal-mart is?

mmaddog
*******

[milkman]

Originally Posted by mmaddog

Just so all you know....

Everyone talks about how bad WalMart is for everyone.....do any of you have a clue that Target is just as bad in their relations with vendors as Wal-mart is?

mmaddog
*******

I would say worse, based on how the paperwork is handled by our corporate office.

[Brando]

Originally Posted by mmaddog

Just so all you know....

Everyone talks about how bad WalMart is for everyone.....do any of you have a clue that Target is just as bad in their relations with vendors as Wal-mart is?

mmaddog
*******

The real problem with Wal-Mart/Target (big box retailers) is that they crush a local economy. Cities and towns exist to generate wealth. It is what makes them thrive.
Instead of local specialty shops that reinvest their profits locally the profits of Wal-Mart and others go back to their home location. In most cases in the past local governments have fallen all over themselves when approached about building one of these stores and given nice tax breaks.
Plus since they are not from Flint, Syracuse, Belton, etc.. they do not care how their store effects the local economy or how it's big box ugliness with large parking lots effect the public realm.
If you had a choice between a functioning Main Street with all that it has to offer and a big gray warehouse what would you choose?
Local shops and boutiques spawn off restaurants, cafes, arcades, book stores, dry cleaners, shoe repair shops, etc. You have to look no farther than Brookside to see a functioning model of what life used to be like.
Instead we negotiate parking lot lagoons and wait in line.
Sure there is a convenience that comes with one stop shopping but is it worth the sacrifice of some more substantial and pleasing?

[Mosbonian]

Originally Posted by milkman

I would say worse, based on how the paperwork is handled by our corporate office.

Do you work for Target?

mmaddog
*******

[Mosbonian]

Originally Posted by Brando

The real problem with Wal-Mart/Target (big box retailers) is that they crush a local economy. Cities and towns exist to generate wealth. It is what makes them thrive.
Instead of local specialty shops that reinvest their profits locally the profits of Wal-Mart and others go back to their home location. In most cases in the past local governments have fallen all over themselves when approached about building one of these stores and given nice tax breaks.
Plus since they are not from Flint, Syracuse, Belton, etc.. they do not care how their store effects the local economy or how it's big box ugliness with large parking lots effect the public realm.
If you had a choice between a functioning Main Street with all that it has to offer and a big gray warehouse what would you choose?
Local shops and boutiques spawn off restaurants, cafes, arcades, book stores, dry cleaners, shoe repair shops, etc. You have to look no farther than Brookside to see a functioning model of what life used to be like.
Instead we negotiate parking lot lagoons and wait in line.
Sure there is a convenience that comes with one stop shopping but is it worth the sacrifice of some more substantial and pleasing?

They go further than wreaking havoc on a retail basis.....if you have ever done business with the big retailers then you know that those "lowest prices in town" come at the expense of the vendors, which in many cases causes loss in jobs.

mmaddog
*******

[milkman]

Originally Posted by mmaddog

Do you work for Target?

mmaddog
*******

Insterstate Brands.
We are one of the vendors that have to deal with them.

[Mosbonian]

Originally Posted by milkman

Insterstate Brands.
We are one of the vendors that have to deal with them.

So are we.....and it is irritating what they get away with being as large as they are.

You work in the Credit or Compliance Departments?

mmaddog
*******

[PastorMikH]

Originally Posted by Brando

The real problem with Wal-Mart/Target (big box retailers) is that they crush a local economy. Cities and towns exist to generate wealth. It is what makes them thrive.
Instead of local specialty shops that reinvest their profits locally the profits of Wal-Mart and others go back to their home location. In most cases in the past local governments have fallen all over themselves when approached about building one of these stores and given nice tax breaks.
Plus since they are not from Flint, Syracuse, Belton, etc.. they do not care how their store effects the local economy or how it's big box ugliness with large parking lots effect the public realm.
If you had a choice between a functioning Main Street with all that it has to offer and a big gray warehouse what would you choose?
Local shops and boutiques spawn off restaurants, cafes, arcades, book stores, dry cleaners, shoe repair shops, etc. You have to look no farther than Brookside to see a functioning model of what life used to be like.
Instead we negotiate parking lot lagoons and wait in line.
Sure there is a convenience that comes with one stop shopping but is it worth the sacrifice of some more substantial and pleasing?

Though I agree with your arguement, sometimes NOT getting one of these stores can hurt a local economy as well. I watched in the last town we lived in, those local downtown stores and resturaunts suffer because people would drive an hour away (in three different directions) to get to one of the walmarts. While in those towns, they would frequent the shops in the neigboring towns, forgetting the shops in our own town, and eating in resturaunts of the towns with the walmarts.

Also, had a walmart came to that town and shut down every downtown business, walmart would have still hired 2x - 3x the workforce that the jobs that a dozen mom & pop stores one discount store's closing would have lost. Add in also, that with people shopping localy, they would also keep their resturaunt $ locally as well. Add in a forth to half of a cent sales tax increase, the increased amount of $ spent in that town could have provided some needed improvements.

Personally, I think Wal Mart's attitude has changed a lot over the last decade, and I am getting more and more dissapointed with them. They will run their course in time. Sears, JC Penny, and Motgomery Wards used to be the big dogs, now it's walmart's turn. However, just because they are big now doesn't mean they will stay that way forever.

[Baby Lee]

Originally Posted by Brando

The real problem with Wal-Mart/Target (big box retailers) is that they crush a local economy. Cities and towns exist to generate wealth. It is what makes them thrive.
Instead of local specialty shops that reinvest their profits locally the profits of Wal-Mart and others go back to their home location. In most cases in the past local governments have fallen all over themselves when approached about building one of these stores and given nice tax breaks.
Plus since they are not from Flint, Syracuse, Belton, etc.. they do not care how their store effects the local economy or how it's big box ugliness with large parking lots effect the public realm.
If you had a choice between a functioning Main Street with all that it has to offer and a big gray warehouse what would you choose?
Local shops and boutiques spawn off restaurants, cafes, arcades, book stores, dry cleaners, shoe repair shops, etc. You have to look no farther than Brookside to see a functioning model of what life used to be like.
Instead we negotiate parking lot lagoons and wait in line.
Sure there is a convenience that comes with one stop shopping but is it worth the sacrifice of some more substantial and pleasing?

I do find it ironic that the people who are alarmed that our fate as consumers is increasingly channelled through Bentonville, AR, are sanguine about how much of our life is channelled through Washington DC.