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Home Depot Helping To Speed Up Sears’ Death Spiral

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Sears has been closing stores and selling off real estate to stave off its oft-predicted demise, but these closures and other financial decisions may also be hastening Sears’ end by turning annoyed shoppers into Home Depot customers.

TheStreet reports (warning: auto-play video at that link) that Sears Holdings is cutting its inventory on hand, which could hurt its appliance sales, especially if competitors are fully stocked with more choices.

Home Depot saw this opportunity coming, and has been preparing to drink its venerable competitor’s milkshake by investing in the departments where the two retailers overlap: tools and home appliances.

“We clearly have invested to disproportionately take share in categories that we overlap with key competitors who have been — having their challenges,” President, Chairman, and CEO Craig Menear said during the company’s latest earnings call earlier this week.

That was probably a reference to Sears, but Chief Financial Officer Carol Tomé also pointed out during the same call that another unnamed competitor in appliances (probably hhgregg) is going out of business, which will be good for Home Depot’s sales.

It won’t just be good in the long run, after the liquidation sales are over: Tomé told analysts that shoppers from hhgregg are already making their way to Home Depot instead.

Why? It could be because the shoppers wanted to buy from a store that would still be around a few months after their purchase, or it could be the normal problem with liquidation sales: at first, the deals aren’t so great, and later the selection isn’t so great.

Even if Sears manages to keep going, the fact remains that it has been having problems with some suppliers and even suing one of them.

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