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Not disputing the CEO is a force of destruction, but ought not some businesses close? What’s the place of Sears in the modern age?

onetimemanytime 8y ago
Maybe it would have closed even if Eddie had not bought them. But if you hit a swimmer with a 2X4 in the head, people might say that you drowned him...
eesmith 8y ago
Of course some businesses should close. That's not an interesting question. In the modern age, after Sears was destroy by vulture capitalism (https://prospect.org/article/it-was-vulture-capitalism-killed-sears https://prospect.org/article/it-was-vulture-capitalism-kille... ), its place is in the grave. I think the interesting questions are: - Amazon is the modern mail-order company. Why didn't Sears (re)discover that niche? - Does this (finally) drive a stake through the heart of the idea that following the ideas of Ayn Rand is bad for business? If not, why not? https://www.inc.com/erik-sherman/sears-ceo-eddie-lampert-should-stop-reading-ayn-rand.html https://www.inc.com/erik-sherman/sears-ceo-eddie-lampert-sho... - When do we change the law so that "loading up a company with debt and then paying yourself exorbitant fees and dividends and manipulating the share price at the expense of the company" is illegal? (Same prospect.org link) - When do we change the law so that the company head who strips assets for his own profit isn't allowed by the bankruptcy court to keep control of the company? (same prospect.org link)
- burfog 8y ago
  Bankruptcy court can determine that transactions before the bankruptcy filing were done to evade the payment priority defined by bankruptcy law. The court can do a clawback to get those assets.
  - eesmith 8y ago
    The link I gave says that the practice I described "is the norm", meaning that yes, a court can do that, while the argument is that the court should (almost) always do that.
ticmasta 8y ago
dig into the back story; aside from the public challenges of a traditional brick&mortar retailer, Lampert actively accelerated it's downfall to enormous personal gain. He literally destroyed the business (let the retail stores fall into disrepair) while he sold off it's most valuable assets like the brands and milked it for cash as a major creditor. He is a modern day robber-baron with none of the mystique or cachet that time has granted the railway and oil families; He's nothing more than a butcher (no offense intended to actual hard working butchers). >> What’s the place of Sears in the modern age? Sears was the original amazon from the analogue-internet days; they were well-poised before Lampert showed up and missed their chance. There is still a huge amount of money in traditional retail and Sears could have owned a lot of the market that the Walmarts, Staples and Home Depots have moved into: bigger, high-ticket physical goods like appliances, home furnishings, gardening & outdoor living, even building supplies in package form. I think they will go down in history as one of the great miss-steps of the modern age of retailing. From the defacto go-to for an entire continent to nothing.
- jillesvangurp 8y ago
  This sounds awfully similar to the demise of some retailers in Europe. E.g. Dutch chain V&D recently went out business in the Netherlands after many attempts to reboot. Several chains in Germany have also been declining for some years. There are not a lot of retail chains left that are doing great. This stuff always seems to involve hedge funds sucking struggling companies dry until there's nothing left. It's one of those things that's legal but maybe should be bit less easy to get away with. Deliberately destroying a company for short term gains for investors, sounds a bit fraudulent/dodgy to me at least.
- Aunche 8y ago
  > Lampert actively accelerated it's downfall to enormous personal gain. What exactly did he gain? His hedge fund invested hundreds of millions of dollars in Sears, and it's not even clear that they broke even. Meanwhile, stocks were on their longest rally in history.
  - wvenable 8y ago

onetimemanytime 8y ago

Maybe it would have closed even if Eddie had not bought them. But if you hit a swimmer with a 2X4 in the head, people might say that you drowned him...

eesmith 8y ago

Of course some businesses should close. That's not an interesting question. In the modern age, after Sears was destroy by vulture capitalism (https://prospect.org/article/it-was-vulture-capitalism-killed-sears https://prospect.org/article/it-was-vulture-capitalism-kille... ), its place is in the grave. I think the interesting questions are: - Amazon is the modern mail-order company. Why didn't Sears (re)discover that niche? - Does this (finally) drive a stake through the heart of the idea that following the ideas of Ayn Rand is bad for business? If not, why not? https://www.inc.com/erik-sherman/sears-ceo-eddie-lampert-should-stop-reading-ayn-rand.html https://www.inc.com/erik-sherman/sears-ceo-eddie-lampert-sho... - When do we change the law so that "loading up a company with debt and then paying yourself exorbitant fees and dividends and manipulating the share price at the expense of the company" is illegal? (Same prospect.org link) - When do we change the law so that the company head who strips assets for his own profit isn't allowed by the bankruptcy court to keep control of the company? (same prospect.org link)

burfog 8y ago
Bankruptcy court can determine that transactions before the bankruptcy filing were done to evade the payment priority defined by bankruptcy law. The court can do a clawback to get those assets.
- eesmith 8y ago
  The link I gave says that the practice I described "is the norm", meaning that yes, a court can do that, while the argument is that the court should (almost) always do that.

ticmasta 8y ago

dig into the back story; aside from the public challenges of a traditional brick&mortar retailer, Lampert actively accelerated it's downfall to enormous personal gain. He literally destroyed the business (let the retail stores fall into disrepair) while he sold off it's most valuable assets like the brands and milked it for cash as a major creditor. He is a modern day robber-baron with none of the mystique or cachet that time has granted the railway and oil families; He's nothing more than a butcher (no offense intended to actual hard working butchers). >> What’s the place of Sears in the modern age? Sears was the original amazon from the analogue-internet days; they were well-poised before Lampert showed up and missed their chance. There is still a huge amount of money in traditional retail and Sears could have owned a lot of the market that the Walmarts, Staples and Home Depots have moved into: bigger, high-ticket physical goods like appliances, home furnishings, gardening & outdoor living, even building supplies in package form. I think they will go down in history as one of the great miss-steps of the modern age of retailing. From the defacto go-to for an entire continent to nothing.

jillesvangurp 8y ago
This sounds awfully similar to the demise of some retailers in Europe. E.g. Dutch chain V&D recently went out business in the Netherlands after many attempts to reboot. Several chains in Germany have also been declining for some years. There are not a lot of retail chains left that are doing great. This stuff always seems to involve hedge funds sucking struggling companies dry until there's nothing left. It's one of those things that's legal but maybe should be bit less easy to get away with. Deliberately destroying a company for short term gains for investors, sounds a bit fraudulent/dodgy to me at least.
Aunche 8y ago
> Lampert actively accelerated it's downfall to enormous personal gain. What exactly did he gain? His hedge fund invested hundreds of millions of dollars in Sears, and it's not even clear that they broke even. Meanwhile, stocks were on their longest rally in history.
- wvenable 8y ago