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dig into the back story; aside from the public challenges of a traditional brick&mortar retailer, Lampert actively accelerated it's downfall to enormous persona

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
  Perhaps "attempted to gain" might be better way to put it. The first thing he did was have Sears take on a huge amount of debt owed to financial service companies that he controlled. Then sell real estate to companies that he controlled and have Sears pay rent to them. This list goes on.
- ticmasta 8y ago
  I a nutshell, his playbook was: 1/ buy tonnes of stock at a discount via his "arms length" hedge fund 2/ as CEO take the billions of cash that Sears was flush with at the time and authorize share repurchases (almost 6 billion over 5 years, at premiums up to $170/share) 3/ defer any reinvestment in existing assets (stores, people, innovation) 4/ liquidate assets of value (i.e. brands) 5/ blame outside forces like markets, competition and (hilarious if it wasn't so sad) the media here's a quote from 2007: "we will not spend money on capital expenditures to build new stores or upgrade our existing base simply because our competitors do. If share repurchases or acquisitions appear to be more productive, then we will allocate capital to those options appropriately." He put his own unsecured financing (equity) at the front of the line ahead of traditional obligations (i.e. running the business) and liabilities (like say, pension obligations) by making share purchases a priority. At the time & market conditions this was an obvious self-serving move. His performance has been described as "the most protracted liquidation in history" - we're just now observing the conclusion.
  - ChrisLomont 8y ago
    >1/ buy tonnes of stock at a discount via his "arms length" hedge fund Lampert owns around 30% of outstanding Sears stock and ESL holds around 20%. He bought all that at far above current prices, paying hundreds of millions over the years to buy the stock. Now he's going to take a significant haircut in bankruptcy court, so much so that he's trying to throw another $4B into this hole to save his investment. Sears Holdings has a market cap of $23M today. He's already lost hundreds of millions on this.

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
Perhaps "attempted to gain" might be better way to put it. The first thing he did was have Sears take on a huge amount of debt owed to financial service companies that he controlled. Then sell real estate to companies that he controlled and have Sears pay rent to them. This list goes on.
ticmasta 8y ago
I a nutshell, his playbook was: 1/ buy tonnes of stock at a discount via his "arms length" hedge fund 2/ as CEO take the billions of cash that Sears was flush with at the time and authorize share repurchases (almost 6 billion over 5 years, at premiums up to $170/share) 3/ defer any reinvestment in existing assets (stores, people, innovation) 4/ liquidate assets of value (i.e. brands) 5/ blame outside forces like markets, competition and (hilarious if it wasn't so sad) the media here's a quote from 2007: "we will not spend money on capital expenditures to build new stores or upgrade our existing base simply because our competitors do. If share repurchases or acquisitions appear to be more productive, then we will allocate capital to those options appropriately." He put his own unsecured financing (equity) at the front of the line ahead of traditional obligations (i.e. running the business) and liabilities (like say, pension obligations) by making share purchases a priority. At the time & market conditions this was an obvious self-serving move. His performance has been described as "the most protracted liquidation in history" - we're just now observing the conclusion.
- ChrisLomont 8y ago
  >1/ buy tonnes of stock at a discount via his "arms length" hedge fund Lampert owns around 30% of outstanding Sears stock and ESL holds around 20%. He bought all that at far above current prices, paying hundreds of millions over the years to buy the stock. Now he's going to take a significant haircut in bankruptcy court, so much so that he's trying to throw another $4B into this hole to save his investment. Sears Holdings has a market cap of $23M today. He's already lost hundreds of millions on this.