As Sears Plans Closings, Cities Fight To Keep Stores
Sears Holdings Corp., the iconic company that sold millions of families their first appliances and christened America's tallest building, finally succumbed to shabby sales late December, announcing that it would close 100 to 120 of its of its Sears and Kmart stores. Many of the 81 store closings announced thus far are in small towns, where Sears is one of only a handful of retailers.
Now, at least four of the places affected -- Jackson, Miss., Cleveland, Tenn., New Smyrna Beach, Fla., and Harper Woods, Mich. -- are fighting the company's decision. Local governments, afraid of the economic impact of the closures, are appealing to Sears Holdings with petitions, rallies and even tax incentives, so far to no avail.
"We would like for a major store to remain in the Jackson area," pleaded Mary Garner on the online petition started by Jackson Mayor Harvey Johnson Jr. "Please do not desert us." The petition had 3,251 signatures as of Wednesday afternoon.
Without a replacement store -- unlikely to emerge in this economy -- the departure of a Sears or Kmart means fewer jobs, less tax revenue and another ugly vacancy for already struggling cities. It also means a loss of pride. Even as affluent Americans protest the spread of chains like Walmart and shoppers look online for good deals, big box stores remain important symbols of prosperity for many small towns.
Once America's largest retailer -- and still one of its most ubiquitous, with almost as many store locations as Walmart -- Sears Holdings has struggled in recent years to refresh its staid brand and aging retail stores. After seeing same-store sales decline 5.2 percent in the eight weeks before Christmas (traditionally the most profitable time of the year), the company announced the closures.
"We appreciate the community support and in fact have seen an increase in traffic to these stores since the petitions have started," Tom Aiello, a Sears spokesperson, wrote in an email. "Unfortunately these stores have lost money for several years and Sears Holdings, as a company, cannot continue to support underperforming stores."
RALLIES AND INCENTIVES
Mayors Harvey Johnson Jr. of Jackson, Miss., and Tom Rowland, of Cleveland, Tenn., say that Sears Holdings didn't contact them before making the announcement and that their cities are in the midst of economic development projects that they had hoped would eventually bring more business to struggling stores like Sears'.
"I would hate to see us lose the Sears brand," Rowland said, noting that Cleveland, with a population of 41,285, is also the place where many of the Kenmore ranges -- a brand of ovens exclusive to Sears -- are manufactured. He cited a recently completed luxury apartment complex and a soon-to-open branch of the Whirlpool plant as examples of his city's vibrancy. While Cleveland has other big stores in the area, including branches of Home Depot and Kmart, the loss of one of its oldest department stores would hurt, he said.
Jackson, meanwhile, stands to lose much more: Sears is one of only two remaining anchor stores in the largest mall in Mississippi. City officials are considering offering the company an incentive package to keep it in the Metrocenter Mall, according to Chris Mims, director of communications for the mayor's office.
Jackson, the state's capital, has seen its population drop 5.8 percent since 2000, and the Metrocenter Mall has not fared well either. Since the mall's opening in 1978, it has declined along with the surrounding neighborhood as newer, nicer shopping centers opened in the northern part of the city. In 2010, the mall owners narrowly avoided foreclosure, and today only two of four anchor spaces are filled. That number will dwindle to one if Sears leaves.
Jackson city officials, working to fight the flight of retail from the area, are planning to move 200 to 300 employees from various government offices into one former anchor space in the mall, which they hope will bring new customers to stores like Sears, Mims said.
Any incentive package would most likely be made up of tax abatements, according to Mims. Jackson will lose $129,000 in property taxes annually should the store close. While proposing incentives for private companies is a bold move in a state currently considering cutting its public health budget, Sears is enough of a fixture in Jackson that public support (and petition signatures) are mounting for the plan.
'SEARS HELPED US'
So far, Sears Holdings has yet to respond publicly to the cities' efforts. It's not clear yet whether things will change before Sears Holdings completes the liquidation process for its stores in the next few months.
For cities, giving incentives to retailers doesn't always work out as planned. In 2002, when Kmart (then a separate company) announced store closings en masse, city officials in Buffalo, N.Y., presented the company with a $400,000 incentive package, including six months' worth of free rent, to keep its local store. While the company initially accepted the offer, a few months later it decided to close the Kmart anyway. The building remains vacant to this day, with Buffalo green-lighting plans for an Aldi discount supermarket to take over the space only this past summer.
In New Smyrna Beach, Fla., the petition drive to save Kmart hit a standstill last week when organizers failed to gain the support of the city commission and mayor, even though roughly 6,000 people had signed on. While there is a brand-new Super Walmart a few miles away, unlike Kmart, that store isn't accessible by public transportation. Some worry that those who don't have cars will be out of luck once Kmart is gone. "Poor and elderly people will be especially hurt," said Ellen Weller, 70, the retired nurse who launched the petition.
Dottie, a Kmart employee who asked to remain anonymous for fear of losing her last set of paychecks, is one of those people. "I've worked here for 17 years and now I'm looking for another job," she said. "I'm 72 and I live on my own on a very tight budget. It's very scary."
Whether or not the stores will stay afloat, the news of their closing has generated one strange by-product: nostalgia. Since shoppers learned of the closures, there has been more effusive praise for the iconic glory of Sears than any other time in recent history (and certainly more than was ever generated by the company's own advertising campaigns).
"I would like to see the Sears at Metrocenter in Jackson MS remain open because of the great values on the everyday products that working class people need and want," wrote Anthony Clay on the Jackson petition. Below him, many others pledged earnestly to do all of their shopping at Sears until the store decided to remain open.
"Sears helped us, I believe we can and will help Sears," wrote Jim Watford.
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First Posted: 01/26/2012 4:26 pm Updated: 01/26/2012 5:38 pm