K-Mart and Sears closings in KY

[rjs4470]

Very true about employee theft. Execution at store level is nightmare as well. Very low paying jobs that many are filled by poorly educated or unskilled workers.

 

Those problems start at the store management level, and those folks are generally educated. I often got the task of rescuing problem stores, and training on the operational level during my retail days, and very rarely were the employees the problem. Sure you get a couple bad eggs, but people don't sign on to do a bad job. What ends up happening is managers allow bad habits to develop, and don't have standards in place. Blaming it on unskilled, uneducated labor is rubbish. Almost anyone can do a good job if given the proper training and leadership.

[Jumper_Dad]

While shoplifting is certainly a problem, the majority of shrink is internal in nature. Employee theft, poor inventory control, employee errors, etc, usually make up most of the shrink a store experiences. If stores are getting stolen into to closing, it's usually an employee problem.

 

While that is certainly a good point and the way things were for years, I saw a major shift over the last 10-15 years personally. Internal thefts while an issue seem to cause less and less loss as Systems (reports) and CCTV have improved dramatically to the point that it's much less likely that you'll have the Internal theft case that goes on for a long period of time.

 

I have probably participated in 100+ controls audits/shrink reviews over the years, the Shrink from inventory control (missed markdowns/markups) and employee errors (receiving process) has dropped to near nothing. Example: Last store I was involved with a shrink review on was a small rural store and had a 1.00% Shrink (around $420,000 loss). A two week review of every aspect of the business (every on-hand adjustment, mark down, ect) found an amazing $2,400 in missed shrink. The company had decided that year that the video games would be safe in the clear plastic boxes and took the doors off of the cases so customers could select them without someone needing a key...store lost $70K in just video games that inventory cycle. Then put the doors back on the cases after that inventory.

 

I stood in front of store associates, district and regional training seminars and gave the "Shrink Sermon" myself. I say "Shoplifters can't shrink you out, it our controls", but as we found less and less in audits and reviews and shoplifting spiraled out of control my thinking began to change. I was able to use an internal report database that allowed us to generate custom reports from any perspective, we were able to pin point that theft and not controls was Shrinking us out.

[Jumper_Dad]

Those problems start at the store management level, and those folks are generally educated. I often got the task of rescuing problem stores, and training on the operational level during my retail days, and very rarely were the employees the problem. Sure you get a couple bad eggs, but people don't sign on to do a bad job. What ends up happening is managers allow bad habits to develop, and don't have standards in place. Blaming it on unskilled, uneducated labor is rubbish. Almost anyone can do a good job if given the proper training and leadership.

 

Agreed, 85% of the people you hire want to do a good job...the rest either don't care or are just plain un-trainable.

[rjs4470]

While that is certainly a good point and the way things were for years, I saw a major shift over the last 10-15 years personally. Internal thefts while an issue seem to cause less and less loss as Systems (reports) and CCTV have improved dramatically to the point that it's much less likely that you'll have the Internal theft case that goes on for a long period of time.

 

I have probably participated in 100+ controls audits/shrink reviews over the years, the Shrink from inventory control (missed markdowns/markups) and employee errors (receiving process) has dropped to near nothing. Example: Last store I was involved with a shrink review on was a small rural store and had a 1.00% Shrink (around $420,000 loss). A two week review of every aspect of the business (every on-hand adjustment, mark down, ect) found an amazing $2,400 in missed shrink. The company had decided that year that the video games would be safe in the clear plastic boxes and took the doors off of the cases so customers could select them without someone needing a key...store lost $70K in just video games that inventory cycle. Then put the doors back on the cases after that inventory.

 

I stood in front of store associates, district and regional training seminars and gave the "Shrink Sermon" myself. I say "Shoplifters can't shrink you out, it our controls", but as we found less and less in audits and reviews and shoplifting spiraled out of control my thinking began to change. I was able to use an internal report database that allowed us to generate custom reports from any perspective, we were able to pin point that theft and not controls was Shrinking us out.

 

I was an LP Supervisor for a few years, as well as a Regional Ops manager. I've got plenty of crazy stories to tell. I've done investigations in high shrink stores, and seen some really big employee cases. And even in stores where shoplifting was a very big problem, much of it could be traced back employee and ultimately management issues either not following through on policies and procedures, or just simply ignoring customers. I've been out of retail for almost 10 years now, so I'm sure much of what you say is true in terms of surveillance and operational controls becoming tighter and better executed. Still, in stores with high external theft, I have to believe some of that can be traced back to store level issues that create those opportunities.

[TAC]

Those problems start at the store management level, and those folks are generally educated. I often got the task of rescuing problem stores, and training on the operational level during my retail days, and very rarely were the employees the problem. Sure you get a couple bad eggs, but people don't sign on to do a bad job. What ends up happening is managers allow bad habits to develop, and don't have standards in place. Blaming it on unskilled, uneducated labor is rubbish. Almost anyone can do a good job if given the proper training and leadership.

 

Have you dealt with the dollar channel? I have and I've had the pleasure of working managers shows where they bring in the DM's and the top store managers. It is an interesting event to say the least.

The "average" store has 1.6 employees in the stores at any give time. So if a store is open 10 hours, there are 4 hours where there is only 1 employee in the store. Hard to manage shrink when there is no one in the stores to keep an aye on you.

They can earn up to $38K per year. Assistants make up to $32K. Key carriers make about $20 per year. I can't remeber waht the turn over rate was for store managers.

By comparison a Store manager at Walmart makes base of $98K with total comp of around $150K

Kmart managers makes about $73K base.

Sears managers make about $70K

[Jumper_Dad]

I was an LP Supervisor for a few years, as well as a Regional Ops manager. I've got plenty of crazy stories to tell. I've done investigations in high shrink stores, and seen some really big employee cases. And even in stores where shoplifting was a very big problem, much of it could be traced back employee and ultimately management issues either not following through on policies and procedures, or just simply ignoring customers. I've been out of retail for almost 10 years now, so I'm sure much of what you say is true in terms of surveillance and operational controls becoming tighter and better executed. Still, in stores with high external theft, I have to believe some of that can be traced back to store level issues that create those opportunities.

 

I agree, stores with high theft generally have control issues that allow it to go on. My point was that "Missed Mark Downs" the bane of all shrink, actually in 90%+ of the time didn't add up to what the stores were shrinking. Controls more than "Paperwork" shrinked most stores.

 

You ever have a case where management was "Padding" inventory?

 

I worked a case where the Store Manager and 4 Assistant Managers were terminated for padding counts the night before Inventory. Store Manager (whom I was VERY good friends with) swears to this day that he was told by the Market Manager and the Market Asset Protection to do "What ever it takes" to have a good Inventory. Inventory was minutes from being complete when we found the first "Padded" box in receiving...by the time we left at 2:30 in the morning we found well over $100K in padding that had taken place.

[rjs4470]

I agree, stores with high theft generally have control issues that allow it to go on. My point was that "Missed Mark Downs" the bane of all shrink, actually in 90%+ of the time didn't add up to what the stores were shrinking. Controls more than "Paperwork" shrinked most stores.

 

You ever have a case where management was "Padding" inventory?

 

I worked a case where the Store Manager and 4 Assistant Managers were terminated for padding counts the night before Inventory. Store Manager (whom I was VERY good friends with) swears to this day that he was told by the Market Manager and the Market Asset Protection to do "What ever it takes" to have a good Inventory. Inventory was minutes from being complete when we found the first "Padded" box in receiving...by the time we left at 2:30 in the morning we found well over $100K in padding that had taken place.

 

I had a DM that was padding inventory. He had a truckload of RTV, Defects and other that he would basically "park" at stores he knew were going to have higher shrink. He'd collect stuff over the course of the year (DM's were required to sign off on all RTV merchandise where we had destruction agreements with vendors rather than return them). He'd submit pre count inventory sheets during inventories (which he supervised) then gradually write the stuff off during the regular RTV process. He was turned in by a mngt trainee who questioned the precount sheets he handed to him to process during inventory.

[BigVMan23]

I don't they are upscale, just that a lot of people that look down their nose at Walmart love Target.

 

Which to me makes absolutely NO sense.

[Jumper_Dad]

I had a DM that was padding inventory. He had a truckload of RTV, Defects and other that he would basically "park" at stores he knew were going to have higher shrink. He'd collect stuff over the course of the year (DM's were required to sign off on all RTV merchandise where we had destruction agreements with vendors rather than return them). He'd submit pre count inventory sheets during inventories (which he supervised) then gradually write the stuff off during the regular RTV process. He was turned in by a mngt trainee who questioned the precount sheets he handed to him to process during inventory.

 

I've heard a lot of stories about the magical truckloads that would show up to be counted for inventory over the years. As a Store Manager I never had a bad inventory, but I went through one really bad one as an assistant very early in my career. I knew guys that would Pad like crazy but they either got caught and fired or got Promoted :lol2: Then magically a store that never shrank would shrink out when they left.

[Jumper_Dad]

More closings announced...

2606 Zion Road, Henderson, Ky.

230 L Roger Wells Blvd, Glasgow, Ky.

501 Marsailles Road, Versailles, Ky.

1300 Us Hwy 127 S, Frankfort, Ky.

 

That will leave 7 K-Marts in Kentucky; Erlanger, Grayson, Lexington, Owensboro, Paducah, Russell Springs and Somerset.

[LIPTON BASH]

Those companies who evolve and compete with Amazon will survive. Walmart understands this and has adapted, converting stores to warehouses and enhancing their online presence. Sears was slow to react to emergence of Walmart, now they are way too far behind to catch up to Amazon. This is their 4th restructure in just the last few years. They won't survive this one.

 

One could argue Walmarts stubborness allowed Amazon to exist. Walmart was setup to be Amazon and took a long time to adapt. Amazon caught Walmart sleeping. Now Walmart is setup to play catchup the problem is Amazon is the cool brand with the younger generation and Walmart brand name younger shoppers isn't positive when competeing with Amazon on eCommerce

[lawildcat]

More closings announced...

2606 Zion Road, Henderson, Ky.

230 L Roger Wells Blvd, Glasgow, Ky.

501 Marsailles Road, Versailles, Ky.

1300 Us Hwy 127 S, Frankfort, Ky.

 

That will leave 7 K-Marts in Kentucky; Erlanger, Grayson, Lexington, Owensboro, Paducah, Russell Springs and Somerset.

 

I don't know about the rest but that Erlanger one is nasty.

[Jumper_Dad]

One could argue Walmarts stubborness allowed Amazon to exist. Walmart was setup to be Amazon and took a long time to adapt. Amazon caught Walmart sleeping. Now Walmart is setup to play catchup the problem is Amazon is the cool brand with the younger generation and Walmart brand name younger shoppers isn't positive when competeing with Amazon on eCommerce

 

Walmart has been slow to adapt to that business more so than being stubborn, they have moved VERY slowly in e-commerce for over a decade. Walmart did locate their e-commerce division in Silicon Valley and have been working to catch up tech wise for a couple of years now. Talking to friends that are still there, e-commerce is a huge focus for them...but there is also an emphasis on not dropping the ball at the stores. Walmart's shear number of locations nation wide is really a huge advantage that they need to use to their advantage. Walmart's in house logistics are second to none, they just have to figure out how to best use their own distribution system to reach customers faster and cheaper than their competition.

 

I agree that Amazon has captured the young demographic and it is something that Walmart will have to figure out.

[woodsrider]

I don't know about the rest but that Erlanger one is nasty.

The one in Henderson isn't nasty but it always seems disorganized. Stuff just kind of everywhere.

[Voice of Reason]

I don't know about the rest but that Erlanger one is nasty.

 

Only slightly worse than almost every Walmart I have ever been in.