For Sears and Kmart, it just gets worse

Kmart is closing 64 stores nationally. The only one affected in Pennsylvania, New Jersey, and Delaware is in Pennsylvania’s Mifflin County.

And now, Kmart.

The troubled retailer announced this week that it was closing 64 stores nationally. Liquidations began Thursday.

While only one store will be affected in the Pennsylvania/New Jersey/Delaware region - in far-off Mifflin County, Pa. - the news is more of the same for struggling retailers amid online shopping's encroachment.

Several, including Sports Authority and Pacific Sunwear of California, have recently filed for bankruptcy, and profitable retailers are closing underperforming stores.

But in the case of Kmart - which has about 900 stores nationally and is a subsidiary of Sears Holdings Corp. - the value retailer and its sister Sears are up against much bigger challenges, say retail experts.

These problems, they say, are vastly different from those faced by retail giants like Macy's Corp. that have a lot of capital, generate high revenue, and will have a vast footprint despite closures.

"Sears and Kmart absolutely cannot be competitive," said national retail consultant Howard Davidowitz of Davidowitz & Associates in New York City. "Every quarter, every month, they are burning through a ton of cash. The only way they can survive is to keep closing stores. They are on their way to disappearing."

Phoenix-based consultant Jeff Green, who works with national retailers on long-term growth strategies, said discounters such as Target and Walmart have brand distinctions - Walmart is price-driven, whereas Target is a mix of quality and price. Kmart, he said, does not have any "defining difference" that separates it from its competitors.

In perhaps the week's most striking contrast, Target, Macy's, and others announced plans to hire tens of thousands of seasonal workers for the holiday season as Kmart faced layoffs.

But Kmart's staffers aren't the only casualties. A Credit Suisse report this year estimated that more than 37,000 retail workers nationally will lose their jobs by the end of this year as brick-and-mortar stores close.

That figure is more than double the retail-industry layoffs last year, and the most the sector has seen in the last eight years, according to analyst Michael Exstein, who wrote the Credit Suisse report.

As recently as April 20, Sears Holdings announced it was shutting 80 stores, including 68 Kmarts and 10 Sears stores. This week's cuts come on top of those.

"We are making the difficult, but necessary decision to close some additional Kmart stores and a couple of Sears stores," Chris Brathwaite, a spokesman for Sears Holdings, said Friday in an email. "On Friday, Sept. 16, we informed associates at these impacted stores of the closures. These were separate from the announcement we made earlier this year."

In August, Macy's announced it would pare 100 stores in early 2017, on top of 38 that it closed this spring.

Experts say that the internet has changed consumer buying habits, and that with the decrease in foot traffic at shopping centers, retailers don't need as many stores.

Online sales made up 7.3 percent of retail sales in 2015 but are growing, according to the Commerce Department. Digital sales are expected to double in six years.

sparmley@phillynews.com 215-854-4184 @SuzParmley

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