With Toys R Us and Sears closing stores, it’s clear the retail sector is changing, which means the landscape for consumer ETFs is changing too.
Sears will close a total of 166 Sears and Kmart stores by the end of March – most of these stores will be closed by April. The company closed nearly 400 Sears and Kmart stores last year and will leave the company with fewer than 940 stores in total, down from 3,510 in 2012.
According to Business Insider, investors have applauded Sears’ efforts to close unprofitable stores. But sales have shown no signs of rebounding, down 45% since early 2013.
The company said in a statement, “Sears Holdings continues its strategic assessment of the productivity of our Kmart and Sears store base and will continue to right size our store footprint in number and size. In the process, as previously announced, we will continue to close some unprofitable stores as we transform our business model so that our physical store footprint and our digital capabilities match the needs and preferences of our members.”
Unfortunately, despite efforts to balance their physical and digital stores, sales have continued to decline. And Sears is not the only one. Toys R Us is planning to close or sell all of its Toys R Us and Babies R Us stores, over 800 in the U.S., after 70 years of business.