WHO IS THE BUYER FOR ALL THE BAD SEARS STORES?

Implications: This Forbes article talks about Mr. Lampert's apparent reluctance to monetize the Sears real estate portfolio. The writer, (like most financial writers on this subject) is obviously unaware of the numerous restrictions that are imposed on each and every Sears mall store that effectively prevents them from selling or even giving them away for any use other than another department store! In effect the writer did not do his homework and is advising his readers to expect the impossible.

Analysis: Since Sears would have great difficulty selling anything other than its' very best performing stores in the strongest malls in America, it is downright silly to even suggest that the worst performing stores can be monetized.  In fact if the author had done his home work he would have realized that not only are these under-performing stores not saleable, they are actually a significant liability! The reasoning goes like this. 

Each owned Sears mall store is required to pay real estate taxes,common area maintenance charges,(C.A.M.), insurance, repairs, utilities, etc. amounting to an average per square foot charge of approximately $5.00. If the average Sears store measures 150,000 Sq. Ft., thats about $750,000 per store per year. Since the only allowable user is another department store,(no office or residential users allowed by contract with the other anchor stores and the mall owner), by closing their underperforming stores they immediately incur an annual cost of at least $750K.