Sears

Gerhardt

Gerhardt

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Gerhardt
The judge just approved the sale of Sears to Lampert. No surprise, we all knew that was coming. But I can't wrap my head around why Lampert would run a viable company into the ground and then buy the worthless company that's so beat up now it can't survive. It's well beyond the point of no return.

At first I thought no sane judge would approve the deal, giving control to the guy who killed the company. But it was dead anyway so maybe he didn't see the harm in trying to perform CPR. Maybe it would have been better to liquidate now than prolong the suffering.

I'm obviously missing something here, so maybe if someone talks slow enough and uses monosyllabic words the light bulb might come on for me.

In the back of my mind I can't help but to think that maybe there's a pension fund or something he's hoping to raid before liquidating.
 
My cynicism on this is absolute.

I still believe that, had Sears remained independent of KMart, they'd be in much better condition. KMart was a fundamentally failed business that emerged from bankruptcy without a viable business plan, and that the only thing of legitimate value they had was a massive bundle of tax loss carry-forwards which, in turn, were valueless unless the holder could generate gains or profits against which the carry-forwards could be offset.

KMart bought Sears with junk debt, liquidated its massive owned real estate with gains erased by carry-forwards and the proceeds distributed to insiders. From that point on, it was about systematically selling off all assets of any consequence. This has been accomplished, and what remains is a final liquidation.

Sears was Amazon before there was an Amazon, and I think they could have adapted their model. We'll never know, and more's the pity.
 
I always thought it was a big shame that Sears (and Montgomery Ward) couldn't make the jump from "catalog" to "internet" retailer. They could have been the Amazon. Except for the communications media, much of the business is the same.
 
flyingron said:
I always thought it was a big shame that Sears (and Montgomery Ward) couldn't make the jump from "catalog" to "internet" retailer. They could have been the Amazon. Except for the communications media, much of the business is the same.
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I agree. I just wonder if they did not have the vision that Bezos had, and by the time they figured it out, they were too far behind the curve.

I have fun memories of the Christmas Wishbook coming every fall to my parents' house. I would go through that thing a hundred times looking at all the stuff that I dreamed of getting for Christmas. Those on this forum much younger than me won't have a clue what I'm talkin about!
 
flyingron said:
I always thought it was a big shame that Sears (and Montgomery Ward) couldn't make the jump from "catalog" to "internet" retailer. They could have been the Amazon. Except for the communications media, much of the business is the same.
Click to expand...

Thank you for saying that. I've thought that for years. There's a lot more to it now, but in the beginning the formula seemed ultra simple to me.
1. Traffic. You need people to visit the site. You need sales from that traffic. Catalog to internet seemed like a seamless transition.
2. Order fulfillment. Get the items out the warehouse door and at the customer's door in a day, 2 days at most.
3. Customer Service. Simple. Return the purchase price for items returned in new condition. You're always going to have the lowest rung trying to return used lawn trimmers at the end of the season. Pfftt..I don't care what the PC crowd says, that's not your market so don't cater to them. But legit returns - do it same day and w/o hassle.

Amazon (and later Wal-Mart) found a way to go far beyond that. But it could have been, should have been, existing retailers like Sears, JCPenney, etc.

Not too many years ago I worked for a retailer who started out in the old days as a catalog business. During the time I worked there they changed to where you could no longer place orders by phone - it had to be online. And they're thriving.

Epilogue: After I left, they began selling on Amazon, knowing it's where more and more people were going for one-stop shopping. So now they're also selling the same goods online, just with Bezos as the middle-man collecting his fee for every sale. This is no longer the mom-and-pop shop it was 40 years ago. It's a $500M business.
 
Gerhardt said:
But I can't wrap my head around why Lampert would run a viable company into the ground and then buy the worthless company that's so beat up now it can't survive. It's well beyond the point of no return.
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Perhaps he ran it into the ground so that he could buy it at a rock bottom price. Sears still has the ability to be the next big competitor to Amazon with the right person at the helm with the right team. Maybe he thinks he is that person.
 
I believe many things are about timing. Both JCP and Sears got out of catelogue sales when the time was perfect to get into internet sales.

When Sears sold their Craftsman name brand it was selling the silverware and I knew they were doomed.
 
flyingron said:
I always thought it was a big shame that Sears (and Montgomery Ward) couldn't make the jump from "catalog" to "internet" retailer. They could have been the Amazon. Except for the communications media, much of the business is the same.
Click to expand...

It’s a rare management team and board that can recognize when their successful business is about to be obsolete. There was a presentation I attended many years ago and one thing they touted was “Work to obsolete your product. Someone else is.” But when you’re making money and have ways you want to improve your current business model, it’s hard to wrap your head around fundamental changes.

John
 
He had been trying to buy the Kenmore brand off Sears for a fair while, but the board kept refusing. Anyone know if Sears still had that, now that he bought it?
 
Kenmore has been a brand of Whirlpool for several years.

My company is participating in a retail store TI for Sears right now. Much smaller and much more limited product offering, but clearly they have a business plan.
 
Stewartb said:
Kenmore has been a brand of Whirlpool for several years.

My company is participating in a retail store TI for Sears right now. Much smaller and much more limited product offering, but clearly they have a business plan.
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I'll probably feel stupid for asking this, but what is a "retail store TI"?
 
Stewartb said:
Kenmore has been a brand of Whirlpool for several years.
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Sort of how the Rigid brand name is owned by Emerson, but is in many ways a Home Depot house brand, and the cordless tools are all manufactured by TTI, who also owns, manufactures and markets Ryobi and Milwaukee cordless tools?

There apparently must be some brand recognition for the name, if they have sold private label whirlpools for so many years. And aren’t there a few other labels also in the whirlpool family?
 
jsstevens said:
It’s a rare management team and board that can recognize when their successful business is about to be obsolete. There was a presentation I attended many years ago and one thing they touted was “Work to obsolete your product. Someone else is.” But when you’re making money and have ways you want to improve your current business model, it’s hard to wrap your head around fundamental changes.

John
Click to expand...

All too common path to doom.

Have you read
yet?

If you work for a large, longstanding corporation it will terrify you.
 
When they went from quality American made tools and good quality stuff to cheap Chinese crap they sealed their fate. Too many cheaper places to get cheap junk, people didn’t go to sears or craftsman because they wanted cheap junk. Too bad, as a kid I liked sears and my friend still has and uses his dads (or maybe his dads dads) craftsman tools, used to be great stuff.
 
-KLB- said:
Sort of how the Rigid brand name is owned by Emerson, but is in many ways a Home Depot house brand, and the cordless tools are all manufactured by TTI, who also owns, manufactures and markets Ryobi and Milwaukee cordless tools?
Click to expand...
Many of the Sears Craftsman stationary powertools were built by Emerson as well. You can see a lot of commonality between them.
 
James331 said:
When they went from quality American made tools and good quality stuff to cheap Chinese crap they sealed their fate. Too many cheaper places to get cheap junk, people didn’t go to sears or craftsman because they wanted cheap junk. Too bad, as a kid I liked sears and my friend still has and uses his dads (or maybe his dads dads) craftsman tools, used to be great stuff.
Click to expand...
Craftsman tool have been, and still are, made in USA.
 
jsstevens said:
I have not, but I’m working for a 15 year old company I cofounded and part of my job is to obsolete our products.
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I work for a 100 year old company (with bleeding edge products, though) and I read that book thinking, "There but for the grace of God go I."
 
Gerhardt said:
Thank you for saying that. I've thought that for years. There's a lot more to it now, but in the beginning the formula seemed ultra simple to me.
1. Traffic. You need people to visit the site. You need sales from that traffic. Catalog to internet seemed like a seamless transition.
2. Order fulfillment. Get the items out the warehouse door and at the customer's door in a day, 2 days at most.
3. Customer Service. Simple. Return the purchase price for items returned in new condition. You're always going to have the lowest rung trying to return used lawn trimmers at the end of the season. Pfftt..I don't care what the PC crowd says, that's not your market so don't cater to them. But legit returns - do it same day and w/o hassle.

Amazon (and later Wal-Mart) found a way to go far beyond that. But it could have been, should have been, existing retailers like Sears, JCPenney, etc.
Click to expand...

It would have been very hard for any existing company to have done what Amazon did. In a nutshell:
upload_2019-2-12_15-38-49.png

Amazon kept re-investing their profit over and over and over again. Billions of dollars, year after year until they finally couldn't help but showing a profit last year.

Any other board of any other company once Revenue started being over $10b would have gone, mmm. we can start showing $100m of profit a year from our online business - WIN! Stock price increases, CEO and the board gets rich, but the company doesn't grow much more after that.

Bezos were able to control the board and kept bringing the money back to investment for 2 straight decades. An entrenched company would have had an incredibly hard time pulling that off - and ESPECIALLY Sears since their management famously didn't want to do any upgrades, modernizing or even maintenance of their own stores. "So you're telling me you want to spend billions of dollars to build a website with eleven 9's of availability, and then pay for it by allowing our competitors to also sell through it??".
 
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Kenny Phillips said:
Craftsman tool have been, and still are, made in USA.
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Uh, sorry to burst your bubble, but . ..
A little more than a year after a judge threw out a class-action lawsuit asserting that troubled retailer Sears knowingly led customers to believe their iconic Private Brand Craftsman Tools are still Made in the USA, the retailer continues to face public outcry.

Part of the mystique of the Craftsman brand was that the hand tools were proudly Made in the USA. But in recent years, Craftsman, like many tool brands, started manufacturing many of their products in China while continuing to run advertising that would lead customers to believe all the tools were still domestically produced.
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http://mypbrand.com/2013/03/27/craftsman-made-in-the-usa-manufactured-in-china/
 
Yep. I haven't seen Craftsman tools of recent vintage being any better than, say, Kobalt. Certianly no reason to pay a premium for them. The lifetime no-hassle replacement thing ceased being a draw when I had to use it more and more often to replace tools that broke when I was using them.
 
Salty said:
I’ve always wanted on of those.
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I keep seeing ads on TV for Henry lever actions, and I'm starting to lust after one. I haven't bought a new firearm in almost two years so I'm falling behind in my goal to collect the entire set. Maybe it's time.....
 
DaleB said:
Yep. I haven't seen Craftsman tools of recent vintage being any better than, say, Kobalt. Certianly no reason to pay a premium for them. The lifetime no-hassle replacement thing ceased being a draw when I had to use it more and more often to replace tools that broke when I was using them.
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Ha!

I have a kobalt 3/4 ratchet that I got because the handle was super comfy, well it’s more precise than the new craftsman, and despite me thinking I’d break it, things been kicking around for a few years.

So I’d vote for kobalt over new craftsman
 
Sears hasn't been a retail play for years. It is quite the real estate play though. At roughly $7 million per owned anchor property, those alone are $2 Bilion market value.
 
Fallsrider said:
I have fun memories of the Christmas Wishbook coming every fall to my parents' house. I would go through that thing a hundred times looking at all the stuff that I dreamed of getting for Christmas. Those on this forum much younger than me won't have a clue what I'm talkin about!
Click to expand...

If you want a trip down memory lane, visit: http://www.wishbookweb.com/the-catalogs

Not every year is on there, but a lot are. I grew up as a kid/teenager in the 70s/80s and went through some of those years' Wishbooks and found several items in there that I had gotten as toys or gifts as a kid.

I even still have an old Sears LED alarm clock that I use to this day that I found in the 1979 Wishbook.
 
Bezos/Amazon had the 'nads and patience to loose money for a long time. A lot of money. A very long time.
 
JOhnH said:
Perhaps he ran it into the ground so that he could buy it at a rock bottom price.
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I've seen plenty of failing businesses "fight for survival" for years so (IMO) the executives could stay on their gravy train until the bitter end. A friend worked for a textile manufacturer in the '70's which did a leveraged employee buyout so one of the big corporate raiders wouldn't buy and dismantle the business. As soon as the first payment on the note came due, they sold part of the business. Then, lather, rinse, repeat for subsequent payments on the note.

Ultimately the company's management dismantled the business over time, just like the corporate raider would have done (he'd have done it faster). But the folks in the very senior positions kept their high paying jobs for another 5 years or so, when the raider would have let 'em go on about day 2.
 
Ghery said:
Well, our previous refrigerator was a Kenmore - made by LG. Never again, short life expectancy junk now.
Click to expand...

You know what I don't get about the new refrigerators on display? The ones where you can surf the internet from a display on the front of them. Why is that even a thing?
 
Gerhardt said:
You know what I don't get about the new refrigerators on display? The ones where you can surf the internet from a display on the front of them. Why is that even a thing?
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Some people use shopping list apps from web sites. Probably some doing their Wal-Mart or Kroger curbside pickup orders while right there looking through the fridge. Some people like internet hosted recipie sites. If I did any of those, I would probably set up a cheap TV screen and raspberry pi solution instead, but I’m sure some see being built into an appliance and not taking up extra space as a bonus.
 
flyingron said:
I always thought it was a big shame that Sears (and Montgomery Ward) couldn't make the jump from "catalog" to "internet" retailer. They could have been the Amazon. Except for the communications media, much of the business is the same.
Click to expand...
Yep, they invented it and then forgot. When I lived in the mountains, Wards was the game in town. Small showroom to see likes, appliances, etc.
 
The first gas-powered lawn mower I pushed around was a Monkey Wards.

I'm pretty sure that's the same mower my brother took apart when he was about 11-12 yrs old. And by "took apart", I mean he had it all the way down to the piston rings laying on the garage floor. He had it back to together and running again before our dad got home. Now he fixes cars.
 
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