Sears’ Downfall a Stunning Debacle: Johnson

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Feb. 27 (Bloomberg) -- Craig Johnson, president at Customer Growth Partners recaps results from J.C. Penney and Sears on Bloomberg Television’s “Bloomberg Surveillance.”

Consumer service sectors.

To these latest report cards from sears and jcpenney change the story on their turnaround efforts?

What we have here is a real mixed bag of stories.

Jcpenney has been in intensive care and at least the doctors are showing up and they are making slow but steady progress against getting out of a deep hole.

With sears, you have a grand old name in american retailer and it is heading downhill and nobody is stepping on the brakes.

It has been a stunning debacle.

The latest numbers today were not a huge surprise.

I guess the backdrop is that we live in a bifurcated america.

The middle class is getting squeezed.

What happens as their core customers are disappearing?

The customers are still there.

They are just shopping at different places.

Jcpenney and sears are brands that are still deeply rooted in the past.

Jcpenney underwent an unfortunate transformation two years ago under prior management that alienated the core customers.

Sears and the kmart side are brands rooted firmly in the 1980's if not the 1960's and they do not reflect the way people like to shop today.

If i look at the forward estimates for sears, losses are forecast every quarter out to 2015. where should we as investors follow the people who are not going to sears?

They have lost a customer base in a number of directions.

For folks in the mall, the macy's is still doing fine.

There is little upmarket.

Most of these players are losing to some of the newer formats moving off the mall.

On a macro basis, you go back 25 years ago and department store said 80% of the retail market.

Now it is down to 2%. they're going to tj's and ross.

They are going to walmart, target.

They are lost and very heavily.

We see those reflected in the numbers.

Craig johnson joining us over the phone.

Jcpenney and sears are the most shorted department stores.

They are not making any money.

They have lost the customer.

On the cover of the new "bloomberg businessweek." the big scandal behind college athletics.

This is "bloomberg surveillance

This text has been automatically generated. It may not be 100% accurate.

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