https://www.nytimes.com/2000/12/29/business/montgomery-ward-to-close-its-doors.html
6 replies (most recent on top)
Macy's, Kohl's, and probably JCP too, are now getting over a third of their income from credit card interest. There would be a lot more empty anchor stores if they'd sold off their credit card business like Sears did.
Profits From Store-Branded Credit Cards Hide Depth of Retailers’ Troubles - The New York Times
https://www.nytimes.com/2017/05/11/business/dealbook/retailer-credit-cards-macys-losses.html
Wards outsourced/sold their Signature credit and Sears outsourced/sold it's credit as well. Even back in the late 90's early 2000's that was the profit engine that kept Sears in the black. Alan Lacy told employees when he sold credit that "now we have to stand alone as a retailer"... and this point was raised even back then about Wards selling credit and then going under. That is the similarity that I can see between the two companies. Lacy's long gone but his bad decisions continue to linger on. Then EL came along and the hole AL dug got even deeper.
Leena's getting paid $2M to stick around
I was actually working for Wards when the end came. I also, until very recently, worked for Sears. The two biggest parallels that stick out in my mind are:
1) Ridiculous, unbelievable company propaganda right up until the final closing of the doors.
2) Both companies, especially in their final years, took the biggest dumb*sses they could find and made them managers.
Well put
“failed membership model”
Why is Leena still with shc?
Did she get a retention bonus too?
Obviously, if he were to fire her, that would be admitting failure and that he was wrong all along.
I'm not seeing the parallels, as much. What Eddie did to destroy the company was even more astoundingly id--tic, than simply hoarding cash with a bunker mentality. Instead, he squandered it with abandon on stock buybacks, and spent it on crazy IT projects instead of things that mattered.
Wards did fail to follow the customer to the suburbs, just like Eddie failed to meaningfully follow the customer online. But ultimately it was Eddie's ignoring the core demographic (bricks and mortar, older customers), while vainly chasing a failed membership model, that really did the company in.
I just hope that future companies will lock the door when they see a smiling Eddie walking in. Or take this as an object lesson that hedge funds destroy value rather than create it.