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Future of Duluth Sears, Kmart in question after listing on real estate website

A move by Kmart's parent company raises questions about whether the blue lights might be extinguished for good in Duluth. Kmart in West Duluth, and the Sears store at Miller Hill Mall, are listed on Sears Holdings Corp.'s property management webs...

A move by Kmart's parent company raises questions about whether the blue lights might be extinguished for good in Duluth.

Kmart in West Duluth, and the Sears store at Miller Hill Mall, are listed on Sears Holdings Corp.'s property management website aimed at other retailers, investors and developers.

That throws the future of those locations into question - though company officials cautioned that no determinations have been made for the future of those two stores.

"The website lists several opportunities for open stores including licensing, demised spaces and out-lot opportunities for which many retailers and service organizations have taken advantage," Sears Holdings Corp. spokesman Howard Riefs wrote in an email Tuesday. "An open store being listed on our SHCrealestate.com website is not an indication that there are plans to close the store itself."

But should the right buyer come along to help the financially struggling Sears, the Duluth stores might get new tenants.

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"Over the last six years, we have executed leases in stores with other retailers such as Primark, Whole Foods, Dick's Sporting Goods, Nordstrom Rack, Forever 21, West Elm, Aldi and others," Riefs wrote.

A representative of Simon Property Group Inc., which owns Miller Hill Mall, wouldn't speculate on Sears' plans for the roughly 109,000-square-foot mall anchor and its auto service center.

"We can't speak for any of our retailers in our malls," said Simon spokesman Les Morris.

As for the Kmart in the Spirit Valley Mall, there does not appear to be an impending closure, according to mall owner Oliver Companies.

"They signed another renewal," company chairman Kent Oliver said.

Sears Holdings announced in April it would be closing 78 stores - nearly all of them Kmarts - as it moved to "accelerate the closing of unprofitable stores." No locations in the Northland were marked for closure at that time, though a previous round of closures, announced in January, included Kmarts in Virginia, Superior and Ironwood, Mich.

"Sears Holdings will continue to transform as the role of the store evolves to fit the way that members want to shop," Sears CEO Edward Lampert said in a company release, making a thinly veiled reference to the growth of online commerce and its crippling effects on brick-and-mortar retailers.

As of July 30, Sears Holdings had posted a loss of $866 million so far this year, according to a Securities and Exchange Commission filing. The company's stock has steadily fallen over the past five years as well.

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The SEC filing made clear Sears is continuing its "transformation to a more asset-light integrated retailer."

"As we progress in our transformation, we are primarily focusing on profitability instead of revenues, market share and other metrics," reads the filing.

Such a pivot by the national retailer could have big local effects.

Though Simon doesn't release individual mall vacancy rates, its roughly 200 malls and premium outlets throughout the country are nearly 96 percent occupied. An open anchor store, or a new one, could jumpstart business at the Miller Hill Mall and open new opportunities.

The future of Kmart, too, could have ramifications for a part of West Duluth that doesn't have many other big-retailer options.

Sears Holdings, based in Illinois, bought the Kmart chain in 2005. Duluth's other Kmart, on Miller Trunk Highway, closed in 2012; Hobby Lobby now occupies that space.

Related Topics: WEST DULUTHDULUTH HEIGHTS
Brooks Johnson was an enterprise/investigative reporter and business columnist at the Duluth News Tribune from 2016 to 2019.
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