I posted on this earlier but didn't have time to finish the thought. One of my first thoughts was, "With hindsight, was this predictable?" Yes. Now, let me address whether this is a good idea.
I think some people are more optimistic than I. This isn't going to increase "synergy" or any other buzzwords like that. What we have here are two old-style retailers who have been marginalized by Wal-Mart. If Sears sold off its Craftsman tools and DieHard batteries, they could pretty much pack it in. These stores, like Woolworth's and Montgomery Ward, are a product of another time. The way I see it, they have one more chance to change their business model before it's (blue?) lights out.
Sears used to be the "World's Largest Store" (Ever wonder where the call letters for Chicago's radio station WLS came from? Click here.) Those days are gone, and they aren't going to be able to beat Wal-Mart at that game, not even after merging with Kmart. I'm not going to make any suggestions about what they have to do to save themselves. Such suggestions are a dime-a-dozen. But whatever they do had better be good or it's over for them.
All those Kmarts are sitting on some nice real estate that I'm sure Wal-Mart would be interested in. And I'm sure that some mega-specialty stores are salivating at all those mall anchors that Sears owns. Think about it.
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