6 ms·

I don't follow this story closely, but I bet somebody here does: My sense is that yeah there's Amazon and all the other missed opportunities, but don't they al

by Jgrubb 7y ago

I don't follow this story closely, but I bet somebody here does: My sense is that yeah there's Amazon and all the other missed opportunities, but don't they also have some corporate raider type as CEO who's totally cashing in on running this chain into the ground?

nkrisc 7y ago
Oh yes. There is plenty to read about Eddie Lampert. He would like it to read like an Ayn Rand novel, but that's not the case (out maybe it is, but not in the way he was expecting).
- shadowgovt 7y ago
  It reads like a Rand story if someone tried that economic philosophy in real life. Which, it seems, he did. To this effect.
  - magduf 7y ago
    I'm surprised that there aren't dozens and dozens of comments here lauding Lampert's behavior and business strategy here. After all, tech and HN are chock-full of libertarians and Ayn Rand lovers.
    - perl4ever 7y ago
      Are you being sarcastic to imply the stereotype is false, or genuinely surprised? I can't remember seeing anyone defend him much anywhere, and even though I don't think much of libertarianism and Rand these days, it would be interesting to read a defense by someone who was reasonably intelligent and had done some research beyond just listening to the stuff everyone repeats. I have a feeling that even though his management may have been destructive, the stories are greatly simplified and distorted to make good stories.
    - deleted 7y ago
      [deleted]
    - shadowgovt 7y ago
      Followers of Rand don't have much patience for the failure stories, because those are clearly the fault of those who failed. Probably for not Randing hard enough. ;)
ilogik 7y ago
it's actually a really interesting story about corruption...this episode of the Opening Arguments podcasts goes into it: https://openargs.com/oa273-sears-steve-mnuchin-the-producers/ https://openargs.com/oa273-sears-steve-mnuchin-the-producers...
- Jgrubb 7y ago
  Thank you friend, this is exactly the kind of podcast that's missing from my list.
TulliusCicero 7y ago
Yes. IIRC he's kind of an extreme libertarian who actively pitted different parts of the company against each other, to compete.
- ceejayoz 7y ago
  This is getting downvotes despite being 100% accurate. 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-... > Lampert runs Sears like a hedge fund portfolio, with dozens of autonomous businesses competing for his attention and money. An outspoken advocate of free-market economics and fan of the novelist Ayn Rand, he created the model because he expected the invisible hand of the market to drive better results. If the company’s leaders were told to act selfishly, he argued, they would run their divisions in a rational manner, boosting overall performance. > Instead, the divisions turned against each other—and Sears and Kmart, the overarching brands, suffered. Interviews with more than 40 former executives, many of whom sat at the highest levels of the company, paint a picture of a business that’s ravaged by infighting as its divisions battle over fewer resources. > Under the new model, Lampert evaluated the different divisions—and calculated executives’ bonuses—using a metric called business operating profit, or BOP. As some employees had feared, individual business units started to focus solely on their own profitability and stopped caring about the welfare of the company as a whole. According to several former executives, the apparel division cut back on labor to save money, knowing that floor salesmen in other departments would inevitably pick up the slack. Turf wars sprang up over store displays. No one was willing to make sacrifices in pricing to boost store traffic.
  - geogra4 7y ago
    Sounds like a pretty damning indictment of quarter-by-quarter short termism
    - TulliusCicero 7y ago
      No, this sounds like an orthogonal issue. Plenty of public companies -- perhaps most -- are afflicted with quarter-by-quarter thinking, but deliberately pitting divisions against each other? That's much rarer behavior.
troydavis 7y ago
> don't they also have some corporate raider type as CEO who's totally cashing in on running this chain into the ground? Institutional Investor tried to answer that question in http://institutionalinvestor.com/article/b1c33fqdnhf21s/Eddie-Lampert-Shattered-Sears-Sullied-His-Reputation-and-Lost-Billions-of-Dollars-Or-Did-He http://institutionalinvestor.com/article/b1c33fqdnhf21s/Eddi.... Their take: "… ESL hasn’t lost the entire $1.5 billion it invested in Sears and Kmart equity. Including the gains and losses on the major spin-offs, dividends, and interest income, it appears that loss was narrowed to about $624 million. Adding back the $2 billion in gains from hedge fund fees would give Lampert a net profit of approximately $1.38 billion. And that’s not even counting the uncertain value of his $2.6 billion in Sears debt, with its liens on Sears real estate, among other items." Industry consensus is that no one would have chosen to make this investment if they knew what the next 10 years would look like, but given those abysmal results, he did far better than any other stakeholder.
- perl4ever 7y ago
  I get what you're saying, but really, it's kind of like saying of an ordinary person - sure, they robbed that convenience store, but really, when you look at how much time they put into preparation, they only made $5/hr, so they are hardly "cashing in".

by Jgrubb 7y ago

nkrisc 7y ago

Oh yes. There is plenty to read about Eddie Lampert. He would like it to read like an Ayn Rand novel, but that's not the case (out maybe it is, but not in the way he was expecting).

shadowgovt 7y ago
It reads like a Rand story if someone tried that economic philosophy in real life. Which, it seems, he did. To this effect.
- magduf 7y ago
  I'm surprised that there aren't dozens and dozens of comments here lauding Lampert's behavior and business strategy here. After all, tech and HN are chock-full of libertarians and Ayn Rand lovers.
  - perl4ever 7y ago
    Are you being sarcastic to imply the stereotype is false, or genuinely surprised? I can't remember seeing anyone defend him much anywhere, and even though I don't think much of libertarianism and Rand these days, it would be interesting to read a defense by someone who was reasonably intelligent and had done some research beyond just listening to the stuff everyone repeats. I have a feeling that even though his management may have been destructive, the stories are greatly simplified and distorted to make good stories.
  - deleted 7y ago
    [deleted]
  - shadowgovt 7y ago
    Followers of Rand don't have much patience for the failure stories, because those are clearly the fault of those who failed. Probably for not Randing hard enough. ;)

ilogik 7y ago

it's actually a really interesting story about corruption...this episode of the Opening Arguments podcasts goes into it: https://openargs.com/oa273-sears-steve-mnuchin-the-producers/ https://openargs.com/oa273-sears-steve-mnuchin-the-producers...

Jgrubb 7y ago
Thank you friend, this is exactly the kind of podcast that's missing from my list.

TulliusCicero 7y ago

Yes. IIRC he's kind of an extreme libertarian who actively pitted different parts of the company against each other, to compete.

ceejayoz 7y ago
This is getting downvotes despite being 100% accurate. 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-... > Lampert runs Sears like a hedge fund portfolio, with dozens of autonomous businesses competing for his attention and money. An outspoken advocate of free-market economics and fan of the novelist Ayn Rand, he created the model because he expected the invisible hand of the market to drive better results. If the company’s leaders were told to act selfishly, he argued, they would run their divisions in a rational manner, boosting overall performance. > Instead, the divisions turned against each other—and Sears and Kmart, the overarching brands, suffered. Interviews with more than 40 former executives, many of whom sat at the highest levels of the company, paint a picture of a business that’s ravaged by infighting as its divisions battle over fewer resources. > Under the new model, Lampert evaluated the different divisions—and calculated executives’ bonuses—using a metric called business operating profit, or BOP. As some employees had feared, individual business units started to focus solely on their own profitability and stopped caring about the welfare of the company as a whole. According to several former executives, the apparel division cut back on labor to save money, knowing that floor salesmen in other departments would inevitably pick up the slack. Turf wars sprang up over store displays. No one was willing to make sacrifices in pricing to boost store traffic.
- geogra4 7y ago
  Sounds like a pretty damning indictment of quarter-by-quarter short termism
  - TulliusCicero 7y ago
    No, this sounds like an orthogonal issue. Plenty of public companies -- perhaps most -- are afflicted with quarter-by-quarter thinking, but deliberately pitting divisions against each other? That's much rarer behavior.

troydavis 7y ago

> don't they also have some corporate raider type as CEO who's totally cashing in on running this chain into the ground? Institutional Investor tried to answer that question in http://institutionalinvestor.com/article/b1c33fqdnhf21s/Eddie-Lampert-Shattered-Sears-Sullied-His-Reputation-and-Lost-Billions-of-Dollars-Or-Did-He http://institutionalinvestor.com/article/b1c33fqdnhf21s/Eddi.... Their take: "… ESL hasn’t lost the entire $1.5 billion it invested in Sears and Kmart equity. Including the gains and losses on the major spin-offs, dividends, and interest income, it appears that loss was narrowed to about $624 million. Adding back the $2 billion in gains from hedge fund fees would give Lampert a net profit of approximately $1.38 billion. And that’s not even counting the uncertain value of his $2.6 billion in Sears debt, with its liens on Sears real estate, among other items." Industry consensus is that no one would have chosen to make this investment if they knew what the next 10 years would look like, but given those abysmal results, he did far better than any other stakeholder.

perl4ever 7y ago
I get what you're saying, but really, it's kind of like saying of an ordinary person - sure, they robbed that convenience store, but really, when you look at how much time they put into preparation, they only made $5/hr, so they are hardly "cashing in".