Sears: The World’s Slowest Liquidation Sale (Redux)

Today Sears Holdings reported comparable store sales decreases of 10.9% and its twelfth straight quarterly operating loss. And when we are reminded that despite a decade of Eddie Lampert’s leadership there is still no articulated–much less viable–strategy to turn the retailer around, another cash raising tactic is highlighted to distract from the brutal reality of the approaching cliff.

Long time readers of my blog know that I’ve taken Sears leadership to task multiple times over the past several years. And I will readily admit that I am guilty of piling on. But should you be desperate for entertainment, here are a few of my diatribes:

The original: Sears: The World’s Slowest Liquidation Sale

The deliberately provocative: 5 reasons why Sears should liquidate ASAP

And my increasingly prescient: Sears: It’s even worse than you think.

By now, it’s hard to imagine that anyone buys the notion that the growing percentage of Sears Shop Your Way customers has anything to do with the retailer becoming more customer relevant–much less profitable. By now, I would hope it’s obvious that Sears cannot possibly cost cut its way to prosperity. By now, everyone should see that without unprofitable discounts, Sears is unable to even maintain market share.

Most critically, Sears is quickly falling–or has fallen–below a critical mass on a number of dimensions:

  • Number of stores to remain a viable national omnichannel retailer
  • Production volume and outlet distribution for its key proprietary brands (Kenmore, Craftsman, DieHard)
  • Selling space and differentiated product offering needed in most categories to remain competitive.

To maximize the prices he can fetch through an orderly liquidation, I suppose Mr. Lampert has to maintain the illusion that Sears can remain a going-concern national retailer. Let’s just not forget, that it is only an illusion. And he had better hurry.

Dead brand walking.

7 thoughts on “Sears: The World’s Slowest Liquidation Sale (Redux)

  1. Steve, Love your blog. Have to jump in to make a comment. You state that Eddie has no viable plan for turnaround. You are very right. He has no intention of continuing with the traditional brick and mortar Sears. Instead he is letting it morph into something that he (IMHO) wants to resemble AMAZON. No doubt he is burning the furniture to heat the cabin. When all is liquidated, all that will be left is the names; Sears, Kenmore, Craftsman and DieHard.

  2. Hi Steve,
    Agree. This isn’t as fun to watch as the demise of the Wicked Witch of the West.

    Here are a few questions/remarks:
    * how many stores does a viable, national omnichannel retailer require?
    * the proprietary brands were toast when the catalog was sold and 4,000 doors closed. 875 stores did not equal a national brick and mortar retailer (no internet) as WMT, TGT, BBY, THD, AZO among others proved in the ’80s and ’90s.
    * of the remaining ~800 mall locations, a bunch of them are past their expiration dates. (M is onto “TJX”; what’s JCP going to do?) why spend a dime on them?

    Is this a “Ron Johnson” right sizing moment?

    I think Eddie knew it was a dog when he bought. I always wondered why the guy who bought KMart would buy Sears. Now we know. Still wonder if Lacy was the hero.

  3. Some recent surveys requests I got from Sears suggest they are going to make Craftsman tools and auto a stronger modern part of the store. I surely hope so. It’s all I go there for as a guy. My wife does Land’s End by internet and returns to Sears as needed because that is easiest. I order online with Shop Your Way, pick up at store, and play that rewards game very well to get some great prices on Craftsman tools. If it weren’t for the online shopping, almost nothing from Sears would have been purchased by our household. Anyway, that’s my customer experience as someone who still likes Sears a lot for a few niche reasons.

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