Being Remarkable · Retail · Winning on Experience

Sears: The world’s slowest liquidation sale

“I see dead people…they only see what they want to see.  They don’t know they’re dead.”

– Cole Sear in The Sixth Sense

There probably was a time when Eddie Lampert honestly believed that Sears and Kmart could be resurrected as competitive retailers. But the concept of putting together a mediocre (and declining) department store, with an also-ran to Walmart and Target, was failed from the start.

In the intervening nine (!!!) years, Lampert has never once articulated a strategy for fundamentally improving the value proposition of either brand that made any sense.

On the contrary, he organized product and business unit teams into “competing” merchandise categories despite overwhelming evidence that consumers wanted more integration, not less. He required that every individual product earn a competitive ROI when every winning retailer on the planet understood the notion of category management and market-basket profitability. He starved both nameplates of capital when each was already woefully behind best-in-class competitors. He cut expenses to the bone when it was clear that both Sears and K-mart had a revenue problem, not a cost problem. He closed dozens of stores, further exacerbating both brands’ lack of critical mass in many markets.

Of late, he’s been pushing two ridiculous notions. The first is the idea that Sears is becoming a “membership” company. Please. This is mostly a transparent customer data grab. The value proposition of “Shop Your Way” is weak and the idea that being a member conveys any real sense of brand loyalty, engagement or fundamental profitability would be laughable if the whole endeavor weren’t so sad.

Crazy Eddie’s other big idea is transforming Sears into an “integrated digital platform.” For this to work you have to believe that Sears can compete effectively with Amazon–not to mention a whole host of leading multi-channel retailers–or that you can somehow win in an omni-channel world with a crappy, declining and shrinking brick and mortar base. Both defy basic logic.

Whether Lampert is delusional or not remains irrelevant. Whether by design or desperation, Sears has been liquidating for years.

Sears can certainly create liquidity for a bit longer by continuing to off load assets. But any realistic hope that Sears can pull out of this dive has, sadly, long since passed.

Dead brand walking.

 

 

13 thoughts on “Sears: The world’s slowest liquidation sale

  1. Most real estate developers and firms that purchase large RE assets believe their brilliant, yet for the most part they’re only lucky because they caught the wave at the right time. And with easy money Mr Lampert thought he could rule an industry that he obviously knew nothing about. Maybe the next wave will bail his real estate out, when it’s leased to his competitors or some new venture. Otherwise it will become as worthless as sceevy Sears and Kmart.

  2. Steven, thanks for the article. It rings true with me. I recall the turnaround at Sears in the 90s under the leadership of Arthur Martinez who knew retail and knew it well. Sadly, the turnaround never evolved into an all-out transformation and the company began to turn back to its self-destructive behaviors that led the need for a transformation in the first place. The company had some great leaders through the decades, with Wood the most notable, being at the right place at the right time, but more importantly anticipating the changes in society in the 20s and 30s and transforming Sears from a moderately successful mail order business to the most influential merchandiser in the country. I don’t see this in Eddie. I don’t see vision, I don’t see savvy. I don’t even see an apparent desire to do anything to save the company from closing its doors. To say that this is sad doesn’t say enough about the destruction caused by myopic Sears leaders in recent years. It’s possible that the decline was as inevitable as the fall of the Roman empire (they thought they would last forever too), but it still doesn’t make the gut wrenching feeling go away watching a giant like Sears, once powerful and an image of the American Dream, lay down to die like a wounded elephant. But then life goes on, doesn’t it.

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