Sears' CEO Blames the Media for Company's Decline - But His Obsession With Wall Street Set It Up...

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Sears' CEO Blames the Media for Company's Decline - But His Obsession With Wall Street Set It Up for Failure
By Hayley Peterson/ Retail/ Business Insider/ businessinsider.com

• "Sears Holdings spent $5.8 billion buying back shares from 2005 to 2010, draining the company of resources.
• CEO Eddie Lampert defended the buybacks as the most efficient use of capital, arguing that investment in stores wasn't necessary.
• The company — considered the most vulnerable publicly traded retailer — is now selling off assets to stay afloat.

Sears has survived two world wars and the Great Depression. But after a decade under the control of a former Goldman Sachs executive turned hedge fund manager, the 124-year-old retailer is imploding.

Sales have been cut in half since 2009, and the company is burning through cash, closing hundreds of stores, and selling off assets in an attempt to stanch the bleeding. Executives are fleeing and store workers face a grim future..."

AP


Richard

 

[easyrider]

I went to Sears the other day and wow, it was looking pretty bare in the tool department. They only had two circular saws of the Craftsman brand. A few years ago Sears was "Brand Central" selling all brands of power tools. I looked at the shelves and it doesn't look like Sears is restocking. The Sears advertising in our newspaper has shrank to a couple of pages. I think they are about done.

I went to Sears about a month ago to get something for my lawn tractor. I kid you not, there were maybe 3 people working in the entire store. I think I could have loaded up a cart and walked out the door if I was so inclined but Im not.

Bill

 

[pedro47]

Sears went downhill after they purchased all the K Mart stores.

 

[Phydeaux]

I'm surprised they're still around.

 

[dominidude]

It's not just Sears, a whole bunch of retailers are about to go out of business because of automation and artificial intelligence.
I read that the number of unemployeds in retail will dwarf 10 times the numbers laid off from manufacturing.
Walmart is not inmune.

According to the MIT Technology Review, 83 percent of jobs that pay less than $20 an hour are under threat from automation.

https://theoutline.com/post/1120/ai...implode-us-blue-collar-jobs-trump-has-no-plan

 

[zinger1457]

I made an online purchase at sears.com and selected to pick up the item at my local store. Few days later received a notice that the item was ready to pickup. Went to the store and after ~20 minutes of looking for it they said they didn't receive it and I would have to contact the online group. Called online support and they told me it was delivered and it was the local stores problem, there was nothing they could do. Again went to the local store and there response was that it was the online groups problem and there was nothing they could do. This went on for two weeks until I disputed the charge with my credit card, then Sears called saying they found the item. Haven't shopped at Sears since, that was about 2 years ago.

 

[dougp26364]

I use to spend a couple thosand dollars every year with Sears. We'd buy our appliances, tools, TV's and entertainment centers, lawn and gardening equipment et.... with Sears. We also used their automotive centers for tires, batteries and oil changes.

Several years ago Sears started cutting corners on customer service. Eventually I had purchased a camera and the extended warranty along with it. That camera quit working and I took it in. Sears refused to honor the warranty insisting I damaged it.

Things hadn't been great with Sears customer service and this pushed me over the edge. For the cost of that Camera, not to mention the lousy way they treated me, they lost ALL my business.

Ordinarily the loss of one customer is no big deal. But Sears had repeated the poor customer service mistake until they've become a non-factor in the retail world.

 

[colatown]

Sears went downhill after they purchased all the K Mart stores.

Actually K Mart acquired Sears which was in bankruptcy at the time .

 

[pedro47]

Sears is closing four (4) K Mart stores and one (1) Sears store in Virginia.

 

[theo]

IMnsHO, Sears seems to have worked hard to commit suicide in recent years, poor customer service having apparently become something of a specialization.

....and Sears' CEO blames the media for its' downfall?

 

[Passepartout]

I don't think that media is the problem, either with Sears in particular, or retail in general. It's US. Busily tapping away on our devices. Have an opinion? Share it with like minded people on Facebook. Feel like rating, advising, griping, there's TUG, Trip Advisor, instagram, and a host of other sites. Find that you need anything from appliances to groceries, to cars, to cute little dust catchers, courtesy of Amazon or a bazillion other online retailers, a couple of clicks, and it appears on your porch in mere hours- to tomorrow.

The media isn't causing the death of our malls, and Sears, and Target, yes, even Wal-Mart is feeling it. The internet is changing the world. And automation and artificial intelligence are it's offspring.

Jim

 

[Phydeaux]

One thing is for certain, if anyone had any doubt about the imminent demise of Sears, that should be gone!!

After reading how the CEO of Sears places blame on media, and shareholders still haven't axed him after doing so, this company deserves to go belly up. It's a poor craftsman that blames his tools...

 

[pedro47]

The media is not blame for Sears demise. It is the internet. Why leave your home and shop at Sears. When you came go on the internet and shop and your package is delivered the very next date.

 

[Phydeaux]

The media is not blame for Sears demise. It is the internet. Why leave your home and shop at Sears. When you came go on the internet and shop and your package is delivered the very next date.

You're painting with a rather broad brush, given the fact that there are many existing brick & mortar stores that compete with Sears, and they are not going out of business. At least not now, and projecting the future is irrelevant to this discussion.

I won't disagree that the web has changed the market for brick & mortar business, but lumping all of them together is also incorrect.

No, Sears has only themselves to blame for their imminent demise. First, they failed to sack the CEO that is busy looking for excuses and placing blame, and second they haven't kept up with the times. No different than Eastman Kodak, Blockbuster, Polaroid, Xerox, Yahoo and so on.

 

[dominidude]

http://money.cnn.com/2017/06/13/news/companies/retail-bankruptcies/index.html

The blood bath continues.

 

[Talent312]

Their sales practices and merchandise never came into the 21st century.
They rested on their legacy and never dealt with changes in retailing.
Years ago, I compared products at Home Depo and Best Buy to Sears...
Why pay over $100 more at Sears?

.

 

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The Rise and Fall of Sears
By Vicki Howard/ History/ SmithsonianMag.com


"How the retail store that taught America how to shop navigated more than a century of economic and cultural change.

"The lifetime of Sears has spanned and embodied the rise of modern American consumer culture. The 130-year-old mass merchandiser that was once the largest retailer in the United States is part of the fabric of American society.


From its start as a 19th-century mail-order firm, to its heyday on Main Street and in suburban malls, and from its late 20th-century reorientation toward credit and financial products to its attempted return to its original retail identity, Sears has mirrored the ups and downs of the American economy. It was a distribution arm of industrial America. It drove the suburbanizing wedge of postwar shopping malls. It helped atomize the industrial economy through manufacturer outsourcing in the 1970s and 1980s. It played a key role in the diffusion of mass consumer culture and commercial values. For better and for worse, Sears is a symbol of American capitalism...."

Richard

 

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The Incredible Shrinking Sears: How a Financial Wizard Took Over a Giant of American Retailing, and Presided Over Its Epic Decline
By Julie Creswell/ Business Day/ The New York Times/ nytimes.com

"Imagine a retailer that began by specializing in just one product, then grew into a mammoth that redefined the American shopping experience.

Among its innovations: No matter where you lived, it shipped your order directly to you, whether you were looking for cast-iron cookware, a mandolin, the newest technological marvel, or the latest in petticoats.

Amazon, right? Actually, it was Sears — a century ago.

The brainchild of a pocket-watch salesman, Sears navigated retailing through the end of the stagecoach era, the rise (and fall) of downtown department stores and the malling of suburban America. Recently it has been battling to stay relevant with the advance of online retailers — like Amazon.

For many, the story of Sears is a reflection of the carnage occurring throughout much of retail right now. In recent days, the stocks of J.C. Penney, Macy’s and Dillard’s all tumbled after they reported another round of quarterly sales declines. Some analysts expect Sears to report a third consecutive double-digit decline in same-store sales in the second quarter.

But what may ultimately lead to the collapse of the once-great retailer is a dose of Wall Street financial engineering.

Under the direction of the hedge-fund moneyman Edward S. Lampert, Sears has borrowed to the hilt. Many of its most valuable assets have been sold off. Its stores have been starved for cash and attention. An early shift in the organizational structure designed to create competition among store departments — a strategy used by some hedge funds to allocate company resources — instead led to infighting.

It was all done in search of a profit that, for Mr. Lampert and his investors, has not materialized...."

Alvah C. Roebuck, left, and Richard W. Sears, the founders of the company. Credit United Press International


Richard

 

[jehb2]

I go to Sears occasionally to return my Landsend.com purchases. Sometimes I have to make 2 laps around the entire second floor to find a salesperson. I might see 1-2 customers. Now this is usually before noon on a weekday but it's eerie. When I walk through other department stores in the mall at the same time I see plenty of people. I don't know how they hang on.

When I was a kid all my back-to-school cloths, play cloths, and summer cloths were purchased at Sears. I am not a fashion person by any means, but their women's clothing is hideous and not well priced. I shop a lot at Kohls.

For the past many years I have been buying my household appliances at Home Depot and Lowes.

In my opinion Sears sucks because the store is depressing, the cloths are boring and over priced, and I get a better deal on name brand appliances at the big box home improvement stores. Oh, and I do get almost all my kids cloths online.

 

[vacationhopeful]

Sears went to the Malls 50+ years ... K-Mart was in the neighborhood strip shopping centers. I seldom shopped in Malls 20-25 years ago ... like never in the past 15+ years ... not even to attended multi-movie theaters.

 

[bizaro86]

One thing is for certain, if anyone had any doubt about the imminent demise of Sears, that should be gone!!

After reading how the CEO of Sears places blame on media, and shareholders still haven't axed him after doing so, this company deserves to go belly up. It's a poor craftsman that blames his tools...

The shareholders can't fire the CEO, he and his hedge fund are by far the largest holder.

 

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Sears CEO Doing the Dumbest Thing on Wall Street This Black Friday
By Kinsey Grant/ The Street/ thestreet.com

"Nothing personal, Mr. Edward Lampert, but you've ridden Sears stock straight down the tubes. It's been a tough go for retail, but many of Sears' competitors have staged a comeback recently. Why, then, hasn't Sears?

How many times does Wall Street have to spell it out? Sears Holdings Corp. (SHLD - Get Report) is a dying retailer, and its long-time CEO and major shareholder Eddie Lampert isn't helping matters.

Sears continues to notch mind-blowing losses, hemorrhage precious cash and is expected to report its third-straight double-digit decline in same-store sales in the holiday quarter. A disturbing holiday season would come even as the U.S. economy is humming again, which has sent people off to buy appliances at Sears rival Home Depot (HD - Get Report) .

The mood on Wall Street around Sears prior to the holidays has been glum. And rightfully so.

In a filing earlier this month, Sears disclosed that it had borrowed another $60 million from affiliates of Lampert. The company had already blown through a loan of $100 million that Lampert said he and his cohorts would offer Sears in October...."

Eddie Lampert, BusinessWeek cover in 2004 (yes, this is real).


How times change.

Richard

 

[DaveNV]

I used to shop at my local Sears store frequently, especially for business clothing. But their inventory started being less and less business "current," and more and more "blue collar," then into "outdoor," and finally into "young men's sportswear." So I started buying my business clothing elsewhere. (JC Penney is partially good for that, especially their online shopping options.) We have a Penney's at the opposite end of the same mall where Sears was located. Over time, I went into Sears less and less, having found other sources for things like tools and tires. There was little reason to go into Sears unless I was looking for something specific that I couldn't find elsewhere. Eventually, I just stopped going into Sears at all.

A few years later I went into the Sears store and found it a ghost town. Shelves were barely stocked at all, and there were only a few customers. Two employees were having a personal argument at the check out register, complaining long and loud about how bad management was, their work schedules were terrible, and on and on. I felt I was eavesdropping on something I didn't need to hear, and it was obvious other customers were feeling a bit uncomfortable as well. I interrupted these two employees, and suggested maybe they'd prefer to have their discussion behind closed doors. I was given a very rude response, with them basically telling me to mind my own business.

And I have. I put down my purchases and walked out the door. I haven't shopped at Sears since. When they announced the local store was closing, it came as little surprise. I could only wonder why it took so long.

I think any brick-and-mortar business to remain viable in this day and age of online options, with free shipping and quick door-to-door delivery, needs to be competitive against ALL their other potential competitors - whether it's retail, overnight online, or even long-term mail order stuff from overseas. Sears was/is not a company I'd ever consider for shopping online, because they haven't promoted their online presence. I still think of them as my parents' department store. And apparently so do a lot of people: When the local store closed, nobody even noticed.

Dave

 

[WinniWoman]

I always liked Sears. Just 3-4 years ago I got all our kitchen appliances on Sears.com. They had all the recommended Consumer Reports Models listed and the reviews right next to each model. I could not get all 3 of the recommended appliances I wanted at a single store except for Sears and they had the best prices. Plus I was able to haggle with the on-line representative. Best shopping experience I had when doing our kitchen remodeling.

I also still have a pair of hiking shoes I got for $30 at Sears many moons ago- and I am talkign something like 15 years or so. I climbed Mt. Mansfield with them and I still refuse to give them up.

 

[Talent312]

It's ironic that Sears began it's life as an e-tailer of sorts, a mail-order store.
For a while, Jacques Penney also relied heavily on its catalog.
They both failed to appreciate a demand for virtual shopping.
Amazon tapped into that. Everyone else is playing catch-up.
.