I'm not shocked by the news, but it is kind of sad. I feel bad for the folks who will lose their jobs as a result of the closings. I don't know the reasons for Sears' and K-Mart's problems in the marketplace, but I can speculate. Even though they've updated periodically, Sears is certainly a 20th century store. Their all-things-to-all-people store model was great years ago, but their lack of being the best in any particular area hurts the whole situation, nowadays. There's much more (separate) competition for each department now, too (Big Box stores with more electronics, big home improvement stores, clothing stores with more appealing labels, etc.). They also have lots of salespeople, which is convenient for customers, but is expensive for Sears.
As for K-Mart, I believe (at least with many stores in the northeast) they were asleep at the wheel during the (approx.) mid-to-late 1990s into the 2000s. Many stores were not as well-kept as competitors' stores. Some were in not-so-great neighborhoods. They also weren't offering the great selection stores like Target were. I must say, however, there are several stores in NJ today that are very nice, and I would miss having a K-Mart or Sears nearby. I also question K-Mart's long hours, even on holidays. Again, this is just speculation on my part, but does it really pay to stay open until 10: PM every night? It must cost them a fortune to keep the stores open all those hours. I'm not sure they have enough late-night and holiday business for it to make much sense, but I could be wrong.
I think they replaced them across the board.
By "them," you were referring to the Little Caesar's, right? They didn't replace them across the board. The OP still works at one, and there's one in my local K-Mart.
Even though we've disagreed a lot, I've agreed with most of what you said, imhomerjay. Your responses to Gameshowboy92's posts were spot-on, and I, too, miss Clover.