One-time U.S. retail giant Sears is closing a store in California, and the future for two other locations is in question. The moves could leave the iconic chain that was once part of downtowns and malls across the country with just five brick-and-mortar sites still open.
"Going-out-of-business" signs have gone up at the Sears store at the Whittwood Town Center in Whittier, California. In addition, a 1,000-unit multifamily development is planned for the site of a Sears at Searstown Plaza in Miami. And a Sears location at the Florida Mall in Orlando, Florida, is up for sale or lease, according to a marketing brochure.
The potential closing of that trio of locations would bring down the Sears store count from its current eight open-and-operating sites on the U.S. mainland and Puerto Rico. Hoffman Estates, Illinois-based Transformco, owner and operator of the Sears stores, didn't respond to several emails from CoStar News seeking comment.
The U.S. retail industry has been battered since the pandemic, with store closings expected to hit a record this year, according to Coresight Research. Upscale department store chain Nordstrom will be shuttering two locations in August, for example. But Sears' unseating as a retail powerhouse has been a long saga, one that stands out in real estate circles partly because unlike most other retailers, Sears often owned its anchor stores at malls. So even with stores closed, Transformco maintains a substantial real estate portfolio, according to its website.
"Transformco Properties still controls about a couple of hundred former Sears and Kmart stores across the U.S., half of which are non-owned leasehold interests," Rudy Milian, president and CEO of retail consultant Woodcliff Realty Advisors, said in an email to CoStar News.
Such a leasehold interest gives Transformco the temporary, but long-term, right to possess and use real property, granted by a landlord through a lease agreement, according to Milian. An example is the vacant Sears store at Mall of America in Bloomington, Minnesota, which Transformco has the right to redevelop and lease out to other users for a decades-long term, or it can sell its interest back to the landlord, he said.
Mail order roots
Sears was founded as a mail-order company in the late 1800s. At its peak, Sears and its sister company Kmart had nearly 3,500 stores. However, both chains were caught up in a surge of retail competition that included the rise of discount giants such as Walmart and Target and later e-commerce behemoth Amazon. That exacerbated the financial woes of the two chains.
Sears Holdings — the owner of Sears and Kmart — filed for Chapter 11 bankruptcy protection in 2018. The company was then sold to former CEO Eddie Lampert, who launched Transformco to handle its brick-and-mortar portfolio in 2019. Transformco has been closing Kmart and Sears stores ever since.
In addition to Whittier, Miami and Orlando, the remaining Sears stores are at: Burbank Town Center, Burbank, California; Sunvalley Mall, Concord, California; South Shore Plaza, Braintree, Massachusetts; Cielo Vista Mall, El Paso, Texas; and Plaza Las Americas, San Juan, Puerto Rico.
The Whittier Sears is slated to close this summer. The owner of the mall — Jericho, New York-based Kimco Realty — didn't respond to an email and phone call from CoStar News seeking a comment.
The marketing flyer for the Orlando Sears, which is still open, said the 158,400-square-foot property is for sale or lease. It's been on the market for nine days as of Thursday. The site is attached to a "super regional Florida mall with annual sales over $1,100" per square foot, according to the brochure.
That property, the Florida Mall, ranks in the top five of Simon Property Group's malls nationally in terms of foot traffic, the flyer said. The listing broker, Gavin Walsh of Atlantic Retail, didn't respond to an email and several phone calls from CoStar News.
The 8-acre property that's home to another Sears in Florida, in Miami on Coral Way near Coral Gables, is up for sale by the site's owner, RK Centers. The city of Miami has approved a mixed-use redevelopment for the location that includes 1,050 residential units and almost 50,000 square feet of retail space. The proposed site plan doesn't include space for the Sears store, according to multiple media reports.
The site plan was prepared by architects at Behar Font Partners, which didn't respond to an email from CoStar News. The brokers marketing the property, Robert Given and Brad Capas of CBRE, didn't respond to separate emails from CoStar.
Transformco has sold some of its former Sears store sites or teamed up with real estate firms to redevelop others. In New Brunswick, New Jersey, Transformco partnered with Russo Development to redevelop a 36-acre site of the former Sears department store, now known as The Raye by Vermella, with 720 multifamily apartments and 55,000 square feet of retail, Milian said.
Sears closed a handful of stores last year, most recently one in December in Tukwila, Washington, as well as Jersey City, New Jersey; Stockton, California; and Union Gap, Washington. Even so, the company has reopened stores on occasion: In 2023, it relaunched a roughly 130,000-square-foot Sears space in Burbank, one of the remaining open stores.