But according to UBS analysts in a Feb. 12 note, Sears' loss could be other retailers' gain.
Sears' sales have "dropped precipitously" in recent years, UBS noted, but the retailer is still expected to generate more than $11 billion in hardline and softline sales in fiscal 2017. While that's down tremendously from the $33 billion in sales Sears generated in 2009, it's still impactful on the sector as a whole.
"Further, with interest rates set to rise and corporate tax reform not benefitting SHLD (as it's not profitable), we think its woes will only accelerate going forward," UBS said.
So once Sears shuts its doors, who would gain an edge over the rest of retail?
According to UBS, the big winners would be Home Depot Inc. (HD) , Lowe's Cos. (LOW) and Best Buy Co. (BBY) . The three could capture more than 75% of Sears' estimated $3.5 billion in major appliance sales this year due to the strength of their own appliance offerings and their stores' close proximity to Sears locations. For example, UBS found that 94% of Sears stores face competition from a Home Depot within a 15-minute drive.
Home Depot, Lowe's and Best Buy will also capture what UBS called the "lion's share" of Sears' $950 million in home improvement and $850 million in electronics sales.
Should all Sears locations close, Best Buy could experience a 250-basis point increase in same-store sales, UBS estimated. Lowe's would gain 150 to 200 basis points and Home Depot 100 to 150 basis points in comp sales.
As for top-line lifts, Home Depot could gain $1.44 billion, Lowe's $1.14 billion and Best Buy $1.03 billion in incremental sales.
At a 15% contribution margin, this move could add 10% to Best Buy's earnings per share, 4% to Lowe's EPS and 2% to Home Depot's EPS over and beyond current levels. Some appliance sales could leak to Amazon.com Inc. (AMZN) , as it carries Kenmore products, but UBS predicted physical stores will "remain the dominant channel for this category."
One more winner in a post-Sears world would be Dick's Sporting Goods Inc. (DKS) , as UBS estimated about $400 million in sporting goods revenue is generated by Sears. Dick's could capture 25% of those sales, lifting same-store sales figures about 150 basis points and earnings by about 6%.
Additionally, UBS said Pier 1 Imports Inc. (PIR) and Williams-Sonoma Inc. (WSM) could experience 150 to 200 basis points and 50 to 100 basis points of comp benefits, respectively, in taking over market share in furniture sales now occupied by Sears.
Rough time for Sears.