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

[teedubya]

this could save KMart's ass... they need to convert KMarts into Sear's and not Sears into KMart... I aint going to KMart to get pics for my kids. heh. ghetto ass KMart.

[DenverChief]

Originally Posted by Ali Chi3fs

this could save KMart's ass... they need to convert KMarts into Sear's and not Sears into KMart... I aint going to KMart to get pics for my kids. heh. ghetto ass KMart.

agreed keeping the Sears name is probably in their best interest

[KCWolfman]

Originally Posted by DenverChief

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


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

You guys don't read the financial section much, do you?

K-Mart has been in the black for quite some time. Their stocked is now more than 12 times worth what it was a mere 18 months ago. It has been on the rise for more than a year.

And Sears was in the same dire financial straits only months earlier.

Neither K-Mart nor Sears will change their lines. Just K-Mart will now garner Sears profits.

[DenverChief]

Originally Posted by KCWolfman

You guys don't read the financial section much, do you?

K-Mart has been in the black for quite some time. Their stocked is now more than 12 times worth what it was a mere 18 months ago. It has been on the rise for more than a year.

And Sears was in the same dire financial straits only months earlier.

Neither K-Mart nor Sears will change their lines. Just K-Mart will now garner Sears profits.

nope sure don't just remember the Stewart scandal, the closing of many Kmarts due to not being able to compete with Walmart, when you walk into a Kmart you see one lane open all day it makes you wonder too, I figured it was all doom and gloom for Kmart...

[Brock]

Originally Posted by DenverChief

nope sure don't just remember the Stewart scandal, the closing of many Kmarts due to not being able to compete with Walmart, when you walk into a Kmart you see one lane open all day it makes you wonder too, I figured it was all doom and gloom for Kmart...

Yeah - real gloomy.

[KCWolfman]

Originally Posted by DenverChief

nope sure don't just remember the Stewart scandal, the closing of many Kmarts due to not being able to compete with Walmart, when you walk into a Kmart you see one lane open all day it makes you wonder too, I figured it was all doom and gloom for Kmart...

That's what happens when you read People Magazine and use one store as your judgement for a chain of thousands.

[DenverChief]

so yeah the article says that Kmarts will be converted into sears outlets...I wonder if that means you can do your grocery shopping and power tool shopping all in one?

[DenverChief]

Originally Posted by KCWolfman

That's what happens when you read People Magazine and use one store as your judgement for a chain of thousands.

is that how it works?

[KCWolfman]

Originally Posted by Brock Landers

Yeah - real gloomy.

I bought in at 15 per share. I guess I am glad I didn't use Martha Stewart as my gauge for viability.

[Soupnazi]

I bought Kmart stock when it was $19, mostly on a real estate play. The amount of land they owned was worth more than the stock was being valued at that point. Needless to say, I've been pretty happy w/ the results.

[KCWolfman]

Originally Posted by DenverChief

so yeah the article says that Kmarts will be converted into sears outlets...I wonder if that means you can do your grocery shopping and power tool shopping all in one?

KMart doesn't sell a line of groceries - only a few items.

WalMart and Target already offer such services together.

[Brock]

I missed the boat big time. Didn't notice till it was at 45.

[KCWolfman]

Originally Posted by Soupnazi

I bought Kmart stock when it was $19, mostly on a real estate play. The amount of land they owned was worth more than the stock was being valued at that point. Needless to say, I've been pretty happy w/ the results.

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.

[KCWolfman]

Originally Posted by Brock Landers

I missed the boat big time. Didn't notice till it was at 45.

That is still more than double today.