Black-and-blue-light special: Kmart, Sears hit hard

— -- The stock has lost nearly half its value from its April high, customers seem unhappy with service and store selection, and the future isn't looking much brighter.

Chairman Edward Lampert, who runs the hedge fund ESL Investments, acquired Kmart in 2003, Sears Roebuck in 2005 and merged the two that year. Last week, he announced that same-store sales had fallen 3.5% for the nine-week period that ended Jan. 5. The company also said then that it was overhauling its organizational structure.

As sales have sunk, Lampert has been criticized for a lack of investment in the stores, particularly Kmart.

Unhappiness with Kmart

"Our local Kmart is unappealing — not very clean, has poor customer service, poor quality, disorganized displays of products," says Joanne Fowler of Fort Ann, N.Y. "They are the closest department store of their type, but I avoid shopping there, traveling farther to get a better experience."

Cheryl Schultz of Pewaukee, Wis., says she avoids Kmart "at all costs." She echoed several members of USA TODAY's shopper panel by lamenting both the stores' appearance and customer service.

Sears spokesman Christian Brathwaite says the company is "absolutely focused on providing our customers with an improved customer experience" at both Kmart and Sears stores.

Ken Nisch, chairman of retail strategy and design firm JGA, said in an interview that if some of the billions Sears has spent buying back stock was "spent on the consumer experience and a value strategy, the erosion could have been forestalled, if not reversed."