RIP Sears

And as big boxes decline, they take towns down with them.

As Big Retailers Seek to Cut Their Tax Bills, Towns Bear the Brunt

 

Chockablock is an underused word. I'd like to thank the Times for using it there.

 

I bought two pairs of Lands End pants for around $30. They were 72% off and look fine, I think.

Where I am, malls are doing surprisingly well with regular stores. I don't know why. A high end mall that opened around 1990 (?) became a medical building with a large fitness club. Seems like a good use as medical offices are fucking everywhere nowadays.

 

Along with cheek-by-jowl.

 

We had a couple big box stores become warehouses. It's not the most attractive option, but a filled building is a filled building.

 

And places that are just like a mini-mall.

 

Roll Tide.

 

As I said, Munchausen-by-proxy.

Keep it sick under cover of caring for it.

 

I hate reporting of state tax issues. This article really says nothing other than big companies should overpay taxes and municipalities can spend money known to be subject to a tax protest rather than escrowing or reserving for it because, well, big companies should overpay taxes.

The retailers are making perfectly valid tax arguments. Property taxes are ad valorem - on value - taxes. Value is, in all states, some phrase that boils down to fair market value. It doesn't matter how much one paid for a building, if the market for similar buildings tanks, the value of all buildings goes down. It's no different than valuation of homes. This isn't a tax dodge, or a loophole or some shady dealing.

Maybe the company is using bad comps, but that's a fact issue and doesn't mean the legal theory is wrong.

 

Lampert will evidently close about 300 stores. The average Sears/Kmart does about $15,000,000 in business. A very, very rough rule of the thumb is that chain stores spend one per cent of their sales on advertising, which would be mostly retail inserts.

So if a town sees both their Kmart and or Sears the local paper will take a hit. I wonder if the loss of this revenue will push a couple papers in small cities with small regional malls over the edge.

 

That’s a great post and very worth observing if the underlying issues come true as a blowback to other industries like the local newspaper and journalism.

 

I know a guy who started an company that essentially was an internet wholesaler. I read an interview with him about the mistakes he made in his first year and he said that if you do business on-line you should use your marketing dollars on-line. He thought the money that he had spent on traditional marketing had been a waste of money and he was going 100% on-line. As more commerce goes on-line I think his experiences and how that affects the future of newspapers.

Another thing that no one talks about that is crushing the newspaper industry are merchant loyalty cards. Fifty years ago when I delivered newspapers in Denver the Post and News combined were about 100% of the houses in the neighborhood. Retailers had to advertise in the newspapers because there was no other way to reach that large an audience. But as ad revenues dropped newspapers have increased their subscriber rates and circulation rates have dropped. But now the Denver Post now has a penetration rate of about 10%.

Retailers, through their loyalty card programs have your e-mail address. So they can send you their circular electronically at zero cost. And a larger percentage of the population now have loyalty cards at the local grocery or pharmacy chain than they have subscriptions. The retailers are paying for the discounts they give their card programs with savings in newspaper advertising dollars. While smaller papers generally have a higher penetration rate than larger metros the trends are still down, down, down.

That is why I see a lot of small papers getting ready to be merged into larger papers. There is not enough revenue out there anymore to support them.