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Sears Files for Bankruptcy

15 points by jihadjihad 8y ago

AtlasBarfed 8y ago
https://www.usatoday.com/story/money/2017/03/22/sears-holdings-ceo-eddie-lampert/99487518/ https://www.usatoday.com/story/money/2017/03/22/sears-holdin... Basically the scumbag ceo has been pilfering the company of its assets by selling them at a discount to another company he controls.
- mgkimsal 8y ago
  And it's been happening for years. I recall reading a story probably... 3 years ago (or maybe 4) detailing what was going with with ESL group (IIRC), and... I just couldn't quite believe everyone was going along with this. I'm presuming a some folks made a lot of money, but it was at the expense of gutting Sears. There was no way they had any intention of even trying to keep it a competitive concern. This is one of those examples people trot out with "Amazon is killing competition". It might be in some cases, but the Sears situation was assisted suicide, and using Sears as an example of an Amazon victim is nonsense.
- djsumdog 8y ago
  I was wondering about that. The article mentions the spin off companies without mentioning what they were. So could this have been preventable? I've heard Toys-R-Us wasn't that bad off; it's just that they had a leverage buyout in like the 90s or 2000s that put them in a lot of debt with the hope their growth rate would continue. The Toys-R-Us failure didn't really make any sense since people still like to physically see and touch toys before purchasing them (although I guess retailers like Target, Wal-Market, independent toy shops, et. al. have large enough toy sections now to take care of that?) There's a great 99% Invisible podcast about Sears houses. Before the cookie-cutter boom after WW2, a lot of Americans ordered kit houses from Sears which arrived in rail cars and could be assembled in a few months. Many of these houses still exist, and the people who owned them were completely unaware until amateur historians recognized them, contacted the owners and discovered the Sears seals or part numbers in their basement or attics. https://99percentinvisible.org/episode/the-house-that-came-in-the-mail/ https://99percentinvisible.org/episode/the-house-that-came-i...
  - candiodari 8y ago
    That just means banks wanted to lend Toys-R-Us money, knowing full well (because buyout) that it was going to be paid out to the shareholders, believing it wouldn't put the company under. That was an error in judgement. What exactly is wrong here ? Banks took a chance. Banks lost. Note that one might also point out that the government's QE policy is heavily stimulating exactly this. Nothing's preventing someone else from making a new big toy emporium. Though, presumably banks will be a bit less forthcoming with huge loans.
  - nadezhda18 8y ago
    thanks for the link, it was so interesting to read about these houses! It felt to me that ordering kit houses was such an American spirit! Building a house with your hands, there is something special about it... and ordering a kit from a store to build it is a bit mind blowing :)
AviationAtom 8y ago
The writing was on the wall for a long while. This is where your choice of CEO means everything.
xfour 8y ago
I wonder if in a strange way companies like Sears were a victim of the first dotcom bubble crash. If they had pivoted at that point, they’d have been in a better place. But I could just imagine the executives being in such an “I told you this web thing was a fad” mode that they missed their window to modernize. Especially since the kind of non amazon places that seem to succeed now carry heavy products and sears had no shortage of that.
- djsumdog 8y ago
  Sears owned Prodigy on-line originally (jointly with IBM). If anything they were above the curve in that regard. But just like Microsoft and their satellite maps (years before Google Earth), they didn't push those technologies in the right direction. IBM and Microsoft are still around (kinda surprisingly, at least for IBM, when you think about how old the company really is. I mean they sold punch cards to the Nazis). Sears was literally the Amazon of the 1900s. Everything could be bought from their catalogues and they pushed those catalogues harder than Tigers Direct. It shows that no matter how big you are, other similar companies can easily go the same way. I wonder if Amazon, Facebook and Google will still be as big when I retire, or if they'll be in a decline or dead.
- orev 8y ago
  Successful companies are largely victims of their own success. They got to where they are by doing things a certain way, so it becomes very risky to change that approach, even when the ground is shifting under them. The internal structures that worked for one model don’t work in the new one, and yet they are calcified due to management structures and worker skill sets. History has shown time and again that these companies just can’t pivot the way they need to.

15 points by jihadjihad 8y ago

https://www.usatoday.com/story/money/2017/03/22/sears-holdings-ceo-eddie-lampert/99487518/ https://www.usatoday.com/story/money/2017/03/22/sears-holdin... Basically the scumbag ceo has been pilfering the company of its assets by selling them at a discount to another company he controls.

mgkimsal 8y ago
And it's been happening for years. I recall reading a story probably... 3 years ago (or maybe 4) detailing what was going with with ESL group (IIRC), and... I just couldn't quite believe everyone was going along with this. I'm presuming a some folks made a lot of money, but it was at the expense of gutting Sears. There was no way they had any intention of even trying to keep it a competitive concern. This is one of those examples people trot out with "Amazon is killing competition". It might be in some cases, but the Sears situation was assisted suicide, and using Sears as an example of an Amazon victim is nonsense.
djsumdog 8y ago
I was wondering about that. The article mentions the spin off companies without mentioning what they were. So could this have been preventable? I've heard Toys-R-Us wasn't that bad off; it's just that they had a leverage buyout in like the 90s or 2000s that put them in a lot of debt with the hope their growth rate would continue. The Toys-R-Us failure didn't really make any sense since people still like to physically see and touch toys before purchasing them (although I guess retailers like Target, Wal-Market, independent toy shops, et. al. have large enough toy sections now to take care of that?) There's a great 99% Invisible podcast about Sears houses. Before the cookie-cutter boom after WW2, a lot of Americans ordered kit houses from Sears which arrived in rail cars and could be assembled in a few months. Many of these houses still exist, and the people who owned them were completely unaware until amateur historians recognized them, contacted the owners and discovered the Sears seals or part numbers in their basement or attics. https://99percentinvisible.org/episode/the-house-that-came-in-the-mail/ https://99percentinvisible.org/episode/the-house-that-came-i...
- candiodari 8y ago
  That just means banks wanted to lend Toys-R-Us money, knowing full well (because buyout) that it was going to be paid out to the shareholders, believing it wouldn't put the company under. That was an error in judgement. What exactly is wrong here ? Banks took a chance. Banks lost. Note that one might also point out that the government's QE policy is heavily stimulating exactly this. Nothing's preventing someone else from making a new big toy emporium. Though, presumably banks will be a bit less forthcoming with huge loans.
- nadezhda18 8y ago
  thanks for the link, it was so interesting to read about these houses! It felt to me that ordering kit houses was such an American spirit! Building a house with your hands, there is something special about it... and ordering a kit from a store to build it is a bit mind blowing :)

AviationAtom 8y ago

The writing was on the wall for a long while. This is where your choice of CEO means everything.

xfour 8y ago

I wonder if in a strange way companies like Sears were a victim of the first dotcom bubble crash. If they had pivoted at that point, they’d have been in a better place. But I could just imagine the executives being in such an “I told you this web thing was a fad” mode that they missed their window to modernize. Especially since the kind of non amazon places that seem to succeed now carry heavy products and sears had no shortage of that.

djsumdog 8y ago
Sears owned Prodigy on-line originally (jointly with IBM). If anything they were above the curve in that regard. But just like Microsoft and their satellite maps (years before Google Earth), they didn't push those technologies in the right direction. IBM and Microsoft are still around (kinda surprisingly, at least for IBM, when you think about how old the company really is. I mean they sold punch cards to the Nazis). Sears was literally the Amazon of the 1900s. Everything could be bought from their catalogues and they pushed those catalogues harder than Tigers Direct. It shows that no matter how big you are, other similar companies can easily go the same way. I wonder if Amazon, Facebook and Google will still be as big when I retire, or if they'll be in a decline or dead.
orev 8y ago
Successful companies are largely victims of their own success. They got to where they are by doing things a certain way, so it becomes very risky to change that approach, even when the ground is shifting under them. The internal structures that worked for one model don’t work in the new one, and yet they are calcified due to management structures and worker skill sets. History has shown time and again that these companies just can’t pivot the way they need to.