Maine eyes fate of local stores Some Kmarts, Sears likely to close

It’s now a mystery greater than what is the next Blue Light Special: Will the surprise $11 billion merger of Kmart Holding Corp. and Sears Roebuck & Co. result in the closure of any stores in Maine?

Based on the plans outlined by executives from both corporations, the likelihood is real. Several hundred Sears mall stores will be moved into free-standing Kmart stores as part of an effort to cut costs, mingle product lines and sell groceries and other goods to compete with Wal-Mart and Target.

The combination stores would be called Sears Grand, a newer undertaking by the department store that models Wal-Mart Supercenters in selling everything from hardware to baby lotion.

“These stores are doing exceptionally well,” said Kathleen Connolly, a public relations specialist hired by Sears to handle media calls on the merger.

If the Sears Grand plan is applied in Maine, four retail service communities that have both a Kmart and a Sears soon could have voids of retail space to fill as Sears leaves the malls and moves into Kmart.

“Where there’s a Sears and there’s a Kmart, then that will change,” said Melissa Daly, a public relations specialist hired by Kmart. “They haven’t made that determination yet.”

Bangor, Presque Isle, Augusta and Lewiston-Auburn each have both stores. Waterville, 20 miles away from Augusta, has a Kmart and so does Madawaska. Sears also is located in Brunswick and Portland. Sears employs 1,000 people statewide with 300 at Bangor Mall. Kmart’s employment figures were not available.

Sears also has numerous “hometown dealer” locations throughout the state for catalog sales. Their future is unknown in the announced merger.

Don Seibert, a Northeast-based retail consultant with G.A. Wright Marketing Services in Denver, Colo., said he believes that Sears will close stores that they lease and not own.

In Bangor, Sears does not own its anchor store at the Bangor Mall, but it owns a warehouse on Doane Street off Outer Hammond. Banmark of King of Prussia, Penn., is the owner of the Sears store and is affiliated with Kravco Corp. of King of Prussia, the mall’s owner. A Houston, Texas, holding company named MECOH Associates is the owner of Kmart.

“Some stores are going to be closed entirely,” Seibert said. “It depends on how close the proximity of the stores we’re talking about are to each other. Sears is trying to cut costs. Obviously the interior malls are going to have higher costs. They would close the ones where they don’t own the real estate.”

Bangor Mall Manager James Gerety said it is way too soon to be shutting the door on Sears at the mall because the merger will not be complete until March.

“We have no information from the corporate office at Sears,” Gerety said. “There’s no way I could even begin to speculate on what could happen in 2005. Right now, the stores are focusing on trying to generate as many sales as they can in the next six weeks.”

At the Bangor Mall Sears, operations manager Joe Langlois believes that the consumer will be the winner in the merger. Both stores have strong brand names, from Craftsman and Lands’ End at Sears to Joe Boxer and Martha Stewart at Kmart, and the consolidation of all lines could make other big-box stores nervous, he said.

“It’s going to do amazing things for consumers,” Langlois said. “It’s going to make us far more competitive.”

But are there enough Bangor area shoppers to warrant a Wal-Mart, Target and Sears Grand all within a half-mile of one another?

“We have to ask ourselves at what point does too much become too much,” said John Hanson, director of the Bureau of Labor Education at the University of Maine. “This merger, this grouping together, is more of a reaction of continuing to lose market share.”

He said the merged corporation would be deciding just how much it wants to invest in Bangor or any of the other retail service centers that have both a Kmart and a Sears. Do they move Sears into Kmart, close one store or close both stores?

“I won’t say it’s a probability, but it’s a possibility that they say we cannot justify keeping both of them open,” Hanson said. “And they could look into other markets where they are making more of a profit. It’s all something to think about.”