Why Are Sears Stores Open Thanksgiving Day When Most Everyone Else Is Closed?
Where retailers were racing pell-mell to open their doors on Thanksgiving Day just a few years ago, the mood haschanged, and now they're running in the other direction to remain closed on the holiday. Unfortunately,Sears Holdings (NASDAQ: SHLD)is one retailer that can't afford not to open its stores, as it needs every chance it gets to sell goods.
You can't be out enjoying the Thanksgiving Day parade when you have to work for retailers like Sears that open their doors for sales on the holiday. Image source: Flickr via martha_chapa95.
Not feeling verythankful
The trend to open up on Thanksgiving gained special impetus in 2013, when a quirk of the calendar meant there were fewer shopping days between Black Friday, the traditional start of the Christmas shopping season, and Christmas Day itself. At a time when the economy looked like it might be heading for a double-dip recession, retailers needed to squeeze every dollar out of consumers by taking advantage of every day available to them.
While there have been retailers such as Nordstrom, Home Depot, and Costco that resisted the urge and have always kept their doors shut, others, such as Staples (NASDAQ: SPLS), that initially followed the crowd eventually decided it wasn't worth it and announced last year they would stay closed. Some, like outdoors retailer REI, went even further and have said it wouldn't even open up on Black Friday.
Thanksgiving Day hours of 10 top retailers
*Not confirmed, but based on past practice and hours assumed to be open. Sears and Kmart hours are based on conversations with individual stores. Data source: BestBlackFriday.com and DealNews.com
Every day is Christmas
Holiday creep has reduced the impact Black Friday sales have on a retailer's fourth-quarter results. Wal-Mart has pushed the envelope for years on when it begins heavily discounting goods for Christmas, often using the Halloween weekend to put many items on sale.
Yet Sears is perhaps the poster child for giving an early kick-start for holiday sales, running Christmas in July sales and promoting the layaway program at its Kmart chain just as the kids went back to school in September.
So it's not a surprise that Sears is once again bucking the trend and opening its doors on Thanksgiving Day, even as the groundswell of opposition to the practice among employees and customers grows. The fact is, Sears needs to be open.
A lump of coal in its stocking
In its second-quarter earnings report, Sears said net sales tumbled 9% from the year-ago period, largely because of the number of stores it was closing, but also because same-store sales continued their decline, falling as they have every quarter for the past 11 years. Comps were down more than 3% at Kmart and off 7% at Sears.
Image source: Getty Images.
Chairman and CEO Eddie Lampert has had to make stopgap loans to the retailer for several years running now just to keep the company afloat, and most recently it looks as if Kmart may have lost an important vendor as toymaker JAKKS Pacific (NASDAQ: JAKK) reportedly stopped shipping product to its stores.
Several sites have begun compiling lists of retailer operating hours on Thanksgiving Day. Although Sears is not alone in the matter, and there are some other troubled retailers that are opening on Turkey Day, too -- I'm looking at you, Macy's (NYSE: M), and your opening an hour earlier than last year -- Sears' condition is such that its appearance is probably the most dire.
It was once thought that if other retailers were opening, then you had to do it, too. However, as morale collapsed among employees forced to miss time with their families and sympathetic shoppers who support them rebelled, it may happen the race will soon be to lock your doors and forgo the sales. Since they only serve to pull forward and dilute the results from the rest of the season anyway, more retailers will conclude it's not really worth the enmity it produces. Sears Holdings, though, may never have that luxury.
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Rich Duprey has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Costco Wholesale. The Motley Fool has the following options: short January 2017 $28 puts on GameStop. The Motley Fool recommends Home Depot and Nordstrom. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.