5 ms·
I agree that we should approach questions like this with some kind of epistemic modesty. At the same time, if you look at Sears's peers, most of them are still
by cepth 8y ago
I agree that we should approach questions like this with some kind of epistemic modesty.
At the same time, if you look at Sears's peers, most of them are still alive and kicking, if not thriving. E.g. Target, Wal-Mart, Macy's, Kohl's, JC Penney, Best Buy etc.
- jdpedrie 8y ago> At the same time, if you look at Sears's peers, most of them are still alive and kicking, if not thriving. E.g. Target, Wal-Mart, Macy's, Kohl's, JC Penney, Best Buy etc. That seems like confirmation bias to me. I could write a much longer list of national retail chains gone out of business over the last decade and a half. Circuit City, Mervyn's, A&P, Borders, CompUSA, Toys R Us, Marshall Fields, the list goes on.
- cepth 8y agoI think we'll just have to agree to disagree on who Sears's peer companies are. I meant to compare Sears to other large department stores, though Best Buy is obviously more a peer to Sears's appliance/hard goods departments. It's hard to find data from 2003 (when Lampert merged Sears and Kmart), but flip to page 3 of this PDF: https://core.ac.uk/download/pdf/7105653.pdf https://core.ac.uk/download/pdf/7105653.pdf. All of those retailers except Sears are still healthy companies. In regards to the examples you brought up, I think there are some questions about how comparable they are in terms of retail niche and scale. The Circuit City example I'll concede. They sold a lot of similar products as Sears. -Mervyn's From their wiki: >Based on 2005 revenue, Mervyn's was the 83rd largest retailer in the United States. It seems that Mervyn's is more of a regional chain? Not a national retailer. -A&P If this is the same east coast A&P that I know, this was a grocer. Doesn't really seem to be a peer of Sears. -Marshall Fields They were acquired by Macy's, not shuttered. Shareholders may have taken a haircut from the company's peak share price, but they weren't left with nothing. Sears trades at ~$1 as of today. -Borders If you mean Borders the specialty book seller, I don't really see how this is comparable to Sears. -CompUSA A specialty computer retailer, that to my memory did not even sell appliances? I don't see how they're a peer to Sears. -Toys R Us A specialty toy retailer vs a department store? I'd also note that there's been widespread debate about whether Toys R Us was done in by its debt-laden LBO (https://www.bloomberg.com/news/articles/2018-03-09/toys-r-us-downfall-is-ominous-reminder-about-debt-laden-deals https://www.bloomberg.com/news/articles/2018-03-09/toys-r-us...). Also worth noting it has not been a public company since 2005.
- emodendroket 8y agoThere's also the question of whether some in this list have not been mismanaged themselves. You point to Toys R Us, but I've certainly heard similar questions about Borders and A&P, for instance.
- jonnycomputer 8y agoTrue, but Sears had both a reputation for quality and the status of an American historical icon. Someone could have made it work.
- Spooky23 8y agoMany retailers fail. There are few surviving department stores and weaker bug box stores get culled frequently. Sears was unique as it was a legacy company who screwed up at every turn. The smart move for the shareholders would have been to spin out the business units and sell the valuable real estate.
- sct202 8y agoThey did spin out a lot of the real estate into Seritage, which Lampert owns a large chunk of.
- bluedino 8y agoJC Penney is barely hanging on, it's stock is 1/10th of what it was just 2 years ago.
- lintball 8y ago$1.9 a share, not at all unlike SHLD.