Sears’ closing a surprise to Memorial City
Struggling chain will shutter store in high-performing shopping center
Sears’ announcement that it will shutter a store in one of Houston’s top-performing malls caught retail experts and shoppers by surprise, even as the embattled retailer has shed hundreds of locations in recent years to stay afloat.
Sears’ announcement Thursday that it will shutter a store in one of Houston’s top-performing malls caught local retail experts and shoppers by surprise, even as the embattled retailer has shed hundreds of locations in recent years to stay afloat.
“Memorial City is one of their best stores in town,” said Ed Wulfe, chairman and CEO of Houston retail firm Wulfe & Co. “I would have thought they would have closed others before they closed this one.”
The Sears at Memorial City Mall became the latest casualty in the 125-year-old retailer’s ongoing efforts to streamline its operations, shore up capital and focus its energy on remaining stores. The Hoffman Estates, Ill.-based company said Thursday that it will close 46 more stores nationwide by November, including its Memorial City location in Houston and one in College Station.
It’s the third round of store closures this year alone for the American retail institution whose mail-order roots made it the forerunner to ecommerce juggernaut Amazon. In January, Sears announced 100 store closures,
followed by another 72 in May.
Over the past three years, Sears has shuttered more than 500 stores, including those in West Oaks Mall in 2018 and in Baybrook Mall, Westwood Mall and its longtime location in Midtown in 2017. The retailer years ago closed shop in Greenspoint Mall and The Woodlands Mall.
Sears operates 894 Sears and Kmart stores nationally as of May 5, according to its most recent Securities and Exchange Commission filing.
Eight Sears stores remain in the greater Houston region: Willowbrook Mall, North Shepherd, Deerbrook Mall, San Jacinto Mall, Pasadena Town Square, Mall of the Mainland in Texas City, Parkdale Mall in Beaumont and Central Mall in Port Arthur.
However, more closures may be likely as Sears has $133 million of debt coming due in October, Wall Street analysts said. The company lost more than $24 billion in market value since 2007, and its stock ended Thursday at $1.11, down from its April 2007 peak of $134.51.
“We will continue to evaluate our network of stores, which is a critical component to our integrated retail transformation, and will make further adjustments as needed,” Sears said in a statement Thursday.
The store closures come despite Sears’ Herculean efforts to survive, Wulfe said. Eddie Lampert, Sears’ CEO and primary shareholder, has provided financing to keep Sears in operation, and the company has borrowed money to the hilt.
Sears sold its Craftsman tool brand last year to Stanley Black & Decker for $900 million, and is looking to spin off its Kenmore and Diehard brands as well as its home and automotive businesses.
Despite this, Sears last year expressed “substantial doubt” in its ability to survive amid the rise of big-box competitors such as Walmart and Target, and the growing popularity of online shopping.
“Sears is struggling,” Wulfe said. “They do not appeal to millennials, and obviously, they haven’t adapted to online. They’re not on a good path.”
Sears was one of the original tenants in the Memorial City shopping center when it opened in 1966. More than 10,000 shoppers stream through the 209,000square-foot store each year to purchase clothes, appliances and tools.
Sears spokesman Howard Riefs did not answer emailed questions about future plans for the Memorial City store after its expected closure in late October.
Seritage, the real estate investment trust spun off from Sears, owns the property, which is appraised at $27.7 million, according to the Harris County Appraisal District.
Wulfe said he believes Seritage will likely sell the Sears property to MetroNational, owner and developer of Memorial City and its mall. The property could be redeveloped into more retail, restaurants, entertainment or even high-rise projects, he said.
MetroNational spokesman Mike O’Neill declined to comment.
“I think MetroNational will seize the opportunity to reinvent the space,” Wulfe said. “If the Sears organization has anything of value, it’s their real estate.”
Still, the store’s impending closure was met with a mix of surprise and sadness from shoppers, young and old, outside the store Thursday afternoon.
“This is one of the bigger malls,” Mayra Estreada, 25, said as she left with new shoes for her 7year-old daughter. “For it to be closed, it’s kind of sad. It’s been here forever.”
Lynette Crawford, 66, was with her husband to return some Land’s Ends clothing that didn’t fit. In recent years, she has shopped increasingly online. But the Houston resident grew up shopping at the Memorial City Sears, where her father bought appliances and Craftsman tools.
“That’s too bad,” Crawford said when she learned of its impending closure. “I remember as a little girl this was the place to be.”