Sears Going Down Fast
- Thread starter artbuc
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Blame capitalists.
Coach James
Well-known member
How is Sears going to leave taxpayers holding the bag? The company is not borrowing money from the government.
Coach
The Fall
Well-known member
The general consensus from the financial press (Forbes, Fortune, etc.) -- conservative in outlook to be sure -- is that Lampert took a company that was in trouble, yet profitable and with the potential to make a recovery, and rather than provide the guidance needed to resuscitate it, destroyed it in a way that'd make T. Boone Pickens proud. Sears loses and Eddie gains be taking over former Sears properties with his commercial real estate company, Seritage. While that's neither here not there -- Sears' demise is a foregone conclusion -- Lampert is emblematic of the new CEO -- one not rooted in loyalty to the company coming from the ranks and knowledgeable about retail, but all about finance and benighted to everything else. He was the absolute wrong man for the job; he never shows up to work and heads continuously roll underneath him. It would've been interesting to have seen Sears run by a CEO committed to its perseverance. They might have made it; they might not have. But they'd have stood a much better chance. It was the last place in my area you could buy decent American-made tools and contrary to a lot of folks, I'd rather just drop by Sears most days than wait for that once-a-week visit from the tool truck (although the Mac guy is great too).
Coach James
Well-known member
I really don't understand some of the Sears comments.
The company wasn't run in to the ground as in the its business model was changed with bad results. Rather, its business model stayed the same and the company was left behind. Some folks seem to think Sears was doing fine until Lampert took over and that he intentionally did things to make Sears fail.
The truth is that Sears was in serious trouble long before Lampert took over. For years, Sears had no real competition, but by 1970, that was changing. In the early 1970's, specialty stores and big boxes started taking away Sears market share in every retail category. The result was earnings growth stagnated years before Lampert took over. Sears finance and Discover Card earnings masked money problems in Sears retail for a while, but couldn't do it forever.
Lampert's hiring was a last ditch attempt to stop the company's downward spiral. At the time he was hired, I read several articles where the authors thought it was already too late for anyone to turn Sears around.
People may not like how Lampert has organized Sears holdings and Seritage and they may not like the way Sears has continued to falter, (I don't like it), but it's is not borderline criminal or illegal in any fashion. Management creating a separate company to hold real estate then having one company pay rent to the other is not unusual. Small business people do it as well. I do it. I own commercial property in one company and I lease the property to a separate company I also own.
I'm not a Eddie Lampert cheer leader as I don't have strong opinions about him either way, but the notion that he alone is responsible for the demise of Sears is simply incorrect. Ultimately what killed Sears was competitors could, on a large scale, have equal mass buying power and lower overhead so they could sell the same items as Sears for a lower price. Consumers chose lower prices and lower quality customer service over Sears higher prices and, for many years, better customer service. Big boxes won and Sears lost.
Coach
The company wasn't run in to the ground as in the its business model was changed with bad results. Rather, its business model stayed the same and the company was left behind. Some folks seem to think Sears was doing fine until Lampert took over and that he intentionally did things to make Sears fail.
The truth is that Sears was in serious trouble long before Lampert took over. For years, Sears had no real competition, but by 1970, that was changing. In the early 1970's, specialty stores and big boxes started taking away Sears market share in every retail category. The result was earnings growth stagnated years before Lampert took over. Sears finance and Discover Card earnings masked money problems in Sears retail for a while, but couldn't do it forever.
Lampert's hiring was a last ditch attempt to stop the company's downward spiral. At the time he was hired, I read several articles where the authors thought it was already too late for anyone to turn Sears around.
People may not like how Lampert has organized Sears holdings and Seritage and they may not like the way Sears has continued to falter, (I don't like it), but it's is not borderline criminal or illegal in any fashion. Management creating a separate company to hold real estate then having one company pay rent to the other is not unusual. Small business people do it as well. I do it. I own commercial property in one company and I lease the property to a separate company I also own.
I'm not a Eddie Lampert cheer leader as I don't have strong opinions about him either way, but the notion that he alone is responsible for the demise of Sears is simply incorrect. Ultimately what killed Sears was competitors could, on a large scale, have equal mass buying power and lower overhead so they could sell the same items as Sears for a lower price. Consumers chose lower prices and lower quality customer service over Sears higher prices and, for many years, better customer service. Big boxes won and Sears lost.
Coach
The Fall
Well-known member
I didn't say Lampert brought Sears down. They were in trouble and needed someone with experience and some creativity. However, he had absolutely no real plans to save it and had no retail experience whatsoever. And the state of the stores and the corporation, with stocks plummeting precipitously under his leadership, bears this out. Meanwhile he gains (as shareholders lose -- although he did have to pay them out millions in a recent lawsuit in which they claimed conflict of interest). That isn't illegal. But it's not a recipe for longevity. And it's an ignominious end to a company that deserved a lot better.
Coach James
Well-known member
Fall, my previous post wasn't a response to your post. I think we were writing at the same time.
Coach
Coach
The Fall
Well-known member
Got you. Again, I do agree with you. Sears was in trouble pre-Lampert, and the financial meltdown/dead mall phenomenon would've taken someone with a lot of vision, intelligence and dedication to overcome.
nbpt100
Well-known member
And the autocratic communist Chinese. it Can't be done with out their cooperation.
Lambert and everyone knew this was a turnaround job.
You have to keep in mind that Lambert is and always was a part time CEO at best. He runs his hedge fund and other companies. If you listen to the posts on here and elsewhere from actual Sears Holding employees they felt he never listened to those who ran the stores or had a serious mindset of turning the company around for the long term. His intentions and motivations are suspect at best. Most feel his actions and motivations were more self serving. Not illegal in many cases. Immoral! I will let everyone make up their own mind on that. It seems there are a lot norms being broken these days and those breaking them always fall back on the "it is not illegal" line. Laws and regulations are far from flawless. Conflicts of interest are real and not always reflected in regulations.
He has been sued by the shareholders as he does have a fiduciary responsibility towards them. I am not sure how that has played out.
It seems businesses do better when there is some goal alignment with the those running it, the employees the customers and or community. It does not seem to exist very well here.
Mechanical Noise
Well-known member
I see no reason to think Eddie Lampert is evil. Just inept. He made a fortune at a fairly young age, maybe he got a little lucky? I'm only wondering, I'm no financial genius, that's for sure. But one thing I've seen with gamblers is they start losing hard after their heads swell so big that they think can look into the future.
Sears was stumbling down during the years when the rest of retailing was healthy and growing. In the Internet age, Sears would be doomed without a new, clear vision. Hey, who better than hotshot Eddie Lampert?
So, now Sears is nearly dead. Eddie Lampert is blog blaming the vendors and the press. I can't imagine Eddie planned this. Seems to me that Eddie got in over his head. The real estate is nice, but what's the future of retail real estate?
It's just my opinion, but I think Eddie Lampert's ego got him in over his head.
Sears was stumbling down during the years when the rest of retailing was healthy and growing. In the Internet age, Sears would be doomed without a new, clear vision. Hey, who better than hotshot Eddie Lampert?
So, now Sears is nearly dead. Eddie Lampert is blog blaming the vendors and the press. I can't imagine Eddie planned this. Seems to me that Eddie got in over his head. The real estate is nice, but what's the future of retail real estate?
It's just my opinion, but I think Eddie Lampert's ego got him in over his head.
nbpt100
Well-known member
Mechanical noise you have a good point.
His ego may have gotten in the way of stepping aside and hiring a full time CEO with retail and turn around experience.
Who knows?
Sear is so Iconic I am sure there will be a few books written about it all.
His ego may have gotten in the way of stepping aside and hiring a full time CEO with retail and turn around experience.
Who knows?
Sear is so Iconic I am sure there will be a few books written about it all.
visionguru
Well-known member
Ironically, China is more capitalist now than the U.S.
visionguru
Well-known member
Me too.
IMHO, Sears' downfall was not due to CEOs, rather it's the change of tide in the retail business. People have more options when buying things. In the last 10 years or so, many appliance chains go belly up: Circuit City, hhGreg, for the same reason. No matter what a CEO does, without drastic change in business model, you just can't survive.
M_George
Well-known member
Lampert did the only thing he knows. Manipulate money and watch it grow. he's a Wall Street operator. His background has nothing to do with running any type of retail business.
nbpt100
Well-known member
When you consider in China every large business is owned in all or in part by the state, How is there any real competition between Chinese businesses? No human rights and poor environmental policy.. There is so much corruption. I don't know exactly how to characterize them in one word.
There are retailers who are doing ok. They changed and adapted. Those dug into the old ways got hurt. The buck stops with the CEO! He/she leads successfully or not. Plus the fact that internet purchases in most all cases don't collect sales tax. How is that a level playing field? We have govt. to blame for that.
M_George
Well-known member
I agree, you have a clear point here. Our government is always on the soapbox for human rights and environmental concerns. But it all goes out the window when it comes to China.
Mechanical Noise
Well-known member
If the news reports are to believed, Eddie Lampert's hedge fund has lost value even more than Sears. Investors have lost confidence in him.
I can't believe things are going according to Eddie Lampert's plan.
Mechanical Noise
Well-known member
The Eddie Lampert in my imagination wanted to be a hero. A successful turnaround might have made him bigger than Gates, bigger than Buffet. Not only would he have saved Sears but he would have created a template for other declining retailers.
Either way, Eddie Lampert's KMart/Sears adventure would have been one for the books.
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Super Sport
Well-known member
From what I've read on Lampert, this is pretty true. He had a lot of potential as a hedge fund manager, and whether or not he comes out ahead on all of this, I think his career will never be what it could have been had he left Kmart/Sears alone.
It's hard to know what his intentions were, but I find it hard to believe that anyone would believe that a turnaround would be possible without updating and modernizing stores to help bring in customers. I also doubt that keeping these run down stores open have helped property values either. Either way, he seems pretty incompetent at whatever it was he was trying to achieve.
woody 73
Well-known member
Story just in :
http://www.msn.com/en-us/money/comp...g-sales/ar-BBBcYSf?li=BBmkt5R&ocid=spartandhp
Again let me just say I have always enjoyed sears and I try and not bash them; on the other hand I do bash Mr. Lampert for the way he is running things.
http://www.msn.com/en-us/money/comp...g-sales/ar-BBBcYSf?li=BBmkt5R&ocid=spartandhp
Again let me just say I have always enjoyed sears and I try and not bash them; on the other hand I do bash Mr. Lampert for the way he is running things.
928'er
Well-known member
If you are "into" the Craftsman C3 line of tools now is the time to either stock up or bail out depending on your point of view....
Fortunately, the Craftsman C3 line is, essentially relabeled Ryobi.
Unfortunately, the batteries do not interchange...
I don't see SBD continuing the C3 line as it directly competes with their DeWalt, Porter Cable and Black & Decker tool lines.
By the way, while the factories are in china, TTI is a Hong Kong based company founded by a German.
https://www.forbes.com/profile/horst-julius-pudwill/
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928'er
Well-known member
Thanks for the link. Not a basher either and really see nothing positive about what appears to be their impending demise. The story does maybe explain why most of one whole level in my local store was filled with a sea of mattress sets that other merchandise once occupied.
If they don't become the poster child of why new-age business strategies don't work, there is no hope for the world.
(hyperbole)
Really makes me sad. Sears was my grandpa's go-to, my dad's go-to, and until recently one of my go-to's, too.
Dammit.
(hyperbole)
Really makes me sad. Sears was my grandpa's go-to, my dad's go-to, and until recently one of my go-to's, too.
Dammit.
PelicanPines
ALLIANCE MEMBER
Bad choices... bad any greedy executives.
30 more Kmart and sears quietly added to closed list
30 more Kmart and sears quietly added to closed list
drink
Well-known member
When I shopped at a local Sears a few days ago it had a lot of tools on the shelves. The riding mower storage area was about empty. A few customers were buying things and I bought some stuff. After reading the article I began wondering if the end of Sears will be in July when the $500 million payment is due.
finn
Well-known member
I've been looking for an 11 cu ft refrigerator for the office of my shop. I found what I thought was a pretty good deal locally, but decided, on the spur of the moment, to stop at the local Sears Hometown store.
They had the same refrigerator, albeit which a Kenmore brand, and in stainless rather than white, for over $100 less than the best deal I found elsewhere.
I pick it up on Tuesday.
I'm a happy camper. They had a fairly nice tool, box, and lawn equipment selection, in addition to the appliances.
Even had a log splitter on display.
They had the same refrigerator, albeit which a Kenmore brand, and in stainless rather than white, for over $100 less than the best deal I found elsewhere.
I pick it up on Tuesday.
I'm a happy camper. They had a fairly nice tool, box, and lawn equipment selection, in addition to the appliances.
Even had a log splitter on display.
Old businesses generally die off - sooner or later, as the economy progresses.
The "new age business strategy" in use, is that greedy, business savvy people, buy diminishing companies, milk them for everything they can, then let them go out of business, walking away with a huge amount of money.
Neither concept is new, IMO.
There seems to be a less extreme version, where they intend to stay in business but reduce costs by cutting down the line and customer support and maintaning only minimum quality. The only goal is higher profits and no pride in the product. Apex/Bain Capital comes to mind.
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They are selling clothing quality same as Walmart. Tools the same as Harbor Freight. Appliances and yard equipment same as Lowe's. They try to price match Amazon.
Maybe there is no need for Sears any more.
IMO, Lambert got Sears, for the express reason of milking it dry, killing it and eating the meat, and leaving the carcass for bankruptcy court.
finn
Well-known member
Yup, and these are the guys we want to give more business tax breaks to so America can be competitive.
I often look at Sears.com. The prices of name brand products are often bizzare, compared to the going street prices. I was in there and priced a Samsung stove that was like one I had bought except it did not have the $100 upgrade stainless steel top that mine has. They were $400 more than what I paid at a local appliance store. Add the top, if that model is even available at Sears, and they were at least $500 higher. They may match Walmart for quality but the shelves are empty because they cannot afford to stock them. Matching HF for tool quality does not set a very high standard an I doubt they can match them for price. HF is opening three new stores a week and Sears is shutting theirs. I agree, every business has a life span but it is usually because st some point, bad management gains control. Sears decline started a long time ago when they still owned Sears tower and management lived a life of luxury. I remember somebody contrasting it to the spartan conditions at Walmart HQ.
Since Sam Walton died, I think Walmart may be losing it's way, too. Home depot stock is at $156.30 and Sears Holdings is at $7.80.
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PeterT
Well-known member
I stopped shopping at Sears when they started importing everything. I try to shop locally, but typically for tools everything is imported, so I buy my USA made tools online
So I ordered the Craftsman 26 piece wrench set from Sears Parts Direct for $29 on April 20th to have a spare set for the car. I just received notification today, 30 days later, that the item is not available and I will receive a refund in 7-10 days. Really? So 5-6 weeks after placing my order to get notification of cancellation and a refund? Horrible customer service to go along with cheap quality tools. Never again will I shop at Sears or purchase Craftsman products. How can the company be so horribly managed to take so long to figure out something is no longer available? I can't see how Sears can survive with such poor customer service and basic sales failures. I've purchase Craftsman tools for over 20 years but haven't purchased anything recently. I will switch to SK and some Tekton from now on for new purchases.
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They can't. In a short time you will not have the option as to whether or not to shop there. They have reduced inventory to save money. In many stores the shelves are half empty. Sears stock is at $7.80 Home Depot is at $156.30. They are closing stores, They are fighting with suppliers that do not want to ship for fear of not getting paid. A toy company that supplied K Mart has cut them off. I would only buy in the store with no thought of any warranty; mainly consumables like paint. Everybody knows they are going under which just hastens the process.
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Coach James
Well-known member
I'm not trying to be "that guy", but comparing stock price is meaningful only if the companies have the same number of outstanding shares. Comparing market cap is a better indicator of how the market values a company.
Coach
Coach
I'm no finance guy but I understand stores closing, empty shelves.suppliers bailing, ever cheaper product. Fighting with suppliers that are concerned about not getting paid. There would have to be a boatload of shares for 7 bucks and change to be a good price. I'll bet that if you track the price the graph is steadily heading for the dumper. In the the other hand HD has performed quite well. It will soon all be moot. They are toast.
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nbpt100
Well-known member
I have a gift card. I better go use it.
woody 73
Well-known member
This was in the news looks like they are laying off 400 workers at the main headquarters; A very sad day.
http://www.msn.com/en-us/money/comp...oing-restructuring/ar-BBCClge?ocid=spartandhp
http://www.msn.com/en-us/money/comp...oing-restructuring/ar-BBCClge?ocid=spartandhp