Sears Holdings (SHLD) anchors many of its stores in shopping malls, a tried-and-true strategy that served it well for decades.

But malls have gone out of style in the U.S., and now Sears finds itself on the wrong side of that strategy. Many Sears stores have fallen into disrepair along with the aging malls they anchor, and while the company is trying to remodel some stores, that won't fix the problem.

Post continues below.
About a third of the enclosed malls in the U.S. are "dead or dying," Ellen Dunham-Jones, a Georgia design professor, told the Los Angeles Times. Many count a Sears store as one of their largest tenants.

A Times reporter visited a Sears store in Santa Monica, Calif., several times and found no customers, no toilet paper in the restrooms, not enough signs to help shoppers, and "unsmiling sales associates who rarely offered help."

That's not isolated. Sears shoppers complain loudly on this site and others about lousy customer service and aging stores. The company is taking the hint and spending some money to improve stores, but not nearly enough. In general, retailers spend $6 to $8 per square foot a year on such updates, ISI analyst Greg Melich told The Wall Street Journal. But Sears spends far less -- about $1.50 to $2 per square foot.

Sears' substantial real-estate holdings are considered among its biggest assets, but it has been selling or spinning off some properties. The company is closing as many as 120 Sears and Kmart stores. It's selling 11 stores and spinning off others.

That has helped the company raise cash. Sears posted a $189 million profit in its most recent quarter from a loss a year earlier. But analysts say those moves are just a bandage over bigger wounds at Sears.

Dying malls aren't helping. The trend these days is larger "lifestyle centers," Dunham-Jones told the Times. Such centers have restaurants, shops, movie theaters and other amenities and are easier to access for cars and public transportation. People no longer want to park in a monstrous lot and walk into a monstrous mall that drains time and energy.

As a result, many of the malls that once made Sears plenty of profit are falling by the wayside. Vacancy rates hit an alarming 11% at strip malls and 9.4% at large malls last year.

More from Top Stocks

• Is Red Lobster cooked?
• GM marketing chief resigns
• What's holding Euro stocks up?