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Sears reports $748M net loss [pdf]

88 points by grizzles 10y ago

jbandela1 10y ago
When I see articles about how sears is now, I always think of this http://www.metafilter.com/62394/The-Record-Industrys-Decline#1742245 http://www.metafilter.com/62394/The-Record-Industrys-Decline... Sears could have been what Amazon is today.
- WestCoastJustin 10y ago
  This is an incredible historical account. Thanks for posting the link.
- massysett 10y ago
  20/20 hindsight and all. Amazon still has practically no retail footprint. Sears' big business was bricks-and-mortar retailing, not catalog retailing. The catalog was shrinking and dying. Under the circumstances it was perfectly reasonable for Sears to shut down the catalog and focus on stores. Also, Amazon did not start out being anything like what it is today. For years it was just books. I remember as they added departments, they would tack an extra tab onto the homepage--"CDs", "Video", etc. So what was Sears going to do? Instantly transport the entirety of a dying catalog business to a non-existing consumer Internet? That wouldn't parallel Amazon at all. Not to mention that Sears did not have access to a bunch of giddy investors who were willing to pump in money despite no sign of profitability. Only under a superficial analysis could Sears have been what Amazon is today.
  - tomhschmidt 10y ago
    Many other large brick-and-mortar retailers have spun up relatively successful eComm businesses (Target, Walmart, Macy's). While those aren't to the scale of Amazon, I really don't think this is an excuse.
    - massysett 10y ago
      > While those aren't to the scale of Amazon Since OP's point was > Sears could have been what Amazon is today it's quite relevant that Target, Walmart, Macy's are not nearly to the scale of Amazon.
      - mrmirz 10y ago
        Similarly (and probably off topic), Amazon is not nearly to the scale of Walmart when you look at overall sales. Walmart's overall revenue is about 5x. It may seem like Walmart is following the footsteps of Sears, but they are not out of the game yet. They need to face the innovator's dilemma head on and do it quickly because the broader issue is their e-commerce growth rate is declining instead of accelerating and the way people shop is fundamentally changing. They need to be dominant in e-commerce to be a dominant retailer in the future. Walmart is better positioned than anyone to take on Amazon online. Their massive distribution footprint is a huge asset they are not leveraging. They need to morph into a logistics company and announce an all-encompassing same-day delivery service. They also need to completely re-haul their web/mobile UX. I would gladly buy from Walmart. Amazon is just a lot easier right now. In the end, Amazon is not all that differentiated and if Walmart had some strong technological leadership, they could certainly close the e-commerce gap.
        goldenkek 10y ago
        walmart has a 2 day delivery program similar to prime for 40 dollars a year. they need to advertise better..no one knows (you didnt did you?)
      - RijilV 10y ago
        Quiet ironically to this thread, Target for years was run by Amazon.com. Wasn't until 2011 IIRC that they went on their own. Similarly ToyRUs, marks and Spencer's also were at one point or another run by Amazon.
        takingflac 10y ago
  - abritinthebay 10y ago
    > Sears' big business was bricks-and-mortar retailing, not catalog retailing. Hardly - it was the logistics they had in place to power both of those. > The catalog was shrinking and dying. So was brick-and-mortar. Just not quite as fast. Jumping ship from the Titanic to the Exxon Valdez is not a long term strategy.
  - redditmigrant 10y ago
    I don't think any transformation like that happens overnight, but you have to have a point of view on what the future will look like and then turn the ship towards it. A good example is Netflix. They did DVDs, won that battle but then turned a multi-billion dollar public company towards streaming. It wasn't easy, but the leadership was clear about what the future was and it reflected in the investments they made. Some other company or a combination of other companies would have been Netflix today if Netflix had failed to turn towards streaming.
- somedudetbh 10y ago
  Ha I just thought/posted the same thing!
- pbreit 10y ago
  "could" is used 100 times on that page.
- forgetsusername 10y ago
  >Sears could have been what Amazon is today. How many companies that existed pre-Sears could have been what Sears was, but weren't? This is business.
aczerepinski 10y ago
You know things are bad when this is the type of news that boosts your stock price by 5%.
wnevets 10y ago
I kinda forgot they were still in business. What does Sears offer that no one else does?
- madengr 10y ago
  Maybe Craftsman hand tools, but that's it. Those are well made, and the socket wrenches are lifetime warrantied (they will fail, but they will just give you a new one). Craftsman power tools are garbage; might as well get them at Harbor Freight. We always bought appliances from sears, but recently the refrigerator was from Lowes, and the microwave and oven from Amazon. They don't stock appliances (very long waits for refrigerators) and the sales people can be horrible. The fridge we bought recently sight unseen, online. The checkout process at Sears is fully fucked up. A convoluted connection of iPads, credit card swipers, and ancient IBM registers. Best Buy also sucks, so it's not like they have much local competition. I swore I'd never buy a large appliance from Amazon, but the in-wall oven was just fine, and I installed it no problem. If you can do your own appliance installations, I suppose online is the way to go.
  - maxerickson 10y ago
    You can buy Craftsman at other stores: http://www.acehardware.com/category/index.jsp?categoryId=21503036 http://www.acehardware.com/category/index.jsp?categoryId=215... They also stopped going out of their way to honor the warranty.
  - ssharp 10y ago
    Sears is a jack of all trades store that doesn't have much value these days. Before Home Depot and Lowes were everywhere, Sears was a good option for appliances, lawn care, power tools, etc. They were good for fitness equipment before Dicks. They were good for electronics before Best Buy. I suspect a place like Kohls took over their clothing audience as well. Of course the internet didn't help them much either. I'm sure someone will gladly buy up Craftsmen when it goes up for sale but I agree with you that it's their only exclusive asset that sets them apart.
    - 10y ago
dharmon 10y ago
The Buffett Curse: Any comparisons to Warren Buffett will immediately result in disastrous investment performance. In this case, hedge fund manager Eddie Lampert took control of Sears about 10 years ago, merged it with K-Mart, and 3 years ago installed himself as chairman and CEO. He's been selling off assets left and right to keep it afloat (real estate, Lands End, etc.) Prior to this he had been compared to and called "the new Buffett" due to similar investment styles (if you squint real hard). Since then Sears has lost over 90% of its market value. Yikes. For another example, see Bill Ackman, who has been absolutely slaughtered, and seems to be asking for more. It started almost immediately after Fortune put him on the cover with the slug line "Baby Buffett".
- conistonwater 10y ago
  Wasn't this also a case of pretty spectacular mismanagement on CEO's part? I remember reading stuff like this: https://www.bloomberg.com/news/articles/2013-07-11/at-sears-eddie-lamperts-warring-divisions-model-adds-to-the-troubles https://www.bloomberg.com/news/articles/2013-07-11/at-sears-..., it was rather fascinating. It seems from that that it wasn't just a case of overly rosy expectations.
  - dharmon 10y ago
    Yeah, definitely. Smart investors with no management or operations experience install capable people as CEO, as Buffett has done on several occasions. Arrogant investors seem to think, "running a business can't be that hard..."
    - huherto 10y ago
      > Arrogant investors seem to think, "running a business can't be that hard..." Running a country can't be that hard...oh my god.
  - 2sk21 10y ago
    Indeed - Eddie Lampert seems to be very strongly driven by ideology instead of business.
grizzles 10y ago
If I had a crystal ball and could look into Amazon and Sears's respective C-Suites, this is what I imagine I'd see: Amazon Manager to subordinate: How is the progress going on our new jet and drone fleets? Sears Manager to subordinate: Why the HELL aren't our website sales up?!?!
- 1_2__3 10y ago
  All you're describing here is how effective Amazon's marketing department is.
  - grizzles 10y ago
    I don't think they bought a fleet of jets for marketing. My point is about their respective cultures. Amazon's culture is just flat out better. Amazon just entered the retail grocery business. When they did it, they looked at the process and noticed that in the existing process everyone was double handling merchandise. Once when they select it, and once when they checkout. So Amazon decided to make it a single handling process, making life a bunch easier for consumers. That also decreases purchase friction, which is great for Amazon. That thought process illustrates why Amazon is the leader and will continue to humble it's rivals. It will take a huge culture change, and a probable industry consolidation before the likes of Sears will become competitive again.
    - JoeAltmaier 10y ago
      Underestimating on the grocery thing. Handle each can of beans taking from the shelf to the cart from cart to checkout belt from belt to bag (ok they help with this one) from bag to car (several at once) from car to counter in pantry from bag to shelf and later from pantry shelf to kitchen counter from kitchen counter to trash/recycle bin from bin to curb Taking just one of those out is not much benefit, marginally?
    - nharada 10y ago
      > I don't think they bought a fleet of jets for marketing. I think their point was that the reason you think Amazon's culture and competency are so strong is due to marketing and isn't the truth. I have no idea if this is actually true or not though.
electic 10y ago
Sears mostly has a big marketing issue. I almost never see them online. No online advertising. No social media. Nothing to show they are at all connected to the real world. My guess is they are still doing TV adverts and I think a lot of people do not watch traditional TV anymore and it is costing them mind share.
- ChuckMcM 10y ago
  They are waiting for you to come to the mall so they can engage in personal face to face selling.
brilliantcode 10y ago
Recently shopped at Sears in Vancouver. Zero to no customer activity. No good deals but also virtually no one helping me check the fuck out of there. Waited hours only to see the fucking cashier or staff chatting it up with each other with a line queue forming. Same experience in The Bay. I think these traditional marts are on their way out. I have zero sympathy, kill this fucking monstrosity.
- twblalock 10y ago
  Shopping at Sears was a depressing experience for years. They really let the stores fall apart, employees clearly didn't care, the products were crap, etc. I think they made most of their money off Craftsman tools and Kenmore appliances.
  - GunboatDiplomat 10y ago
    Think Sears is bad, try KMart.
    - douche 10y ago
      It's like something out of Mad Max. I had the misfortune of popping into one on the way to the airport for a vacation, after I realized I hadn't brought a watch. I swear there were tumbleweeds blowing down the aisles. While I was waiting to check out, I watched a toothless young lady harangue the cashier into selling her several sets of Boston Bruins towels that were clearly marked as $19.99 for $5 apiece. The cashier brought her manager over to doublecheck, shoulders were shrugged, and zero fucks were given. As I was leaving, a befuddled elderly lady was trying to return items she'd bought at a TJ Maxx. There was no TJ Maxx in this strip mall, nor within five miles. I got the hell out of there with my cheap wristwatch and resolved never to return.
      - countingteeth 10y ago
        The most anachronistic part of this comment is the wristwatch.
ChuckMcM 10y ago
disclaimer (both my sister and my mom worked for sears at one time) I think Sears has lost its way because a new generation of shoppers don't see Sears as vital. Back in the late 1800' when it was founded the idea that you could look in a catalog and order something, only to pick it up at the store a week later was nothing short of a revolution. And as a result Sears because exquisitely good at logistics. For decades the ability to move product where it needed to be, when it needed to be there, at scale allowed Sears department stores to dominate the retail market. It was rare to go to Sear's and discover what you wanted was out of stock, and even then they could tell you to either come back in 1 or 2 days to pick it up, or they would deliver it to you. That service, that experience, was enabled and powered by logistics. Old companies can get senile though and Sears did. They forgot they were a logistics company and started trying to compete with Internet retailers as a retail company. If instead they has offered white label logistics service for internet merchants Amazon wouldn't be Amazon, instead it would be a buying consortium that was shipping everything through to consumers through Sear's logistics infrastructure. Instead you've got Amazon of today re-creating what Sear's had 20 years ago but using more advanced technology.
- ikeboy 10y ago
  Funnily enough, we sell a lot on Amazon using sears for fulfilment (recently about 50k worth a month). I wish they'd partner officially, it would make stuff a lot easier. But even with the extra hassle of placing orders manually, they can offer better prices than Amazon on many items with enough room to make money.
- mbesto 10y ago
  > They forgot they were a logistics company Sears was the Amazon of 80's. Peering through the lens of time, the concept of a mail order catalog was no different from the convenience of today's Amazon e-commerce experience. They are both points on an evolutionary timeline of the retail distribution experience. Sears disrupted retail, just like Amazon has disrupted Sears. What's interesting about companies like today's Amazon is that they are scared shitless they'll end up becoming another Sears and eventually dead in the water, so they are constantly investing their own profits into re-inventing themselves (see Amazon Go and drone delivery for example). And hence why the PE ratios of these companies (Amazon, Google, Apple, etc) are catastrophically high.
somedudetbh 10y ago
Every time I read something about Sears troubles, it makes me remember this metafilter comment from 2007: http://www.metafilter.com/62394/The-Record-Industrys-Decline#1742245 http://www.metafilter.com/62394/The-Record-Industrys-Decline... Excerpt: "...In 1984 [Sears] starts a joint venture with IBM called Prodigy, an online computer service, sort of a prototype AOL. In 1985, Sears launches a new major credit card, the Discover card. For the next eight years, the only credit card you can use at Sears is Discover. At this time, the early 80's Sears is the largest retailer in the U.S. By 1993, the 100th anniversary of the Sears Catalog, Sears had built up considerable goodwill in the mind of consumers. They weren't the lowest price, but they had what you needed at good prices and the service was second to none. […] This is 1993. In quite possibly the greatest example of corporate shortsightedness, Sears shut down it's mail-order business in a cost cutting measure. It spins off Allstate that same year, and soon dumps Dean Witter and Coldwell Banker. In 1993, Sears had the most extensive and sophisticated mail-order retail operation on the planet and they closed it. Two years later, Amazon.com launched, and was soon selling everything that sears sold through it's catalog. By the late-90's Walmart's push of low-cost China imports killed Sears retailing. Online banking takes off. Credit card use surges as mail order and retail purchases are shifted online. Sears had its own computer network in 1993. They had access to IBM, they should have understood the power of the internet. All they had to do was shift the catalog online instead of killing it off, promising in store returns and the same Sears satisfaction guaranteed. Discover could have been the credit card of choice for security and protection online. Dean Witter could have been what Schwab, E-Trade and Ameritrade became. Back in the mid-late 90s when many people were hesitant to use credit cards online, Sears could have been a familiar face online."
mmanfrin 10y ago
They raced to the bottom with their hallowed store brands, cut corners to make margins and in the end shattered the value of the name of appliances like Kenmore or tools like Craftsman. If you've built a brand on the idea of durability and reliability, and then build shoddy products that coast on the reputation, that reputation goes away and leaves you with a brand that no one wants to buy. I've been looking at a new fridge, and I'd consider a Chinese Haier over a Sears Kenmore, ceteris paribus. It used to be that Sears was mighty because of the catalog; then they were mighty because of logistics; then they were mighty because of the iron-clad house brands. Now Amazon is the new catalog, Walmart beats them on logistics, and their brands are mud. Sears has nothing. You'll see a Sears bankruptcy within 5 years.
- roflchoppa 10y ago
  I picked up some craftsman metric/SAE box and open's the other day from the discount section, the build quality is not bad at all. I would not compare it to Snap-On, but a whole other tier than that of HF.
  - mrits 10y ago
    That was my first time to ever read that. I lost it at the eye patch.
  - douche 10y ago
    You really have to be careful these days, though. Sometimes you find stuff that is close to the old Craftsman quality, other times it is much shoddier. The consistency isn't there, in my experience.
  - 91bananas 10y ago
    Recently I've given up on craftsman all together. Harbor freight owns up to being Chinese junk, but still gives a life time guarantee on and hand tools now. So if they're half the cost of craftsman but break and replace the same, why buy their name brand Chinese junk when I can buy generic stuff from probably the same factory?
kevin_thibedeau 10y ago
They need to streamline the stupid checkout process where you get hammered with incessant questions and wait for 3-feet of receipts to print out.
- PhantomGremlin 10y ago
  incessant questions You mean like "do you want to apply for a credit card?"? There's a reason for that. The associate gets $2 for every store credit card and $4 for every bank credit card sign-up. It's a big deal to a kid making $10/hr. But it certainly doesn't help the overall experience for those people who don't want another credit card.
  - marktangotango 10y ago
    I'm glad they get a commission on those. Unlike the poor folks at Best Buy who get nothing for upselling the worthless warranty extensions. I last asked a few years ago so this may have changed.
sliken 10y ago
When sears killed their lifetime guarantee on wrenches, the local competition put an aquarium in their tool section. Throw in a "useless" sears wrench and you could pick up a free replacement with a life time guarantee. Seemed pretty effective, the clerk claimed they had to empty the aquarium every week or so for the first year.
kirykl 10y ago
Anecdote: Recently I had a sears gift card number but not the actual gift card. Tried to buy vacuum in store with just the number not the card, and they said no way, even said they should call corporate security to investigate my scam. I went online to sears.com in the store, paid for my vacuum with the gift card number and selected in store pickup. Left with the vacuum.
- kevinstubbs 10y ago
  For fun, you could buy a few more cards like that and see what kind of mess happens. Like what Steve Wozniak's does with his $2 bills (http://archive.woz.org/letters/general/78.html http://archive.woz.org/letters/general/78.html).
  - nodesocket 10y ago
    If you showed up to Cheesecake Factory and for the bill wrote your credit card number, expiration, and CVV on a napkin, do you think they would accept that? In all seriousness, how was that fun for you?
    - kevinstubbs 10y ago
      Straw man argument? Doing that doesn't sound fun at all, and is totally different than what OP was talking about in Sears. Trying to use the giftcard number to see how high their staff will escalate to deal with this "scam" is hilarious, otoh.
- otterley 10y ago
  The difference is that when you place the order on the Internet, Sears can delay delivery if they discover fraud, and since they know the item is going, they stand a higher change of recovering from the fraudster later. If the fraud occurs in-store, they'll be much less likely to recover if they discover it after the fact.
jimmydddd 10y ago
And they phased out their catalog. If they had waited a few years, they could have put it online and been Amazon. Reminds me of a smaller chain called Service Merchandise. You could order from an electronic kiosk in the store, and your product would come out on a conveyor belt a few minutes later. If they had hung in a bit longer, they could have phased the kiosk ordering to the internet.
- smelendez 10y ago
  Astonishingly: https://www.servicemerchandise.com https://www.servicemerchandise.com
- GFK_of_xmaspast 10y ago
  > a few minutes later If you were lucky.
WhitneyLand 10y ago
I didn't know for sure they were still in business. Who shops at Sears? For what reason?
RijilV 10y ago
Such a shame really. I get how they were blind to it, but sears ran a successful mail order business for decades before the Internet was widely available. What a missed opportunity, usurped by a clever computer tech from the fincial industry. Even when it was clear books were working, sears sat on the sidelines with their print catalog oblivious to the online world.
okonomiyaki3000 10y ago
This is genius! They won't have to pay taxes for the next 20 years! Brilliant!
rbanffy 10y ago
Isn't this that CEO who actually believes in Ayn Rand?
- seren 10y ago
  He is. I remember reading that article some times ago : https://www.bloomberg.com/news/articles/2013-07-11/at-sears-eddie-lamperts-warring-divisions-model-adds-to-the-troubles https://www.bloomberg.com/news/articles/2013-07-11/at-sears-... It has been posted a few time to HN.
- forgetsusername 10y ago
  >believes in Ayn Rand? Ayn Rand is a real thing.
desireco42 10y ago
It breaks my heart what this guy Eddie Lampert did to this company. I used to work as a consultant for Sears and have fond memories of my time then. Sears was, for as long as I know them, been mismanaged by their executives. They would spend insane money to hire consultants and developers, only to change direction after less then a year and fire everyone.

88 points by grizzles 10y ago

When I see articles about how sears is now, I always think of this http://www.metafilter.com/62394/The-Record-Industrys-Decline#1742245 http://www.metafilter.com/62394/The-Record-Industrys-Decline... Sears could have been what Amazon is today.

WestCoastJustin 10y ago
This is an incredible historical account. Thanks for posting the link.
massysett 10y ago
20/20 hindsight and all. Amazon still has practically no retail footprint. Sears' big business was bricks-and-mortar retailing, not catalog retailing. The catalog was shrinking and dying. Under the circumstances it was perfectly reasonable for Sears to shut down the catalog and focus on stores. Also, Amazon did not start out being anything like what it is today. For years it was just books. I remember as they added departments, they would tack an extra tab onto the homepage--"CDs", "Video", etc. So what was Sears going to do? Instantly transport the entirety of a dying catalog business to a non-existing consumer Internet? That wouldn't parallel Amazon at all. Not to mention that Sears did not have access to a bunch of giddy investors who were willing to pump in money despite no sign of profitability. Only under a superficial analysis could Sears have been what Amazon is today.
- tomhschmidt 10y ago
  Many other large brick-and-mortar retailers have spun up relatively successful eComm businesses (Target, Walmart, Macy's). While those aren't to the scale of Amazon, I really don't think this is an excuse.
  - massysett 10y ago
    > While those aren't to the scale of Amazon Since OP's point was > Sears could have been what Amazon is today it's quite relevant that Target, Walmart, Macy's are not nearly to the scale of Amazon.
    - mrmirz 10y ago
      Similarly (and probably off topic), Amazon is not nearly to the scale of Walmart when you look at overall sales. Walmart's overall revenue is about 5x. It may seem like Walmart is following the footsteps of Sears, but they are not out of the game yet. They need to face the innovator's dilemma head on and do it quickly because the broader issue is their e-commerce growth rate is declining instead of accelerating and the way people shop is fundamentally changing. They need to be dominant in e-commerce to be a dominant retailer in the future. Walmart is better positioned than anyone to take on Amazon online. Their massive distribution footprint is a huge asset they are not leveraging. They need to morph into a logistics company and announce an all-encompassing same-day delivery service. They also need to completely re-haul their web/mobile UX. I would gladly buy from Walmart. Amazon is just a lot easier right now. In the end, Amazon is not all that differentiated and if Walmart had some strong technological leadership, they could certainly close the e-commerce gap.
      - goldenkek 10y ago
        walmart has a 2 day delivery program similar to prime for 40 dollars a year. they need to advertise better..no one knows (you didnt did you?)
    - RijilV 10y ago
      Quiet ironically to this thread, Target for years was run by Amazon.com. Wasn't until 2011 IIRC that they went on their own. Similarly ToyRUs, marks and Spencer's also were at one point or another run by Amazon.
      - takingflac 10y ago
- abritinthebay 10y ago
  > Sears' big business was bricks-and-mortar retailing, not catalog retailing. Hardly - it was the logistics they had in place to power both of those. > The catalog was shrinking and dying. So was brick-and-mortar. Just not quite as fast. Jumping ship from the Titanic to the Exxon Valdez is not a long term strategy.
- redditmigrant 10y ago
  I don't think any transformation like that happens overnight, but you have to have a point of view on what the future will look like and then turn the ship towards it. A good example is Netflix. They did DVDs, won that battle but then turned a multi-billion dollar public company towards streaming. It wasn't easy, but the leadership was clear about what the future was and it reflected in the investments they made. Some other company or a combination of other companies would have been Netflix today if Netflix had failed to turn towards streaming.
somedudetbh 10y ago
Ha I just thought/posted the same thing!
pbreit 10y ago
"could" is used 100 times on that page.
forgetsusername 10y ago
>Sears could have been what Amazon is today. How many companies that existed pre-Sears could have been what Sears was, but weren't? This is business.

aczerepinski 10y ago

You know things are bad when this is the type of news that boosts your stock price by 5%.

wnevets 10y ago

I kinda forgot they were still in business. What does Sears offer that no one else does?

madengr 10y ago
Maybe Craftsman hand tools, but that's it. Those are well made, and the socket wrenches are lifetime warrantied (they will fail, but they will just give you a new one). Craftsman power tools are garbage; might as well get them at Harbor Freight. We always bought appliances from sears, but recently the refrigerator was from Lowes, and the microwave and oven from Amazon. They don't stock appliances (very long waits for refrigerators) and the sales people can be horrible. The fridge we bought recently sight unseen, online. The checkout process at Sears is fully fucked up. A convoluted connection of iPads, credit card swipers, and ancient IBM registers. Best Buy also sucks, so it's not like they have much local competition. I swore I'd never buy a large appliance from Amazon, but the in-wall oven was just fine, and I installed it no problem. If you can do your own appliance installations, I suppose online is the way to go.
- maxerickson 10y ago
  You can buy Craftsman at other stores: http://www.acehardware.com/category/index.jsp?categoryId=21503036 http://www.acehardware.com/category/index.jsp?categoryId=215... They also stopped going out of their way to honor the warranty.
- ssharp 10y ago
  Sears is a jack of all trades store that doesn't have much value these days. Before Home Depot and Lowes were everywhere, Sears was a good option for appliances, lawn care, power tools, etc. They were good for fitness equipment before Dicks. They were good for electronics before Best Buy. I suspect a place like Kohls took over their clothing audience as well. Of course the internet didn't help them much either. I'm sure someone will gladly buy up Craftsmen when it goes up for sale but I agree with you that it's their only exclusive asset that sets them apart.
  - 10y ago

dharmon 10y ago

The Buffett Curse: Any comparisons to Warren Buffett will immediately result in disastrous investment performance. In this case, hedge fund manager Eddie Lampert took control of Sears about 10 years ago, merged it with K-Mart, and 3 years ago installed himself as chairman and CEO. He's been selling off assets left and right to keep it afloat (real estate, Lands End, etc.) Prior to this he had been compared to and called "the new Buffett" due to similar investment styles (if you squint real hard). Since then Sears has lost over 90% of its market value. Yikes. For another example, see Bill Ackman, who has been absolutely slaughtered, and seems to be asking for more. It started almost immediately after Fortune put him on the cover with the slug line "Baby Buffett".

conistonwater 10y ago
Wasn't this also a case of pretty spectacular mismanagement on CEO's part? I remember reading stuff like this: https://www.bloomberg.com/news/articles/2013-07-11/at-sears-eddie-lamperts-warring-divisions-model-adds-to-the-troubles https://www.bloomberg.com/news/articles/2013-07-11/at-sears-..., it was rather fascinating. It seems from that that it wasn't just a case of overly rosy expectations.
- dharmon 10y ago
  Yeah, definitely. Smart investors with no management or operations experience install capable people as CEO, as Buffett has done on several occasions. Arrogant investors seem to think, "running a business can't be that hard..."
  - huherto 10y ago
    > Arrogant investors seem to think, "running a business can't be that hard..." Running a country can't be that hard...oh my god.
- 2sk21 10y ago
  Indeed - Eddie Lampert seems to be very strongly driven by ideology instead of business.

grizzles 10y ago

If I had a crystal ball and could look into Amazon and Sears's respective C-Suites, this is what I imagine I'd see: Amazon Manager to subordinate: How is the progress going on our new jet and drone fleets? Sears Manager to subordinate: Why the HELL aren't our website sales up?!?!

1_2__3 10y ago
All you're describing here is how effective Amazon's marketing department is.
- grizzles 10y ago
  I don't think they bought a fleet of jets for marketing. My point is about their respective cultures. Amazon's culture is just flat out better. Amazon just entered the retail grocery business. When they did it, they looked at the process and noticed that in the existing process everyone was double handling merchandise. Once when they select it, and once when they checkout. So Amazon decided to make it a single handling process, making life a bunch easier for consumers. That also decreases purchase friction, which is great for Amazon. That thought process illustrates why Amazon is the leader and will continue to humble it's rivals. It will take a huge culture change, and a probable industry consolidation before the likes of Sears will become competitive again.
  - JoeAltmaier 10y ago
    Underestimating on the grocery thing. Handle each can of beans taking from the shelf to the cart from cart to checkout belt from belt to bag (ok they help with this one) from bag to car (several at once) from car to counter in pantry from bag to shelf and later from pantry shelf to kitchen counter from kitchen counter to trash/recycle bin from bin to curb Taking just one of those out is not much benefit, marginally?
  - nharada 10y ago
    > I don't think they bought a fleet of jets for marketing. I think their point was that the reason you think Amazon's culture and competency are so strong is due to marketing and isn't the truth. I have no idea if this is actually true or not though.

electic 10y ago

Sears mostly has a big marketing issue. I almost never see them online. No online advertising. No social media. Nothing to show they are at all connected to the real world. My guess is they are still doing TV adverts and I think a lot of people do not watch traditional TV anymore and it is costing them mind share.

ChuckMcM 10y ago
They are waiting for you to come to the mall so they can engage in personal face to face selling.

brilliantcode 10y ago

Recently shopped at Sears in Vancouver. Zero to no customer activity. No good deals but also virtually no one helping me check the fuck out of there. Waited hours only to see the fucking cashier or staff chatting it up with each other with a line queue forming. Same experience in The Bay. I think these traditional marts are on their way out. I have zero sympathy, kill this fucking monstrosity.

twblalock 10y ago
Shopping at Sears was a depressing experience for years. They really let the stores fall apart, employees clearly didn't care, the products were crap, etc. I think they made most of their money off Craftsman tools and Kenmore appliances.
- GunboatDiplomat 10y ago
  Think Sears is bad, try KMart.
  - douche 10y ago
    It's like something out of Mad Max. I had the misfortune of popping into one on the way to the airport for a vacation, after I realized I hadn't brought a watch. I swear there were tumbleweeds blowing down the aisles. While I was waiting to check out, I watched a toothless young lady harangue the cashier into selling her several sets of Boston Bruins towels that were clearly marked as $19.99 for $5 apiece. The cashier brought her manager over to doublecheck, shoulders were shrugged, and zero fucks were given. As I was leaving, a befuddled elderly lady was trying to return items she'd bought at a TJ Maxx. There was no TJ Maxx in this strip mall, nor within five miles. I got the hell out of there with my cheap wristwatch and resolved never to return.
    - countingteeth 10y ago
      The most anachronistic part of this comment is the wristwatch.

ChuckMcM 10y ago

disclaimer (both my sister and my mom worked for sears at one time) I think Sears has lost its way because a new generation of shoppers don't see Sears as vital. Back in the late 1800' when it was founded the idea that you could look in a catalog and order something, only to pick it up at the store a week later was nothing short of a revolution. And as a result Sears because exquisitely good at logistics. For decades the ability to move product where it needed to be, when it needed to be there, at scale allowed Sears department stores to dominate the retail market. It was rare to go to Sear's and discover what you wanted was out of stock, and even then they could tell you to either come back in 1 or 2 days to pick it up, or they would deliver it to you. That service, that experience, was enabled and powered by logistics. Old companies can get senile though and Sears did. They forgot they were a logistics company and started trying to compete with Internet retailers as a retail company. If instead they has offered white label logistics service for internet merchants Amazon wouldn't be Amazon, instead it would be a buying consortium that was shipping everything through to consumers through Sear's logistics infrastructure. Instead you've got Amazon of today re-creating what Sear's had 20 years ago but using more advanced technology.

ikeboy 10y ago
Funnily enough, we sell a lot on Amazon using sears for fulfilment (recently about 50k worth a month). I wish they'd partner officially, it would make stuff a lot easier. But even with the extra hassle of placing orders manually, they can offer better prices than Amazon on many items with enough room to make money.
mbesto 10y ago
> They forgot they were a logistics company Sears was the Amazon of 80's. Peering through the lens of time, the concept of a mail order catalog was no different from the convenience of today's Amazon e-commerce experience. They are both points on an evolutionary timeline of the retail distribution experience. Sears disrupted retail, just like Amazon has disrupted Sears. What's interesting about companies like today's Amazon is that they are scared shitless they'll end up becoming another Sears and eventually dead in the water, so they are constantly investing their own profits into re-inventing themselves (see Amazon Go and drone delivery for example). And hence why the PE ratios of these companies (Amazon, Google, Apple, etc) are catastrophically high.

somedudetbh 10y ago

Every time I read something about Sears troubles, it makes me remember this metafilter comment from 2007: http://www.metafilter.com/62394/The-Record-Industrys-Decline#1742245 http://www.metafilter.com/62394/The-Record-Industrys-Decline... Excerpt: "...In 1984 [Sears] starts a joint venture with IBM called Prodigy, an online computer service, sort of a prototype AOL. In 1985, Sears launches a new major credit card, the Discover card. For the next eight years, the only credit card you can use at Sears is Discover. At this time, the early 80's Sears is the largest retailer in the U.S. By 1993, the 100th anniversary of the Sears Catalog, Sears had built up considerable goodwill in the mind of consumers. They weren't the lowest price, but they had what you needed at good prices and the service was second to none. […] This is 1993. In quite possibly the greatest example of corporate shortsightedness, Sears shut down it's mail-order business in a cost cutting measure. It spins off Allstate that same year, and soon dumps Dean Witter and Coldwell Banker. In 1993, Sears had the most extensive and sophisticated mail-order retail operation on the planet and they closed it. Two years later, Amazon.com launched, and was soon selling everything that sears sold through it's catalog. By the late-90's Walmart's push of low-cost China imports killed Sears retailing. Online banking takes off. Credit card use surges as mail order and retail purchases are shifted online. Sears had its own computer network in 1993. They had access to IBM, they should have understood the power of the internet. All they had to do was shift the catalog online instead of killing it off, promising in store returns and the same Sears satisfaction guaranteed. Discover could have been the credit card of choice for security and protection online. Dean Witter could have been what Schwab, E-Trade and Ameritrade became. Back in the mid-late 90s when many people were hesitant to use credit cards online, Sears could have been a familiar face online."

mmanfrin 10y ago

They raced to the bottom with their hallowed store brands, cut corners to make margins and in the end shattered the value of the name of appliances like Kenmore or tools like Craftsman. If you've built a brand on the idea of durability and reliability, and then build shoddy products that coast on the reputation, that reputation goes away and leaves you with a brand that no one wants to buy. I've been looking at a new fridge, and I'd consider a Chinese Haier over a Sears Kenmore, ceteris paribus. It used to be that Sears was mighty because of the catalog; then they were mighty because of logistics; then they were mighty because of the iron-clad house brands. Now Amazon is the new catalog, Walmart beats them on logistics, and their brands are mud. Sears has nothing. You'll see a Sears bankruptcy within 5 years.

roflchoppa 10y ago
I picked up some craftsman metric/SAE box and open's the other day from the discount section, the build quality is not bad at all. I would not compare it to Snap-On, but a whole other tier than that of HF.
- mrits 10y ago
  That was my first time to ever read that. I lost it at the eye patch.
- douche 10y ago
  You really have to be careful these days, though. Sometimes you find stuff that is close to the old Craftsman quality, other times it is much shoddier. The consistency isn't there, in my experience.
- 91bananas 10y ago
  Recently I've given up on craftsman all together. Harbor freight owns up to being Chinese junk, but still gives a life time guarantee on and hand tools now. So if they're half the cost of craftsman but break and replace the same, why buy their name brand Chinese junk when I can buy generic stuff from probably the same factory?

kevin_thibedeau 10y ago

They need to streamline the stupid checkout process where you get hammered with incessant questions and wait for 3-feet of receipts to print out.

PhantomGremlin 10y ago
incessant questions You mean like "do you want to apply for a credit card?"? There's a reason for that. The associate gets $2 for every store credit card and $4 for every bank credit card sign-up. It's a big deal to a kid making $10/hr. But it certainly doesn't help the overall experience for those people who don't want another credit card.
- marktangotango 10y ago
  I'm glad they get a commission on those. Unlike the poor folks at Best Buy who get nothing for upselling the worthless warranty extensions. I last asked a few years ago so this may have changed.

sliken 10y ago

When sears killed their lifetime guarantee on wrenches, the local competition put an aquarium in their tool section. Throw in a "useless" sears wrench and you could pick up a free replacement with a life time guarantee. Seemed pretty effective, the clerk claimed they had to empty the aquarium every week or so for the first year.

kirykl 10y ago

Anecdote: Recently I had a sears gift card number but not the actual gift card. Tried to buy vacuum in store with just the number not the card, and they said no way, even said they should call corporate security to investigate my scam. I went online to sears.com in the store, paid for my vacuum with the gift card number and selected in store pickup. Left with the vacuum.

kevinstubbs 10y ago
For fun, you could buy a few more cards like that and see what kind of mess happens. Like what Steve Wozniak's does with his $2 bills (http://archive.woz.org/letters/general/78.html http://archive.woz.org/letters/general/78.html).
- nodesocket 10y ago
  If you showed up to Cheesecake Factory and for the bill wrote your credit card number, expiration, and CVV on a napkin, do you think they would accept that? In all seriousness, how was that fun for you?
  - kevinstubbs 10y ago
    Straw man argument? Doing that doesn't sound fun at all, and is totally different than what OP was talking about in Sears. Trying to use the giftcard number to see how high their staff will escalate to deal with this "scam" is hilarious, otoh.
otterley 10y ago
The difference is that when you place the order on the Internet, Sears can delay delivery if they discover fraud, and since they know the item is going, they stand a higher change of recovering from the fraudster later. If the fraud occurs in-store, they'll be much less likely to recover if they discover it after the fact.

jimmydddd 10y ago

And they phased out their catalog. If they had waited a few years, they could have put it online and been Amazon. Reminds me of a smaller chain called Service Merchandise. You could order from an electronic kiosk in the store, and your product would come out on a conveyor belt a few minutes later. If they had hung in a bit longer, they could have phased the kiosk ordering to the internet.

smelendez 10y ago
Astonishingly: https://www.servicemerchandise.com https://www.servicemerchandise.com
GFK_of_xmaspast 10y ago
> a few minutes later If you were lucky.

WhitneyLand 10y ago

I didn't know for sure they were still in business. Who shops at Sears? For what reason?

RijilV 10y ago

Such a shame really. I get how they were blind to it, but sears ran a successful mail order business for decades before the Internet was widely available. What a missed opportunity, usurped by a clever computer tech from the fincial industry. Even when it was clear books were working, sears sat on the sidelines with their print catalog oblivious to the online world.

okonomiyaki3000 10y ago

This is genius! They won't have to pay taxes for the next 20 years! Brilliant!

rbanffy 10y ago

Isn't this that CEO who actually believes in Ayn Rand?

seren 10y ago
He is. I remember reading that article some times ago : https://www.bloomberg.com/news/articles/2013-07-11/at-sears-eddie-lamperts-warring-divisions-model-adds-to-the-troubles https://www.bloomberg.com/news/articles/2013-07-11/at-sears-... It has been posted a few time to HN.
forgetsusername 10y ago
>believes in Ayn Rand? Ayn Rand is a real thing.

desireco42 10y ago

It breaks my heart what this guy Eddie Lampert did to this company. I used to work as a consultant for Sears and have fond memories of my time then. Sears was, for as long as I know them, been mismanaged by their executives. They would spend insane money to hire consultants and developers, only to change direction after less then a year and fire everyone.