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.

Comments

Business Model

[rlp]

When Sears operated in the 19th century their business model was to provide a large catalog of merchandise that was ordered by the customer electronically (telegraph) for fulfillment via delivery (railroad) to the customer. They switched to brick and mortar when their business model became obsolete. Ironically they're going out of business because they've failed to adapt to the return of their original business model.

Re:Business Model

[kbonin]

Like most people I know who stopped shopping at Sears, it was because of quality. Craftsman was one of the actually premium quality brands they used to carry. But when they dumped their high quality supplier and started rebranding cheap import tools as "Craftsman", they were no longer significantly different from cheap imports sold anywhere else. The "lifetime" warranty would clearly die with the store, so that lost any value and the brand was burnt for a few quarters of boosted profits in true modern American MBA success story SNAFU. I've spent thousands on Craftsman tools in the past, and once upon a time that meant I spent tens of thousands at Sears on decent quality appliances, clothes, tires, etc. But with a collapse of quality, why bother going there? Most "premium" brands worldwide are now repeating this pattern to cash out their brand equity.

Re:Business Model

[squiggleslash]

Let me guess, you think Toys R Us died for the same reason?

There are plenty of brick and mortar companies that still exist and are doing well (at least as well as they were doing twenty years ago.)

The issue with Sears boils down exclusively to mismanagement. Lambert is an ideologue, and insisted on breaking it up into parts that, for no good reason, compete with one another. That means the appliance department competes with the clothing line. There's no good reason for this, and it's impossible for the company to benefit from the synergy of having a wide range of products.

The first warning signs were about a decade or so ago. You may remember that its K-Mart stores turned into "Sears Essentials" (which was fine, it was just a marketing exercise), but then suddenly half the SE stores disappeared. Why? Because of a fiasco where none of the stores had extended hours in the run up to the Holidays, which traditionally is when most stores do most of their business.

Why was this? Well, because in order for that to happen, one division would have had to propose the stores open for longer. That division would then have been on the hook for the costs of all of the stores staying open. The divisions couldn't jointly propose this and share the costs, because Lambert had banned cooperation between them. So nobody proposed extended store openings, and the stores had normal opening times in the run up to Christmas.

Result? The first round of massive cost cuttings. Sears underperformed, and the entire network was pruned. Most Sears Essentials were within ten miles of a mall, which also had a Sears, so they were closed as redundant. This lead to increased losses because not everyone wants to shop at a fucking mall, Sears Essentials was a good idea.

Why does Lambert think this is a good way to run a company? Because this is his reading of Ayn Rand. Never mind the fact that businesses are a thing because people and entities achieve results when they work together, he really thinks that if womens lingerie competes for resources with appliances then somehow they'll both compete better with Macys.

Fuck Lambert. He's destroyed a once great company.

Quit it with the Bricks and Mortar obsolete bullshit. If they were obsolete they would have died long ago, Almost all B&Ms have always been a low margin business. I've heard of store chains actually selling goods at below cost, surviving by paying their suppliers three months late and making money from the Interest. If B&M was obsolete EVERY CHAIN WOULD BE DYING RIGHT NOW. Malls would be deserted. The Thanksgiving parade in New York would now be named "The NBC/Amazon.com Thanksgiving Parade." Walmart, one of the lowest margin companies on Earth, would be a punchline, not an ever growing threat to the economy.

Retail's fine. Businesses go bust from the time to time, even old ones. Lambert is terrible.

Re:Business Model

[Greyfox]

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.

Re:Business Model

[DerekLyons]

The issue with Sears boils down exclusively to mismanagement. Lambert is an ideologue, and insisted on breaking it up into parts that, for no good reason, compete with one another.

The first warning signs were about a decade or so ago.

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 B&M was obsolete EVERY CHAIN WOULD BE DYING RIGHT NOW. Malls would be deserted.

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, one of the lowest margin companies on Earth, would be a punchline, not an ever growing threat to the economy.

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.

Re:Business Model

[squiggleslash]

No, the first warning signs appeared back in the 80's as Sear

The current year is 2018, around 30 years after the period you're talking about. Since then everything has changed. Sears has different owners, different management, and for the most part the staff is different.

The events I described are post Kmart merger, with the current management, and relate to how the current management system has impacted the company. Whatever happened during the 1980s is really mostly irrelevant. It survived those events.

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.

You're accusing me of parrotting crap when you yourself repeat the nonsense that American retail is dying? Seriously? Who is parroting bullshit here? 'cos what you've written is textbook "Woe wither retail thanks to Amazon" stuff that could have appeared in Forbes.

So explain it: explain why the vast majority of chains that existed 20 years ago still exist - sometimes rebranded, but almost all of them are still there. You're suggesting that the "middle class" has lost its purchasing power. That should, by rights, given the tight margins of all of retail, caused virtually every chain to be wiped out.

But strangely, the only major chains that have been wiped out have been those you can easily point at and say "That wasn't a loss in business, that was mismanagement." Why do you think that is? Off the top of my head, the only major retail corporations missing now are Borders, which is the one example of a company that might have been killed by Amazon, Circuit City (which was never mall based, and which was poorly run, making some major gambles that didn't pay off including DIVX and firing all their salespeople), Toys R Us (which was extremely profitable, but was intentionally bankrupted by a consortium of vulture capitalists who loaded it up with debts for loans it never saw a dollar from, and forced it to pay them down and pay the interest on them), and, now, Sears, which again we know was mismanaged.

My local mall doesn't seem any less full of stores than it did 20 years ago. And that's surprising, because you'd expect individual retailers to become obsolete as fashions change and technologies to develop entirely new classes of things to buy.

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.

I didn't say they're an increasing threat to the economy because bricks and mortar aren't obsolete, I said they wouldn't be a threat if B&M were obsolete. WALMART IS BRICKS AND MORTAR. If Bricks and Mortar were obsolete, Walmart could not threaten the US economy. It does.

Re:They should go online only

[Opportunist]

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.

Re:They should go online only

[TRRosen]

They should have won the online race with their catalog history.

They did. They sold them all off and left behind the rotting corpse of brick and mortar to die.
Sears liquidated long ago. The financial term is cash cowing. Selling off everything of value and abandoning the rest.

Revises my definition of Lifetime I guess

[SuperKendall]

All those Craftsman tools I own with a lifetime warranty, appear to have just run out of life in the warranty...

Re:Revises my definition of Lifetime I guess

[rlitman]

Actually, the Craftsman brand was sold off previously and is not at risk. Though your warranty status is still in question.

Re:They should go online only

[Anonymous Coward]

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.

Re: Goodbye Sears

[ClickOnThis]

Wow, I didn't know that Sears used Linux; else why would this article be posted here?

The downfall of Sears is a consequence of the migration of commerce from brick-and-mortar to online. Like many other retailers, they were Amazonized, despite their own online presence. So this story is in the ethos of "news for nerds, stuff that matters".

Amazon didn't kill Sears

[Anonymous Coward]

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.

Re:Amazon didn't kill Sears

[jandrese]

Because then you are in danger of being bought out by a hedge fund, having the debt from the buyout transferred to your company, and have to sell off all of the assets to pay for your own buyout and then going bankrupt when the new overhead costs of renting make your business unprofitable.

It's got nothing to do with business model

[rsilvergun]

they got bought out by a Bain Capital style "Vulture" capitalist, Eddie Lampert. He started off his tenure by mismanaging them in a crazy, Ayn Rand themed style where each department was pitted against the other, resulting in massive infighting. Meanwhile he was busy extracting anything of value from the company for his own personal gain. At the moment he's been loaning them money to set himself up as the primary creditor so he gets paid when they liquidate. That's how he's legally extracting the assets without running afoul of laws designed to protect shareholders in a publicly traded company.

The real problem is that in America you no longer make money by running successful companies. You make money by firing up a startup and waiting for a buyout or by buying up an existing, longstanding company and gutting it like a fish. That's the reason guys like Lampert go to school for business, they're learning how to legally do things that should be illegal.

Re:It's got nothing to do with business model

[squiggleslash]

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.

Re:It's got nothing to do with business model

[PeeAitchPee]

The real problem is that in America you no longer make money by running successful companies. You make money by firing up a startup and waiting for a buyout or by buying up an existing, longstanding company and gutting it like a fish.

This is complete horseshit. You are cherry-picking one high-profile example of someone being a Trump-like dick in the aftermath of an enormous merger in the most turbulent sector in the entire world and painting the entire US economy with the same brush, which is just nonsense. There are 30.2 million small businesses in the US of tremendous diversity which employ 58.9 million people, or 47.5% of ALL workers in the US, and the median income for self-employed people working for an incorporated business was $50,347 in 2016 (certainly not "vulture capitalist"-class income). Looking at the report, these owners are NOT all "startups waiting for a buyout" and they're definitely NOT all people buying an "existing, longstanding company and gutting it like a fish" (source: US Small Business Profile, 2018). They're just the owners of plain old businesses (the kind you say don't exist anymore) in health care, food service, retail, manufacturing, tech, construction, waste management, you name it. Do you have ANY numbers to back up your ridiculous claims?

The US still innovates far better than any other country in the world, and this in turn provides ample opportunity for smart and hard-working people to build real, successful companies which provide truly valuable goods and services, with growth and long-term profitability in mind. These in turn create jobs and economic opportunity for the people they employ, as clearly documented in this report.

Is it easy? Absolutely not. But it never has been, and it's not supposed to be.

Re:It's got nothing to do with business model

[alvinrod]

Do you have ANY numbers to back up your ridiculous claims?

He never does. He just makes outrageous claims that read well to people looking to buy into some outrage he's peddling. There was one some months ago where he was complaining about how much money Jeff Bezos made each day and if you bothered to do the math, it came out to some impossible yearly figure where Amazon would need to more than double value each year for it to work out. Either the figures were completely pulled from his ass, or he grabbed something he'd read and tried to extrapolate in a completely inappropriate way.

If you stop to think about the idea that he's proposing, you'd realize it's pretty stupid. Why spend a lot of money to acquire something in order to ruin it to squeeze a little bit of profit out of it. You're better off just not spending your money on it to begin with, never mind that it makes everyone else pretty hesitant to do business with you in the future and the next buyout would be vastly more expensive simply because the sellers won't trust you. If you actually look at Eddie Lampert's net worth it's estimated to have gone down considerably since he took over Sears, so it's pretty hard to say that even if he's some nefarious vulture capitalist that he's had any success. In 2006 when Sears and K-Mart merged, he was estimated to be worth $4 billion. As of earlier this year, he was only estimated to be worth $1.6 billion. The same Forbes article indicates he was worth twice as much in 2013 when he took over as chairman of Sears.

Cause of death: hedge funds and myopia

[ErichTheRed]

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.

Re:They should go online only

[Anonymous Coward]

"Sears definitely could have positioned itself as "Amazon" but as with Kodak's management at the early stages of digital photography, the management at Sears clung to the past decrying online shopping as "a fade that will not sustain itself into a viable business model.""

Wow. This damn near brought a tear to my eye. No, seriously. I used to work for Kodak, and this is EXACTLY what happened.

Idiot management really thought they could "bury" digital photography after they invented it, so as not to hurt film sales.

Put Sears on Layaway

[jfdavis668]

Someone should put Sears on layaway. Then they can pay for it over time.

Re:They should go online only

[Anonymous Coward]

They did not get killed by the internet. They got killed by Eddie Lampert.

Re: Goodbye Sears

[Anonymous Coward]

The downfall of Sears is a consequence of the migration of commerce from brick-and-mortar to online

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.

Mr Roebuck is laughing at last.

[140Mandak262Jamuna]

Sears and Roebuck started the company, but Mr Roebuck bailed out early. Sold his stake to Sears for the princely sum of 25,000$. Later, after Sears became a super success, he came back. Sears installed him in a very ornate office in the Chicago HQ and paid him a salary. Good cop/bad cop negotiations with small vendors will include, "No, Mr Hancock, even if I agree to this deal, Mr Roebuck would not. Let us see if we can convince him". Mr Roebuck played his part by saying yes or no according to instructions.

Now finally Roebuck can console himself, "I knew it would go bankrupt, eventually. Glad I got out with my investment intact!".

Loved Sears

[Ferretman]

That was THE store to go to when I was a kid at the mall....the sheer volume of stuff, the acres of floorspace, the huge display of lights at Christmas! Awesome times, awesome store.

They didn't adapt quickly enough, sadly.

Ferret

Re: Goodbye Sears

[ClickOnThis]

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.

Re: Goodbye Sears

[LordKronos]

It's actually a combination of competition from many faces. Clothing is a major item for Sears, and yes Walmart and Target (and Kohls) are competion for thier price point. But another big item for Sears is appliances (at least in my mind, that is what they are best known for, but I'm not sure if that's the biggest part of their bottom line). In that area they've faced competition from Best Buy, Home Depot/Menards/Lowes, Costco, and others.

Along with clothing and appliances, tools is the one other thing that comes to mind when I think Sears. And again, Home Depot/Menards/Lowes is big competition here, but I really feel like (and I may be way off) Harbor Freight is a huge source of competition for them here. Yes there is a bit of a quality difference (though that is a bit diminished as I don't think craftsman quality is quite what it used to be), but honestly for most people the cheap Harbor Freight tool is sufficient 9 out of 10 times, and for the price of the craftsman tool you can just replace the harbor freight tool 5 times (and that's not even considering most of the HF non-power tools have a lifetime replacement warranty anyway)

Of all the things out there, I really feel like Amazon is one of the smallest contributors to Sears' demise.

Re: Goodbye Sears

[RhettLivingston]

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.

It's not Ayn Rand's fault

[rsilvergun]

it's people's fault for listening to her. Basing an entire social system around selfishness in the face of all reason and research (multiple studies have shown how imprinting to your mother creates human empathy and how imprinting is essential to the survival of our species) is just plain bad juju.

But Lambert was only doing the Ayn Rand thing for fun. His real goal was, is and continues to be bleeding Sears dry in a legal manner.

Re: Goodbye Sears

[jwhyche]

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.

Re: Goodbye Sears

[StuartHankins]

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...

Bye bye escalator

[AndyKron]

Sears is the only place where I live that has an escalator. Now where am I going to go?

Re: Goodbye Sears

[UnknowingFool]

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.

Re: Goodbye Sears

[ShanghaiBill]

Sears made many mistakes. They were hit by Walmart on the low end, and "prestige" stores like Nordstroms on the high end. It is hard to survive in the middle, although Target is thriving there.

They were in decline long before Amazon, yet they were better placed than anyone to compete with Amazon. They had done mail order for more than a century. All they needed to do was move the ordering on-line. Instead they shutdown their catalog operation. In hindsight that was an insane move, although it didn't make much sense at the time either.

The last straw for me....

[Rick Zeman]

...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.

Re: Goodbye Sears

[techno-vampire]

I think you have that backward. Sears catalogs were thick and heavy, so they were printed on thin paper to cut down on shipping costs. Once the family was done reading it, and making any orders, putting it in the outhouse saved money because they didn't have to buy TP, assuming it was even available back then.

Re: Goodbye Sears

[jbengt]

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.

Re:They should go online only

[Voyager529]

all they had to do is to simply trade catalog for online presence.

The problem is that by the time Amazon rolled out, Sears had mostly traded catalog for brick and mortar.

No, Sears trade catalog for real estate. Most of their business has to do with land and building holdings, rather than selling goods...which is why they have existed for the past decade, long after their foot traffic had been lost to Wal-Mart and Amazon.

To the bigger topic, I don't know if Sears could have truly made the transition to the internet the way Amazon did. Bezos knew the key was "get big fast", and they did it by offering $20 books for $10, basically letting their early investors subsidize purchases, and expanding once it was practical to do so. This helped tremendously because they had to get people over the hump of using their credit cards online (remember when people were terrified of that?), and it's far easier to get logistics down with smaller items like books. Sears had lots of the logistics already in place, but they would have been expected to start with washing machines.

Sears wasn't going to offer a $100 Craftsman toolset for $70 if it was ordered online and shipped, people looking to get Sears products were unlikely to opt to use the internet to get those products just because it was the internet, and while people order everything from toilet paper to RAID controllers from Amazon *now*, Sears following the lead of a nascent internet bookstore that spent a decade selling everything at a loss would have been laughable in 1995, and justifiably so.

Yes, being overtaken by Amazon will be the final chapter in the story of Sears, but that's only obvious in the rearview mirror when the winner is known. It is both effective management and luck that Amazon is the new Sears, and not a nostalgic footnote like Pets.com or Myspace.

Re: Goodbye Sears

[Lije Baley]

I would agree on Harbor Freight being a factor, though on tools Home Depot and Lowes are very convenient these days. Appliances are one place where Sears should still have had the upper hand, because they were the only store in my area that had a large locally-stocked selection. Forget Home Depot and Best Buy -- in recent years they have dwindled their in-store appliance inventories to practically nothing. So it's Sears vs Lowes around here, and Lowes wins for me because Sears' website is garbage. My measure of a store is whether I can find what I want at a decent price, at a local store, on their website without being bamboozled by "marketplaces" and out of sync inventory systems.

Re: Goodbye Sears

[jbmartin6]

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?

Re: Goodbye Sears

[ShanghaiBill]

Another mistake (in my opinion) was their move to "zones" with separate checkout counters in each zone, rather than a row of checkouts near the exit.

Zones require a lot more employees, and employees only know about the products in their own zone. If you ask a random Sears salesperson what aisle had the power drills, the answer is often "That's not my department". I never get that answer at Walmart or Home Depot.

If no one is staffing the checkout register in one zone, you have to wander around the store looking for another that is open. So you end up buying your power drill in the ladies lingerie department.

Nordstroms uses zones, but they are a prestige brand and charge prices high enough to justify the extra staffing.

Re: Goodbye Sears

[RhettLivingston]

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.

Re: Goodbye Sears

[jwhyche]

This is a very possible. I'm fully embracing the urban myth part of the Sears catalog here. More of that urban myth is the catalog stopped being used for this purpose some time after they switch to glossy paper. This could have been because by then most houses had access to purpose made cheap toilet paper. But I prefer to believe that it was because shit would simply no longer stick to the glossy pages.

Re: Goodbye Sears

[jwhyche]

Well it is kind of hard to improve on toilet paper, even after a hundred years. That is if they got it right in "The Puritan." One of the biggest issues with toilet paper, it took them awhile to come up with a perfect way to get all the splinters out.

I wonder if the "The Puritan" is guaranteed to be free of that issue too?

Re: Goodbye Sears

[jwhyche]

The explanation given elsewhere that thin paper = cheaper postage seems a lot more feasible.

You are probably correct and this is the original reason. But as to what could be gained from doing that? Well it was well known that a number of the Sears catalogs where used as toilet paper. Good cheap paper was hard to come by on the prairie. It would make good business sense to embrace this use.

Think about it. What would have happened to the catalog after the family got through ordering from it? It probably would have been thrown out if it couldn't be repurposed. If it finds its way in to the out house, where you have a captive audience reading it, it might mean more sales.

To me this would only seem logical. It's going to be used as toilet paper eventually, so why not embrace that? Turn it to your advantage.

Re: Goodbye Sears

[Daemonik]

Actually, the major factor against Sears succeeding was Eddie Lampert himself. He had zero knowledge or experience in retail stores, being a career hedge fund manager. He's a devoted Libertarian and forced each department of the company to act like it's own separate company, fighting for funding. If Kenmore (Sears branded) appliances were on sale, they had to pay their ad department more than what other brand appliance mfgs. were paying or they wouldn't get mentioned in the stores own sales fliers. The constant bickering and loan servicing simply ate into all their revenue until the company imploded like KMart (also owned by Lampert) did before them.

Re: Goodbye Sears

[jonwil]

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.

Re: Goodbye Sears

[chaboud]

For me, Sears hit a threshold when they began to think of the short term rather than long term relationship with the customer.

We purchased a mattress from Sears, and the wrong item showed up (different firmness). The retail side of Sears said that we would have to contact the shipping and logistics part of Sears to return the mattress, and the shipping and logistics part said that we would have to wait six weeks for them to pick it up (when they answered the phone, which was rare), and we could schedule then.

When six weeks had passed, both parts of Sears finally got on the same page: they wouldn't take a return because six weeks had passed.

I realized then and there that I'd be played by a company that just wanted my ~$1k and was willing to lose me as a customer to get it. I never went back to Sears. Never set foot in there, never bought a Craftsman tool, nothing.

It is far easier to lose a customer's trust than to gain it, and Sears has lost me forever.

Sears dying is a lesson in the value of customer service. Act like a shitty fly-by-night scam shop, disappear like one.

Re: Goodbye Sears

[ClickOnThis]

My favourite is the "Climax" at $3.95 per hundred rolls. Sounds like it was marketed for more than one use in the bathroom. ;-)

Re: Goodbye Sears

[yes-but-no]

your power drill in the ladies lingerie

sounds like a movie title ;)

Re:Goodbye TP.

[jwhyche]

At one point it seems like it did. Although "need" would be a generous term for it. What I find interesting is today we conciser ads being stuck to things to be something new. Its nice to know that 100 years ago people had the same problem with it that we have today.

Since we are well in the territory of useless trivia I learned one more thing about advertising through out the ages. Did you know that Roman gladiators would give product endorsements? They cashed in on their fame just like modern athletes. They don't show this in the movies because it wouldn't fit in with the image we have of the period. So Disney's Hercules was more to life than the movie Gladiator.