After buying virtually all their sheets, major appliances and Christmas gifts at the Valley Plaza Sears for at least 20 years, Don and Janelle Birdwell were in for a shock as they approached the store's entrance Monday.
The Twin Oaks couple had not heard that, several hours before, the store's owner filed for Chapter 11 bankruptcy. As part of that move to reorganize debt, the Sears near Ming Avenue and Highway 99 is expected to close within months — and so is the Kmart owned by Sears Holdings on County Line Road in Delano.
"It's one of our favorite stores," Don Birdwell lamented about the Sears, adding he appreciates being able to see and try on clothes and other goods before buying them, which is something he said e-commerce doesn't allow.
Janelle, his wife, was more concerned about losing the discounts Sears offers, saying, "It's a store for everything."
Sears as a company is not necessarily going away, at least not yet. It announced Monday it will shutter 142 unprofitable stores, on top of 46 store closings announced this summer. That will leave the company with 687 stores, including Kmarts.
Besides the undisclosed number of jobs that will be lost locally, Monday's announcement could spell trouble for Valley Plaza mall’s owner as it weighs options for replacing a 53-year anchor tenant at a time when many shoppers would as soon order goods online for home delivery as take a trip to the mall.
There was some concern Monday that Bakersfield's roughly 100,000-square-foot Sears building, already downsized with the trimming of a tire center a few years ago and access cut off to the mall's interior, might sit empty for a while.
Bakersfield commercial real estate broker Scott Underhill worried the vacancy will hurt other mall tenants that rely on big-name stores to bring in shoppers. He said that's less of a concern at the Delano Kmart, which sits mostly alone near a fast-food restaurant and gas station.
The most likely outcomes, he said, are that the Sears space gets divided up to accommodate smaller tenants, or it gets torn down and redeveloped. Perhaps less likely is that the mall's Chicago-based owner, Brookfield Properties Retail, which did not respond to a request for comment Monday, finds another large tenant to fill the vacancy.
"Market conditions will dictate,” he said.
A more upbeat assessment came from Vince Roche, who also is a Bakersfield commercial property broker. He expressed hope a new tenant will be attracted to Sears' "prime location" at the mall.
"I think it’s an opportunity to add some good, vibrant retailers that are more modern and current that will do well there, and I think bring more draw to the mall than what Sears is doing," Roche said.
Sears has closed several hundred stores in recent years as it tries to stabilize its finances amid deteriorating sales. The company, which started as a mail-order catalog in the 1880s, has been on a slow march toward extinction as it lagged far behind its peers and incurred huge losses over the years.
Observers were divided over whether a smaller Sears might be better equipped to navigate the hyper-competitive retail industry.
"That a storied retailer, once at the pinnacle of the industry, should collapse in such a shabby state of disarray is both terrible and scandalous in equal measure," Neil Saunders, managing director of GlobalData Retail, wrote in a note published Monday. "In our view, too much rot has set in at Sears to make it a viable business."
The company has struggled with outdated stores and complaints about customer service even for its once crown jewels: major appliances like washers and dryers. That's in contrast with chains like Walmart, Target, Best Buy and Macy's, which have been enjoying stronger sales as they benefit from a robust economy and efforts to make the shopping experience more inviting by investing heavily in remodeling and decluttering their stores.
Monday's bankruptcy filing listed between $1 billion and $10 billion in assets while liabilities range between $10 billion to $50 billion.
Liquidation sales at the additional stores are expected to begin within two weeks, according to a court filing.