Kmart-Sears merger could impact city economy

When Kmart and Sears joined forces last month in a massive, $55 billion merger, the two companies combined to operate nearly 3,000 locations in the United States. With the aim of challenging industry leaders Wal-Mart and Target for profits, the two retailers are now trying to figure out if that many stores will mean closings, reinventions or other changes in communities like Bloomington where both stores are prevalent.\nMelissa Daly, a spokeswoman for Kmart, said the companies, which are now collectively named the Sears Holding Corporation, will look at each individual market to determine the best course of action. Daly said certain Kmarts could become Sears ,and decisions on possible store closings were yet to be made. \n"(They) will remain independent chains, and specific properties will be looked at individually," she said. \nBloomington is one such market where both stores have prominent locations, even seemingly overlapping each other's spheres of retail territory. At College Mall, Kmart is just a hop, skip and a jump across a parking lot from a Sears store attached to the mall. \nPaul DuMars, a senior accountant who specializes in acquisitions and mergers at ACX Alliance, said situations like Bloomington's likely will result in one of the stores closing. And, with so many stores combined, situations like Bloomington's are not uncommon. In Cincinnati, Kmart operates four stores and Sears has five, including two mall locations. In St. Louis, Sears has five locations to Kmart's two. In Denver, there are four Kmarts and eight Sears stores within or just outside the city.\nDuMars said Kmart and Sears will cross brand and develop unique identities, but Sears Holding Corporation will avoid keeping the two open in almost the exact same market. \n"In that situation, if they're in the same strip mall or area, one of them will actually close," DuMars said. "It just wouldn't make sense for both stores to stay open. They will close one and combine the two retail into one. And there will definitely be a loss of jobs in that area as a result."\nLosing his job is something that's crossed Quintiney Sanders' mind more than a few times since the merger was announced. Sanders works as a clerk in the electronics department at the College Mall Kmart and said he would not be surprised if his store closed to make way for increased emphasis on Sears. \n"It's got to be Kmart. Sears is too popular," Sanders said. "I think that will happen. (It) would be devastating. Very devastating. I'd have to find another job. Finding a job is not good. Having a job is much better."\nEmployees at Sears, however, were much more optimistic about both their futures and the future of their store. \nJim Lawrence has worked as an appliance salesmen at the Sears in College Mall for nine years and has been in the appliance industry since 1963. He said that kind of record separates him and other Sears employees from the clerks hired at Kmart and also attracts customers who won't like to buy from someone less experienced -- such as those at Kmart.\nThat service and the good name it creates keeps Bloomington resident Becky Black coming back to Sears. She said she doesn't have the same regard for Kmart.\n"I go there much less than I do Sears. I just like Sears better," she said. "(The merger) was a surprise to me. I think Sears is just such a better name."\nStill, Lawrence said he wouldn't like to see Kmart close completely. Instead, he said the best solution would be for the two to develop inventories together to maximize the potential and appeal of each. That, he said, would benefit everyone and justify the merger.\n"We haven't heard yet, there's a lot of ways they can go here, but the ultimate thing would be if they move automotive and put it in the Kmart store and give us more room for warehousing and more floor for appliances," Lawrence said. "I don't think the merger can do anything but help us."\nSean McCullough, who's worked as a salesman at Sears for two months, said expanding and separating different inventory between the stores will keep both open and thriving. He said he's not worried whatsoever about his job security.\n"Instead of having the people who want to come in and buy electronics and appliances getting caught up in the traffic of the clothing industry, they could go (to Kmart) just like they would go to H.H. Gregg," he said. "They go in and know what they're going to get."\nAs far as DuMars is concerned, both stores have a lot to do in the coming months to catch their competition and make the merger financially worthwhile. \n"I don't think it's going to benefit either too much," he said. "Both are broken business models, and they need to reinvent each other together. A merger is good in some instances, but these companies need to remarket, reinvent and reposition themselves as far as sales."\n-- Contact staff writer Gavin Lesnick at glesnick@indiana.edu.