Slashdot Mirror
Sears, the 125-Year-Old Iconic Retailer, Has 24 Hours To Survive (cnbc.com)
An anonymous reader shares a report: Sears, the employer of more than 68,000 filed for bankruptcy in October. Its last shot at survival is a $4.6 billion proposal put forward by its chairman, Eddie Lampert, to buy the company out of bankruptcy through his hedge fund, ESL Investments. ESL is the only party offering to buy Sears as a whole, people familiar with the situation tell CNBC. Without that bid or another like it, liquidators will break the company up into pieces. But as Lampert stares down a deadline of Dec. 28 to submit his offer, he is quickly running out of time. As of Thursday afternoon, Lampert had neither submitted his bid, nor rounded up financing, the people familiar said. Should Lampert submit a bid, Sears' advisors would have until Jan. 4 to decide whether he is a "qualified bidder." Only then, could ESL take part in an auction against liquidation bids on Jan. 14. It is possible Lampert, Sears' largest investor, secures financing in time to meet the deadline, these people said.
They're by far not the only catalog retailer that got killed by the internet.
Yes, they should have been what Amazon is now. They had it all going for them. They had the whole logistic and infrastructure in place, all they had to do is to simply trade catalog for online presence.
For this, though, you need managers that actually see past their quarter report and can anticipate trends. Old, entrenched corporations rarely have that.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Their stores seem way to big for the volume of traffic.
Sears has been out maneuved by the car and now the internet. They should have won the online race with their catalog history.
No. They put K-Mart clothes on the racks and moved Crafstman tool production to China.
It used to me my go-to store for everything. After that, I never went back.
Eddie Lampert did.
He knew years ago the most valuable thing that Sears had was the land under the buildings. Sears, like many older companies owned the land on which their stores sat.
The long therm plan was always to milk the company of all its assets.
Sears performed a land leaseback deal in 2015 - essentially becoming a tenant on many of its own properties:
https://www.hbsdealer.com/news/sears-pulls-its-sale-leaseback-deal/
Once the retail business stopped spinning off cash, sale of the land assets is all that remains and the plunder of the company will be complete.
Sure, you can blame Amazon but Amazon is simply a fantastic cover for the enormous plunder of company assets pulled off by management in broad daylight.
I'm 43 so I did grow up in an era where Sears, JCPenney and a couple of regional department stores were the source for everything that most middle class families bought. People forget how easy it is to find out about new products and buy them now, compared to even 20 years ago. Memories of Sears for me include the tail end of the catalog, and the place I saw home computers for the first time as well as video games. In those days, these stores were the way people found out about new things to buy, and in some respects were the tastemakers for the average non-fashionista crowd.
I think the hedge fund vultures swooping in and loading up the companies with debt was the accelerator (Toys R Us would probably still be here if they weren't in so much debt.) But the big thing appears to be too much inward focus and not keeping up with competitors. I wonder if this will eventually happen to Amazon as well. Sears was the country's largest employer for quite some time, and I'm sure most people would have considered it foolish to start a retail business that directly competed since they were untouchable. I think I read somewhere that Sears executives didn't even consider Walmart a competitor until they got bigger and started selling similar things.
Companies can't go chase every new idea like an ADHD kitten chasing laser pointers. But, they do need to keep an eye on what's happening and respond to trends. Walking into my local Sears is like walking back into 1985 or 1990. Too agile and you're just chasing the next fad, but milking the cash cow too much will kill it eventually.
Well, it's also a result of Eddie Lampert's management.
He bought it, skimmed off the value and directed to his own company, and then left a failing business behind him.
This really is a story about how predatory capitalism can strip the value out of a large business, and lead to the failure of that business. This was a transfer of wealth out of one corporation and into another, to the detriment of the corporation being sucked dry.
One might argue that the fiduciary duty to the shareholders of Sears took a back seat to Lampert's holding company. I would argue this was theft on a large scale by a vulture capitalist.
Here in Canada they basically did this, and left all of the employees with no pensions.
This shit really is the most awful aspect of capitalism, rich assholes only looking out for their own profits can destroy large corporations.
You think all those jobs at Sears are coming back? The societal cost of this shit is staggering.
Which seems rather Odd. Because Sears origin was with Mail to Order Catalog shopping. Online shopping really isn't that much different then from that model.
Indeed. Other posters have pointed that out. Sears didn't even drop the ball -- they joined the game too late.
Hit enter too soon. More correctly, they left a game they were once the masters of, and then re-joined it too late, after the game had changed.
Further extensions of the metaphor are left as an exercise.
If it weren't for deadlines, nothing would be late.
Mom and Dad had a grudge against them from the '70's. Apparently they'd purchased a TV there that never worked, and Sears jerked them around about the problem until it went out of Warranty. So they went elsewhere and bought a Sony color TV that lasted 30 years and the family never bought anything else at Sears. I like to think that this in some small way contributed to their demise.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
The downfall of Sears is a consequence of the migration of commerce from brick-and-mortar to online.
Which is pretty crazy considering they were the original mail order phenomenon. Sears' past is not a brick and mortar past. It was catalog orders and many of its customers never saw a store.
They were essentially beat at the game they pioneered. The only real differences between Amazon and the Sears of years ago (that was the only source for goods in much of rural America) is a live catalog versus a paper catalog and a modernization of the distribution system to take advantage of computer-based tracking and organization to partially decentralize it.
I'd have to look carefully at the numbers to decide if Amazon is any more dominant today than Sears was in rural America in the early 1900s.
Since, for some reason, we are talking about the Sears and the catalog here on /., I figured I would toss in some trivia that is just as relevant.
The original Sears catalog was printed on outhouse friendly paper. It was done so because the main place the Sears catalog would end up was in the outhouse. Where a it would be the primary reading material while one was taking a shit. Then when you where done you would just rip a page out of the catalog and wipe your ass with it.
Sears knew this was what the primary purpose of the catalog was being used and designed it to act accordingly.
I read at +2. If your post doesn't reach that level I will not see or respond to it.
Absolutely agree. Craftsman electric tools have gotten worse over the years as many are rebranded Ryobi and others. Once Sears sold Craftsman rights to Lowe's they lost one of my only reasons for shopping at Sears -- note that was after Craftsman was purchased by Stanley. Maybe a better way to say that is here: https://www.chicagotribune.com...
K-Mart didn't merge with Sears as part of their bankruptcy, they bought Sears a few years after their bankruptcy because they were profitable again. Neither company was having significant problems at the time of the merger, and were healthy and successful until Lampert took over.
You are not alone. This is not normal. None of this is normal.
No, the first warning signs appeared back in the 80's as Sears began to slowly lose ground to big box retailers. Circuit City and Best Buy chipped away at it's home electronics and home appliances business. Lowes and Home Depot chipped away at it's tools and home appliances business. By the 90's, Target was eating away at pretty much all of Sears' traditional markets, and even Wal-Mart started to take it's share as the death of the middle class accelerated. And then there's Amazon...
There was also mismanagement problems as a great deal of power had devolved to the corporate buyers (who individually decided what Sears would and wouldn't carry) and the regional managers (who controlled where and when stores would be opened and closed).
Or, to put it another way - the problems at Sears go back a long way, and it's been quietly dying for decades. At worst, Lambert accelerated the process.
If you've been paying attention to American retail (as opposed to parroting crap you read somewhere but don't understand)... Chains are dying, and malls are becoming deserted. This isn't due to bricks and mortar being obsolete (though the net has played a role), but rather due to the loss of purchasing power among the American middle class.
Walmart is an increasing threat to the economy not because bricks and mortar aren't obsolete... But because they sell stuff cheaply, and in real terms American's have ever less purchasing power.
Yes those were factors, however, the fact that Sears was part of an LBO by Lampert which saddled them with huge amounts of debt was a significant factor. Also since he was the biggest creditor he installed himself as CEO and made sure he was enriching himself. For example, Sears sold off almost all of the valuable real estate properties to a company he owned then charged Sears exhorbitant rents.
Well, there's spam egg sausage and spam, that's not got much spam in it.
...I needed a car battery. Looked at Sears.com, found one on sale that fit my car. Drove to Sears to buy that battery and found out that said battery was priced wayyyyy higher than online.
I asked how that could be. The answer was staggering: "[Brick and mortar] Sears and sears.com are owned and run by different entities with different pricing structures."
In other words, how to fail at both at one time as neither got my business.
Agreed.
I did a lot of work for Sears in the 80s thru the mid 90s. They were constantly changing their idea of who they needed to be. One year they're trying to compete with K-mart on the low end, the next year Walmart eclipsed them both, and they switched to trying to compete with high-end department stores. One year clothing is the answer, the next it's hardware, and then maybe appliances, or electronics, or small specialty stores, or big department stores, or whatever the big idea of the year is.
At their heydey, they were a big conglomerate that owned real estate, banking, insurance, and they launched Discover Card. Then one-by-one they divested or spun off their profitable divisions in order to concentrate on their core (in)competency - Retail Sales.
But their biggest mistake was closing the mail-order catalog sales just before internet sales started to take off. They could have been Amazon if they had tried.
Right, they spent billions over the last decade or so on stock buyback programs. I wonder what Sears would be like today if they had invested that money into staying competitive?
This posting is provided 'AS IS' without warranty of any kind, implied or otherwise.
Here is an interesting shot of toilet paper being sold on toilet paper. :-)
Note toilet paper being sold in 1897 Sears Catalog. The offerings start at the bottom left corner of page 23 with a picture that is very much like the modern TP roll, perforations and all. A case of 100 rolls started at $2.25, an amount that was comparable to a day's pay at the time.
Too many once great businesses have been killed by Wall Street greed.
Sears (and K-Mart).
Toys R Us.
Dick Smith here in Australia.
And no doubt others.