The Penn Central of retail: Sears and Kmart

Some readers are old enough to remember the sad formation of the Penn Central, a 1968 merger of three nearly-bankrupt railroads. PC itself, predictably, went bankrupt not long after — leading to jokes about what happens when you merge bankrupt companies… another bankrupt company. Today's bankruptcy of Sears and the near-certain doom of their Kmart subsidiary reminds me of PC. The 2004 merger didn't help either Sears or Kmart compete with the deadly combination of Walmart and Amazon.

The north Raleigh tornado of 1988 obliterated one of the two Kmarts near my house. (A panel from its corrugated steel roof would up in a neighbor's oak tree, wrapped around it in a U shape.) What was rebuilt on the site? Not a Kmart, but a Walmart — a sign of things to come. Walmart was a much better manager of its supply chain, and they were also faster to grasp the need of opening a good Internet store to compete with Amazon.

Less than 20 years ago, Kmart had more than 2,000 stores nationwide. Today there are only 10 Kmarts in the entire state of North Carolina, and three of those will close shortly. The only Kmart in the Triangle to remain is two miles from my house — the store that wasn't obliterated in 1988. I wonder, how long will it survive? My guess is, not into 2020.