Yes, Blame Eddie Lampert For Sears' Bankruptcy, But Don't Forget These Other Contributors
https://www.forbes.com/sites/warrenshoulberg/2018/10/15/reasons-2-10-why-sears-and-kmart-failed/#7e48f957cef4
10 replies (most recent on top)
Before Eddie, Sears paid its vendors. Under Eddie Sears filed for Chapter 11 and vendors got shafted by getting less than what is owed to them. Under Eddie more stores shuttered under his leadership.
Examine this thought:
What happens to a store manager when sales and credit cards don't meet their goal? The District Manager cans the store manager and hires another manager to try to turn THAT store around. The DMs don't focus on what previous managers have done to that store. They are focus on the new manager to help turn that store around.
Alan Lacy was part of the problem. Eddie Lampert IS the problem.
Eddie didnt orchestrate anything and take over Sears. Alan Lacy gift-wrapped it and handed it over to Eddie. Then, for whatever reason, Sears Canada put Lacy in charge and he did the same thing with them that he did with Sears Roebuck.
You're giving Eddie entirely too much credit. All he was was the man standing there with money in his hand. Lacy set the whole thing up. twice.
I do agree with most of your other comments though. This could have all be avoided if the right people had been concerned with long term, but they weren't. I believe it's because early on Eddie had a plan to sell all of it and make a big chunk of cash but the problem was that nobody could afford to buy it all. By the time those that could afford it, would afford it, it was too late and things were already out of control and the business just isn't worth much now.
I've heard the WalMart rumor a few times and it would certainly be a WalMart thing to do to try and buy what's left of Sears. That wouldn't shock me except for the fact that WM is probably better off without taking on the problems that Sears has become.
I agree with the last poster. SHLD could have made it with the right execution and leadership. The downsizing should have taken place about a decade ago. Would it have been another Target or Walmart? Probably not, but could have been a stable retailer. Shop your way could have been much more too, but in typical Sears fashion it was just thrown out there and not properly managed or implemented.
Ames was kinda the opposite of Kmart/Sears. Ames was actually doing quite well and thought the needed to be bigger to survive so they bought the nearly bankrupt Hills to increase the store base, assumed they debt and spent money remodelling the stores and getting new computers. They really should have just let Hills go bankrupt and bought it, sans debt, for less money. They may have survived.
Eddie waited for the Kmart bankruptcy then used his financial engineering to orchestrate a takeover of Sears, but Kmart was a dead retailer walking. I used to go to them and would run across these hulking Kmarts in towns that time had passed by with 20-30 year old merchandise still floating around. If he was smart he’d have converted the remaining good locations to Sears Essentials and Sears Grand, and shuttered the rest of them back in like 2007 then exited all the dying malls. Had he done that back then we wouldn’t be her discussing this today but would probably be discussing Sears purchasing JCP stores where they had no Sears.
Instead Eddie squandered billions on SYW, which was actually a good idea and much like Rakuten, through pointless merchandise giveaways because no one knew what the heck they were doing.... And it is still happening!
Looks like Eddie's shoe size IQ defenders still be defending!
Eddie did not inherit a dead business. The business at Sears was challenging yet still very profitable. Kmart was a disaster before Eddie scooped up the carcass, but showed signs of life once they started adapting some of the Sears’ strategies. Eddie pitted VP against VP and stood back and watched as departments destroyed each other clamoring for a dollar out of d—beat Eddie’s pocket. He didn’t put a penny into any capital expenditures for store remodels. No brand new full line stores. He kept touting the evolution of brick and mortar retail to online, yet invested nothing in e-commerce. And Shop Your Way? Please....
Sears isn't failing... Why can't you people see how great were doing. Gonna start opening up more new stores!
How low does your IQ have to be to believe that 99% of the blame doesn't belong to Eddie? He inherited a $55 billion revenue business, 5500 stores, and over a billion dollar in annual positive cash flow. Google didn't have a fraction of that cash flow, neither did Amazon which was a bookseller, Target had no online business, and the biggest online competitor was Walmart with a fraction of Sears' delivery capacity. Sears had 3,500 stores in 2010, reduced to 182 in a decade. Many have turned $0 businesses into multi-billion dollar ones a hundred times over in that timespan, while Eddie threw it all into protection plans, Sears Credit Cards, a losing real estate plan, and Shop Your Way, losing almost 15 billion in just a decade, destroying businesses that had very little to no competition like durable goods and Sears A&E. There's numerous and myriad reason many reasons that he's widely acclaimed by many as the worst CEO of all time by media, fellow executives, wall street, and academia.
Good old Eddie, the buck always stops somewhere else.
Forget the root causes of Sears' and Kmart's collective demise. Those were there BEFORE the arrogant and erratic Eddie put together this mess. He then proceeded to impose a ludicrous management style, overemphasized "members" over "merchandising", and looted the businesses - principally real estate, deferring or completely eliminating maintenance. Anyone with any knowledge of his bungling over the last 15 years or so could foresee that the bankruptcy "rescue" that was supposedly in the interest of the 40,000+ jobs he was going to save was anything but a way to extract more money from whatever remained. Right now, what is left is the equivalent of roadkill that has not quite expired.