Onetime retail giant Sears is now filing for bankruptcy, marking the end of an era.
2018 will be remembered as a sad year for Sears’ leadership, its shareholders, and its employees. But there is one group for whom the company’s demise is a happy development: its competitors. Toward the end of this year, with the holiday shopping season fast approaching, a number of retailers are racing to pick up the customers that Sears will be losing as it closes shop.
According to CNN Business, the race is sure to be a competitive one. Sears and Kmart combined had about 700 stores left, bringing in a total of 8.7 billion in yearly revenue. About 20 percent of those stores will already be gone by the end of 2018. This means everyone from big-box retailers to department chains to discount stores will have a real chance to capitalize this winter. Experts told CNN that Amazon, Walmart, Target, Kohl’s, Home Depot, and Best Buy will be at the front of the line.
“We believe the fight for share gains will be highly competitive, shares will be likely somewhat fragmented, and prior [Sears] shoppers could also just stay home and not shop for items that were more discretionary,” a team of analysts at Cowen said in a statement.
Cowen released several interesting details on the likely beneficiaries of Sears downfall. The research organization found that 92 percent of people who shop at Sears also go to Walmart; Target was similarly very high, at 75 percent. Meanwhile, MoffettNathanson retail analyst Greg Melich estimated that Home Depot and Lowe’s will each gain ground on Sears in the hardware and home improvement sector, picking up $500 million and $330 million in additional sales, respectively. Best Buy is likely to see a $175 million boost from increased sales of TVs, iPhones, and home speakers.
This has been a turbulent year for the retail industry as a whole. Already in 2018, Toys “R” Us announced it was closing its doors, and that news set up a mad dash among competitors to scoop up its $7 billion in sales. This bankruptcy is a little different, though, given Sears’ demographic reach. Coresight Research found that the average age of a Sears shopper is right around 50, which means that retail chains that cater to middle-aged shoppers might see a much-welcomed boost.