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You made me read the history of Sears on Wikipedia and the story seems much more complicated than you describe. It's not very clear who took a loss and by how

You made me read the history of Sears on Wikipedia and the story seems much more complicated than you describe. It's not very clear who took a loss and by how much, and who gained and by how much, but overall it seemed to be the usual story of distracted mismanagement unable to keep up with changing competition and going into a death spiral. In other words, just another slow inevitable boom-bust-style cycle that's constantly happening everywhere around us.

jordanb 2y ago
No I worked at Sears and it was driven into the ground by an idiot PE fund manager and his arrogant consultants. Sears had one big problem when Eddie took over: it was out of step with the then-current retail format (big box stores). Its stores were heavily situated in enclosed malls that were out of fashion. The solution was straightforward if expensive: reformat the business (Sears had already done this twice before). But then Eddie rolled into town with his genius consultants and a galaxy brained idea: Kmart has stand-alone stores that kinda look like big box if you squint. So let's just merge the brands together! Then Sears ends up in big boxes without expensive reformatting! The fact that the brands were completely incompatible was pointed out by everyone who knew anything, but those weren't people in Eddie's inner circle so their opinions meant nothing. By the way I don't think ESL Investments ended up making money on Sears. They stripped the company of assets yes, but most of those assets were distressed by the collapse of Sears. Like a lot of real estate was in struggling malls that had Sears as the anchor tenant. ISTR some of ESL's LPs suing Eddie. Eddie made money the way all PE fund managers make money even when everyone else involved loses their shirt: by charging fees.
- quesera 2y ago
  I did not work at Sears, but from the retail customer side, Sears was dead for a decade or two before it died. You might be able to imagine pivots that could have brought the company back to life, but none of them were guaranteed, or, from my perspective, even remotely likely. Sears was dead dead. Too ossified, too big, too out of touch. Just like Kmart. And Radio Shack. And Circuit City. JC Penney. The stores were dead, the products were marginal or worse, the prices were out of line. Retail staff was sparse and generally not great. The house brands were eroded. The national brands were overpriced. Sears had no reason to live. And it died, whatever the corporate machinations were to attempt to extract every last bit of residual/perceived value beforehand. The PE machinations were not a success, but the ultimate death was the correct and expected result for a free market. It was sad to lose a brand and a community fixture like that. But it was gone for so long before it finally went away that there was zero surprise, except the duration of the death throes. IMHO of course!
  - jordanb 2y ago
    Eddie took over in 2005. Sears was profitable before the KMart merger. KMart was already owned by Eddie and already in bankruptcy during the merger. Sears could easily have been Target or Wal-Mart. The company was full of people who knew retail and knew how to execute on retail. It was destroyed by absolutely horrible management by up-their-own-asshole finance bros who knew nothing about how to run a retailer and who refused to listen to anyone who did. My current employer is also being destroyed by PE. This time the chief idiot is Paul Singer but otherwise the script is the same: the company had one issue that was depressing the stock. The PE firm and their McKinsey children went about doing everything possible except fixing that problem. Now the company is in a death spiral.
    - quesera 2y ago
      > Sears could easily have been Target or Wal-Mart I don't believe this at all. Wal-Mart was already Wal-Mart, and while I have no love for them as a retail outlet, their execution is meticulous and aggressive. Sears was never, in my lifetime, that intense. Target had, and mostly continues to have, something that Sears could not touch: taste. Sears was busy being a default option for everyone, but never an exciting choice for anyone. No way could Sears have become Target. They'd need a new brand. Now of course, if you take $X billion dollars of assets, dump the backward-looking real estate and locations, go through massive layoffs and an amazing rebrand, reorient toward online, unwind decades of dilution in house brands, open new smaller stores in the new correct locations, and masterfully pivot the entire corporate culture to be something new by hiring the buyers and marketing people from, say, Target. Then yeah, you might be able to pull something off. But that'd be easier to do with just the $X billion from some other source. But Sears was what it was, and it's an open question whether the market would have supported a whole new Target, or if the existing Target (etc) would have been able to quickly shift into whatever small gaps the amazing team at NeoSears had identified for them. ... Total agreement and sympathy for you on the PE cannibalization process and the inevitable negative result for everyone except the private investors.

jordanb 2y ago

No I worked at Sears and it was driven into the ground by an idiot PE fund manager and his arrogant consultants. Sears had one big problem when Eddie took over: it was out of step with the then-current retail format (big box stores). Its stores were heavily situated in enclosed malls that were out of fashion. The solution was straightforward if expensive: reformat the business (Sears had already done this twice before). But then Eddie rolled into town with his genius consultants and a galaxy brained idea: Kmart has stand-alone stores that kinda look like big box if you squint. So let's just merge the brands together! Then Sears ends up in big boxes without expensive reformatting! The fact that the brands were completely incompatible was pointed out by everyone who knew anything, but those weren't people in Eddie's inner circle so their opinions meant nothing. By the way I don't think ESL Investments ended up making money on Sears. They stripped the company of assets yes, but most of those assets were distressed by the collapse of Sears. Like a lot of real estate was in struggling malls that had Sears as the anchor tenant. ISTR some of ESL's LPs suing Eddie. Eddie made money the way all PE fund managers make money even when everyone else involved loses their shirt: by charging fees.

quesera 2y ago
I did not work at Sears, but from the retail customer side, Sears was dead for a decade or two before it died. You might be able to imagine pivots that could have brought the company back to life, but none of them were guaranteed, or, from my perspective, even remotely likely. Sears was dead dead. Too ossified, too big, too out of touch. Just like Kmart. And Radio Shack. And Circuit City. JC Penney. The stores were dead, the products were marginal or worse, the prices were out of line. Retail staff was sparse and generally not great. The house brands were eroded. The national brands were overpriced. Sears had no reason to live. And it died, whatever the corporate machinations were to attempt to extract every last bit of residual/perceived value beforehand. The PE machinations were not a success, but the ultimate death was the correct and expected result for a free market. It was sad to lose a brand and a community fixture like that. But it was gone for so long before it finally went away that there was zero surprise, except the duration of the death throes. IMHO of course!
- jordanb 2y ago
  Eddie took over in 2005. Sears was profitable before the KMart merger. KMart was already owned by Eddie and already in bankruptcy during the merger. Sears could easily have been Target or Wal-Mart. The company was full of people who knew retail and knew how to execute on retail. It was destroyed by absolutely horrible management by up-their-own-asshole finance bros who knew nothing about how to run a retailer and who refused to listen to anyone who did. My current employer is also being destroyed by PE. This time the chief idiot is Paul Singer but otherwise the script is the same: the company had one issue that was depressing the stock. The PE firm and their McKinsey children went about doing everything possible except fixing that problem. Now the company is in a death spiral.
  - quesera 2y ago
    > Sears could easily have been Target or Wal-Mart I don't believe this at all. Wal-Mart was already Wal-Mart, and while I have no love for them as a retail outlet, their execution is meticulous and aggressive. Sears was never, in my lifetime, that intense. Target had, and mostly continues to have, something that Sears could not touch: taste. Sears was busy being a default option for everyone, but never an exciting choice for anyone. No way could Sears have become Target. They'd need a new brand. Now of course, if you take $X billion dollars of assets, dump the backward-looking real estate and locations, go through massive layoffs and an amazing rebrand, reorient toward online, unwind decades of dilution in house brands, open new smaller stores in the new correct locations, and masterfully pivot the entire corporate culture to be something new by hiring the buyers and marketing people from, say, Target. Then yeah, you might be able to pull something off. But that'd be easier to do with just the $X billion from some other source. But Sears was what it was, and it's an open question whether the market would have supported a whole new Target, or if the existing Target (etc) would have been able to quickly shift into whatever small gaps the amazing team at NeoSears had identified for them. ... Total agreement and sympathy for you on the PE cannibalization process and the inevitable negative result for everyone except the private investors.