5 Goliaths That’ll Be History in 5 Years

April 11, 2013 by Kyle
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I was reading an article on Yahoo! Finance the other days talking about 5 major retailers that analysts think won’t be around in 5 years. I found the conversation really interesting. All 5 stores have very different problems and the problems seem to keet piling up for them. Here is my breakdown.

JCPenney

The one time Goliath of department stores has fallen on hard times recently. Management has had a hard time focusing on what direction they want to take the company and it has led to some big time confusion to consumers, even the most loyal of JCPenney customers are left scratching their head. Things like are they going to stop offering coupons? There was a period where they did, but now they are offering JCPenney coupons once again. New product lines (many of which didn’t work) and newly remodeled stores are eating through cash at a breakneck speed.

Biggest problem? As the Target’s, Kohl’s, and Walmart’s of the world start to offer higher quality clothing at low prices, they are taking away JCPenney customers by the truckload. I must say that I do like the Stafford men’s clothing line and would be bummed if they went away. I have bought several suits from JCPenney and have been happy with the quality and customer service I received. It will be interesting to see how JCPenney is able to compete moving forward.

Staples

The biggest problem for Staples has to do with how businesses are created these days. So often new businesses are created out of home offices and garages with little overhead needed. Thus, entrepreneurs really don’t need to stock up at Staples for things like office furniture and office supplies. Staples is simply becoming a dinosaur and their brick and mortar stores will start going away and their focus will be taken online. Looks for Staples to increase their online presence and try to compete with the Amazon.com’s of the world.

Sears

The fact that Sears was on this list actually got a bit of an emotional response from me. Sears was always the place my folks would go to price out a new refrigerator, car battery, and new lawn mower. I was always drug along for the ride and grew to love the store. The diversity of products always fascinated me. Where else can you buy a bra, snow-blower, pair of Nike’s, toaster, and an exercise bike.

The biggest problem for Sears is that they simply can’t grow sales. Domestic sales have been down each year for the past 7 years. So what you have now is a store that is forced to liquidate inventory in order to raise cash and keep their head above water. Not a good long term plan.

Radio Shack

I love “The Shack” and have great memories of checking out Radio Shack stores when I was a kid. Listening to the sales force trying to convince customers to stay away from Sony and Panasonic and buy brands like Technic and Tandy. But today they carry much bigger name brands in an effort to compete with the Best Buy’s of the world. Unfortunately, the biggest problem for Radio Shack is the size of their stores. They are just not big enough to display products and show potential buyers why they might need them.

On a personal note, I would miss our local Radio Shack if it went away. It is a great place to go for power cords and connectors and it is never crowded. I guess that last part might be part of the reason they are on this list!

Barnes & Noble

The biggest problem for Barnes and Noble is that people just don’t buy conventional books anymore, and if they do, they are not looking to pay full price. The one thing that B&N has going for them is their reading device known of course as the Nook. But the Nook is getting killed by the Kindle, iPad, and other similar reading devices. They can’t seem to gain any traction with the Nook and are having a hard time getting people to come into the stores unless you happen to be a homeless person looking for a quick bum bath. Time will tell with Barnes and Noble.

Ask the Readers: Which one of these stores (if any) would you miss the most if it went belly up?

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Nick @ Male EmporiumMoney BeagleKyleDC @ Young Adult Moneysears Recent comment authors

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Chris @ Stumble Forward

Defiantly would miss Sears. I just bought all my appliances there and saved over a $1000 there versus local stores in my area.

sears
sears

Sears, many mechanics have started out with tools from sears. The Craftsman brand has been a staple in many family homes for over a century. It gives a man a sense of pride to have a tool box full of craftsman tools and to know how to use them.

DC @ Young Adult Money

As far as JCPenny goes, I think it’s too soon to tell. We’ll see what their new (old) CEO does to change strategy. For Staples, like you said it really depends how well they compete online. I did go there for Black Friday and got a free copy of quickbooks 🙂 Also, I kid you not, I drove by a Sears yesterday and said out loud “Those are still around???” Also Barnes and Noble is pretty much doomed. I’m surprised they haven’t changed more since the end of Borders. I love bookstores, but it’s really inevitable that the brick and mortar ones go away. Maybe some boutiques will exist, but it will be more for unconventional books. Loved this post and love analyzing companies.

Money Beagle

I remember when Staples, Office Max and Office Depot opened, it seemed like stuff there was dirt cheap, so the last few times I’ve gone in there I’ve been very surprised at how expensive everything is. And I mean everything. I don’t know if it’s just my perception of how the prices have changed, or if they were lower back when they opened so that they could drive the competition out of business, but I would agree with you on that. On the others, I’m not so sure. Everybody loves a good turnaround story and JCP is ripe for that. Sears has Kenmore and Craftsman, which I think could carry them. B&N has the Nook and seems to have weathered the storm as best as possible (as opposed to Borders which of course crashed and burned). And Radio Shack? They should have been out of business 20 years ago by my account, so if they’ve made it this long when they had no business doing so, what’s a few more years?

Nick @ Male Emporium
Nick @ Male Emporium

Do you think Sears will offer me their lifetime warranty on all the Craftsman tools I have purchased over the years? It will be a sad day to see Sears go but I don’t even shop there anymore. Great post on the changing times

 
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