
Sears has another chance to avoid closing down - craigferg501
https://www.cnbc.com/2019/01/06/sears-rejects-eddie-lamperts-bid-to-save-company-will-liquidate-.html
======
wombatpm
Sears had everything. Global supply chain, check. Top notch distribution
operation, check. System and infrastructure to take orders and handling
billing, check. Name recognition and established customer base, check.

They threw it all away, ending catalog operations in 1993 a year before
Amazon.com opened in 1994. They owned part of Prodigy in 1984! Yet somehow
thought it was a better move to expand into bigger box retail. Anyone remember
The Great Indoors from 1997? It was going to have huge potential.

What a waste.

~~~
xigency
I thought this as well until I heard a counter-point [0] which was very
convincing.

The reason Amazon is successful is not because you can shop online (from a
catalog) and receive items in the mail. The reason Amazon is successful is
because you can do those things and receive your items within two days. Before
Prime existed, Amazon had very quick fulfillment, and after Prime two-day it
became even better.

The Sears catalog ended in 1993 but the Sears Wish Book continued to exist
after that. In 1999 I remember ordering something from the Wish Book required
3 weeks to receive the item. If they didn't have the desire to improve that,
then they would never have become Amazon.

> If anything, Sears was the worst positioned to become Amazon. What they had
> was just completely wrong and more of a burden than a benefit. Had they
> tried to retool with their massive catalog it likely would have been a
> disaster. Amazon had a real benefit starting small with just books which let
> them learn the ropes on the cheap. [0]

I think this is especially relevant here on HN because it shows how startups
are required to solve problems. For many problems, a behemoth company has no
reason to improve, and a lean startup can rush to a solution faster in many
cases.

[0]
[https://np.reddit.com/r/news/comments/a6nwj7/sears_bankruptc...](https://np.reddit.com/r/news/comments/a6nwj7/sears_bankruptcy_court_oks_25_million_in_bonuses/ebwphf4/)

~~~
CoolGuySteve
Not to be snarky, but there needs to be a name for selective amnesia when an
idea that seems obvious in retrospect is ignored later on.

In this case, the thing that made Amazon so great, before Prime existed, was
that it had the "Things you might also like" section.

AFAIK it was one of the first online stores that used machine learning to
recommend new and related items you didn't realize you wanted and to have user
ratings for each item.

It was especially powerful for books/movies/music just due to the sheer volume
of different titles that makes it hard to find new content you might like.

There are a lot of retailers that had the logistics and infrastructure for
online sales, but the kind of marketing that Amazon did for up-selling was
wholly new and something that could only be done online. So even if Sears
could do it, it wasn't obvious back then to anyone that they should do it or
how to do it.

Even now, the Walmart and Target web stores recommendations are just ok
compared to Amazon. Even eBay seems less comprehensive in its recommendations.

~~~
bpicolo
Is that really a primary growth factor? I've never once acted on an Amazon
recommendation, and it's always felt almost entirely useless - "you just
bought a vacuum, here's 15 more vacuums just in case you're a vacuum-obsessed
lunatic"

~~~
rhacker
That, and the ONLY analytics based feature I used was the "After viewing this
item most people purchased" section WAS THE ABSOLUTE BEST for shoppers. It
made me feel like I could look at a vacuum, but then be directed to the BEST
one. It was like, I'm doing all this crazy research and stuff, but how could a
billion other people's research help me here. It seems like they run
experiments now where once in a blue moon you might see that section.

I know why they got rid of it - and Amazon has this problem all over the
place, but some products just sit, while others, with really no difference
just fly off the shelves.

~~~
davidu
This feature still shows up almost constantly for me... there are a few
flavors (some of which appear contemporaneously on a single product page for
me) including "after looking at this item people purchased..." and "similar
items to this item..." and "people who bought this also bought..."

~~~
Y_Y
Wouldn't it be nice if you could just choose what information to get, unless
of this dice-rolling and analytics and cookies approach?

------
3pt14159
Ahh, I came to this thread far too late, but hopefully this won't be missed.
In 1980 The Yankee Group (a tech consultancy) reached out to my dad to help
them understand how Sears could respond to the growing tech phenomenon. For
reasons too long to get into, Gates and my pops (a Canadian) knew each other
and were even both covered in The Intelligent Machines Journal out of Palo
Alto in the same issue during the waning days of the '70s.

So my father and these Yankees told Gates that Microsoft should meet with
these clueless Sears guys, since they'd probably move a number of computers
over the next couple years and it would be helpful for them to think
"Computers? Microsoft." So he begrudgingly did.

In the meeting someone brought up investment and Gates said they could have
20% for $8m. You never know how all these things go. Sometimes someone you
never heard of tells you something true and your relative position stops you
from seeing it.

~~~
confiscate
60 minutes interview with a young Jeff Bezos, 1999

[https://youtu.be/VuI-ss5aQU8?t=629](https://youtu.be/VuI-ss5aQU8?t=629)

"how do you view that phenomenon [laugh] that Amazon is worth more than
Sears!? [condescending laugh]"

"a couple of geeks [laugh laugh], who sketched out some software, could
destroy Sears Roebuck [laugh]"

same 60 minutes "expert", telling young Bezos, Amazon stock was wildly
expensive

[https://youtu.be/dTxuzW9RAO8?t=20](https://youtu.be/dTxuzW9RAO8?t=20)

"Amazon is worth more than a major industrial company, like Texaco ... that
didn't blow your mind?"

~~~
samatman
In 1999, AMZN peaked ar $80.

Two years later it was trading at $10, and didn’t recover until 2007.

The interviewer was right; Amazon was over valued.

~~~
lostlogin
Or was it radically undervalued in 2001?

~~~
samstave
I'd say it wasn't, because AWS didn't exist to be undervalued as a business
factor.

------
tw04
Sears died because of Lampert, that's the beginning and end of the story.
While they were far from perfect, post-Kmart "acquisition" both the service
and stores became garbage and he used Sears as a personal slush fund.

~~~
MetalGuru
So instead of investing in actually making Sears better (like Target and
Walmart did), he thought it was a good idea to spent nearly all of Sears' cash
reserves buying back its shares (at prices as high as $170)? Now shares are
$0.33. Is he just an incompetent buffoon, or did this strategy line his
pockets? For example, was he buying shares owned by ESL with Sears' money? If
so, that's highly unethical. Seems par for the course with Wall Street.

~~~
DontGiveTwoFlux
I wonder if any company in a similar position has just done a total
liquidation and turned over all cash as a one time super dividend. That seems
like the honest and fair way of doing it. Though it's probably less lucrative
than a debt-fueled stock buyback and dump strategy.

------
mikestew
Lampert might have "saved" AutoZone, which AFAICT was the feather in his cap
to make him "the next Warren Buffert", but if you asked me I'd be hard-pressed
to tell you how the shopping experience changed. I speak from ignorance, and
the laziness that prevents me from researching deeper, but I assume he did
some accounting tricks, sold a few inefficient assets, etc. But as the owner
of some old vehicles and a frequent shopper of auto parts stores, I couldn't
tell you when Lampert took over AutoZone based on any changes to the shopping
experience. So when it comes time for a new WhatsIt for the '81 VW, I'd just
as soon go to the local NAPA because they'll probably actually have the damned
thing.

This brings me to Sears: did he ever shop at his own stores, or was he busy
pouring over the books and figuring out new ways to implement corporate
versions of _The Hunger Games_? Because the shopping experience at Sears was
never great, IMO, and it only got more depressing when Lampert took over. Tool
quality went to shit, appliance quality went to shit, and the shopping
experience sucks. You can juggle books all you want, but that won't get
customers in the door. And if I do make it in the door, the lack of service
and the dingy store will ensure that I never return.

So in summary, I argue that Lampert either got lucky with AutoZone, or what
worked there did most certainly not work for Sears because at the end of the
day customers ask themselves, "do I want to shop there?" And Sears in recent
years gave customers very little reason to say, "Yes".

As a sidenote, WTH is he willing to throw good money after bad with his $4.4
billion bid? I'm stumped as to what rabbit he thinks he can pull out of that
hat.

~~~
stronglikedan
Ah, good ole' NAPA, where you pay twice as much for half the quality (in their
house brand anyway). At least, that's why I avoided them like the plague a
quarter century ago when I was building muscle cars. Also, they always seemed
to prioritize their garage delivery service over their walk-in customers.
Although,that _was_ a long time ago, and perhaps they've gotten better over
time.

~~~
dsfyu404ed
>Ah, good ole' NAPA, where you pay twice as much for half the quality

It's all about knowing who makes the part that goes in the branded box. At
present their "blue boot" ball joints are the only way to get Spicer ball
joints.

>Also, they always seemed to prioritize their garage delivery service over
their walk-in customers.

Varies by location. It's a franchise model after all. Napa uses probably the
longest leash of all the chain parts store franchises.

------
ben1040
My first online shopping experience was with Sears over Prodigy in 1991.

You could browse online, or order from the paper catalog (which is more likely
what you'd do because NAPLPS graphics didn't lend themselves well, or at all,
to product depictions). Then they'd ship to you, or you could go to the order
pickup area at your local Sears store.

They had a touchscreen kiosk there where you'd punch in your order number, and
be directed to a cubby where your stuff was waiting for you.

They had today's "buy online, pick up in store" thing, but nearly three
decades ago.

~~~
ams6110
Being too early is as bad as being wrong.

~~~
zymhan
The point isn't that they were too early, it's that they gave up too quickly.
Buying online and picking up from a store really isn't that advanced of a
concept.

~~~
reaperducer
_Buying online and picking up from a store really isn 't that advanced of a
concept._

You're right. Service Merchandise build an empire around it, just by mail or
phone instead of computer. Other stores did it, too. JCPenny comes to mind.
Even some local and regional chains.

Amazon and others think they've invented something. But once again, it's just
SV re-inventing something that worked last century.

~~~
logfromblammo
Amazon introduced the ability to seamlessly and automatically blend
counterfeit goods into their supply chain, from sellers that you never heard
of before, and may never encounter again.~

But recall that Amazon started with books. The catalog for books is the size
of the card catalog that used to be at your library. A row of cabinets, filled
with rank and file of drawers, each filled with index cards. One could not
ship out paper catalogs, listing every book, to every book-buying home. But
delivering the catalog via the internet--and taking orders via web form rather
than mail, fax, or phone--made that mail-order business viable. And starting
from books, adding other items to the system was just scaling. If you can
handle all the ISBN numbers in existence, adding every other consumer product
isn't that much more.

Amazon made a system that allows customers to order every item from every
product catalog, from the same interface accessible form every couch, and--
most importantly--captured their market share early.

But now that omnibus e-commerce exists, competitors are going to chip away
until their early-mover advantage is gone, and all they have left is their
innovation since then. Aliexpress and Wal-Mart are going to hammer them from
the price side, and individual stores that can actually keep the counterfeits,
barely-suitable, and white-label garbage out of their catalog will hit them
from the quality side.

Amazon's innovation was _bigger catalogs, easier ordering_. And their early
patents are expiring now. They didn't build the other pieces they needed for a
120-year business while they had the protection--like searching and filtering;
honest, scam-resistant ratings; and advertising and recommendations. So they
have this huge catalog that presents as a giant wall of useless crap that
_might_ have the thing you actually want _somewhere_ in it, and not
necessarily at the best price. Unlike Sears, they still have enough money in
the bank to turn it around before it's too late. Probably not the leadership,
though.

~~~
RhodesianHunter
Agree wholeheartedly with everything you said except:

> They didn't build the other pieces they needed for a 120-year business while
> they had the protection

I would argue they did with things like AWS.

~~~
ben1040
Similarly (or more importantly, even) is they've now built out a proprietary
fulfillment and last mile delivery infrastructure that runs parallel to
USPS/UPS/etc.

Any new entrant is going to have to compete with Amazon on shipping cost/time.
Yet Amazon can do it using their own distribution and sorting hubs, from which
gig workers use their own cars to do the deliveries.

~~~
chihuahua
Based on my own experience with Amazon's own AMZL delivery service, it's a big
advantage for their competitors who don't subject customers to this
experience.

~~~
mjevans
The only real positive side to this infrastructure are the Amazon Lockers that
are paid for as part of the shipping service and actually at good locations
most of the time. (While later movers like UPS and FedEx have stuck their
lockers at SUPER ANNOYING locations).

It's really too bad the post office can't just setup something like this at
the actual post-offices and be open for any carrier for a small fee. That'd
solve a ton of last mile problems.

~~~
erikpukinskis
I don’t understand why Amazon hasn’t offered lockers to be installed at your
home, for a fee. Maybe the cost would have to be too high, but there are
savings in getting rid of redelivery costs and “it never arrived” reorders
that Amazon eats.

------
rossdavidh
Once, I believe it was in the late 90's, my wife showed me the cover of a
business mag. It showed the CEO of Sears, and also a young guy with a
messenger bag and a Misfits pin. "Sears", with an arrow pointing to the CEO.
"Sears.com" with an arrow pointing to the youngster.

The thing is, she knew that youngster, and he really did work at Sears, for
their webstore. He wasn't the only guy, but it was apparently pretty close.
Other than getting on the cover of that magazine, my understanding is he got
rather little access to top management, and he certainly didn't get to set
strategy on things like pricing and shipping. Sears, like a lot of other
incumbents, could neither understand the New Thing, nor turn over enough
control to the people who did (in part because the people they hired were too
young and inexperienced in retail to trust with t hat), and that is why they
failed, when as a catalog company they should have been well positioned for
the comeback of ordering things delivered to your home.

~~~
ignoranceprior
> Once, I believe it was in the late 90's, my wife showed me the cover of a
> business mag. It showed the CEO of Sears, and also a young guy with a
> messenger bag and a Misfits pin. "Sears", with an arrow pointing to the CEO.
> "Sears.com" with an arrow pointing to the youngster.

It was from Fortune in November 1999. Here's an image of the cover:

[https://twitter.com/opinion_joe/status/998689983757209607](https://twitter.com/opinion_joe/status/998689983757209607)

Better quality: [https://backissues.com/cgi-
bin/backissues.cgi?full/FU1999110...](https://backissues.com/cgi-
bin/backissues.cgi?full/FU19991108.JPG)

~~~
rossdavidh
Thanks! Your google-fu is better than mine, I admit it.

~~~
tern
[https://www.youtube.com/watch?v=EYqZJrGV_tc](https://www.youtube.com/watch?v=EYqZJrGV_tc)

------
alexhutcheson
Neil Saunders wrote a good Twitter thread last week about how mid-scale US
department stores don't execute the basics of retail very well:
[https://twitter.com/NeilRetail/status/1079785924966445058](https://twitter.com/NeilRetail/status/1079785924966445058)

Others have pointed out that Target seems to do a much better job with
organization, presentation, and flow. Not coincidentally, it seems to be
performing much better than legacy department stores that historically
targeted the same class of shopper, like JCPenney and Sears.

Brick and mortar isn't as dead as commentators sometimes present it, but the
increased competition is certainly weeding out dead wood that managed to
persist for decades based on natural local monopolies and oligopolies.

~~~
everythingswan
Good thread, found it really interesting!

I am processing some research on DICK's Sporting Goods, 750 stores and 90% are
their core brand. I knew the reality was something along these lines but just
didn't expect the % to be so small: "The Company's eCommerce sales penetration
to total net sales has increased from 2.8% in fiscal 2010 to 10.3% in fiscal
2015."[1]

It's certainly growing every year for them, easy to see since it's a public
company, but not at a tremendous rate like my news bubble or profession would
have me believe. It furthers your point that brick & mortar are certainly not
dead, or even dying, since many people still shop in-store.

Of note, a good portion of their 10k was devoted to omni-channel experience,
which is the thinking that customers are customers and not defined by online
or offline alone--they use both. Omni-channel strategies seem pretty basic at
this point but also well worth their investment.

[1]
[https://www.sec.gov/Archives/edgar/data/1089063/000108906316...](https://www.sec.gov/Archives/edgar/data/1089063/000108906316000107/dks-10k_20160130.htm)

~~~
degenerate
Sport gear is very hands-on, so it makes sense to go into the store to choose
your next running shoe / tennis racket / hunting rifle... instead of buying
the wrong one online and having to return it.

~~~
everythingswan
Absolutely. And since they stock different brands, it's even more important to
get the sizing right. I remember reading shoes and apparel made up a high
portion of their gross sales.

In general, my experience is that the higher the price, the longer and more
intense the buying cycle is. It's not ground-breaking to think that but I also
think it will indicate the last retail stores to bend at the will of online
demand: cars, boats, engagement rings, etc.

------
Panino
Sears is a macro-example of the phrase, "The market can remain irrational
longer than you can remain solvent." Seems like this company has been walking
dead for years.

When the October news hit that Sears was going out of business, my wife and I
used up all our Sears points (kind of like airline miles) to get tons of free
food from Kmart. Then Sears kept just giving her points so we kept getting
free stuff. How on earth did Sears stay in the game so long, and what game
were they even playing? Sometimes I wonder if we inadvertently triggered some
backdoor left by an employee to get as much free stuff as possible. Part of me
assumes the bonanza will now intensify.

~~~
LeftTurnSignal
I had a friend who worked at Kmart during the Sears transition and stayed
until it closed a few years ago (or so). He worked there for maybe 12 years
total, and maybe 7 of that as a manager.

The first week after he started there, he started to wonder how they could
stay in business. He said most of his time (in the 12 years) was spent walking
around, cleaning, organizing or just watching TV just because there wasn't
anything else to do, and no one coming in.

For years, it was a ghosttown in there. I would go after work (5-6pm), and
still not see a single other customer. I know it was a smaller Kmart, but they
still had some new items show up, and always had some employees around. Must
have made enough to cover most of it's expenses, or been too small for Sears
to notice.

/just looked it up. That Kmart closed in Jan of 2017.

~~~
jandrese
My local K-Mart was never packed, but it was never empty either. And there was
always a line at the registers, mostly because they had the slowest checkout
system on planet Earth. Some parts of the store looked like a Mad Max set like
the tools area, but other parts managed to alright like the clothing section.

It was still my backup shopping choice if Target didn't have something I
needed.

------
bluedino
How much of Sears's demise was due to Walmart? It's not like retail completely
died.

The home improvement chains hurt them too, once they started selling tools and
appliances.

We bought everything at Sears in the 80's. Electronics (including computers),
appliances, toys, clothes, tools, lawn and garden...

Was Sears too 'friendly' with their suppliers? When I worked at Sears at the
end of the 1990's (the store was a ghost town then), many of the long-time
employees were making pretty decent money. Way more than people at Best Buy,
Target or Walmart made. Plus actual benefits. The must have had huge legacy
costs, especially at the higher levels.

~~~
lotsofpulp
It's a good example to those that claim companies should pay employees
liberally. Unless you're in a niche that people are willing to pay a margin
for or serve upscale customers who also don't mind paying margins (Costco,
Whole Foods, Nordstroms, Apple, etc), then you're going to lose business to
competitors offering lower prices.

In this situation, the only way to improve the well being of those whose labor
isn't as valuable is to restrict their supply, either by educating them to
give them other valuable skills or providing paid leaves so they can go on
vacations and forcing employers to hire more people. All of this extra wealth
for those at the bottom would, of course, have to come from the margins those
at the top are earning.

~~~
wil421
Costco is an upscale place to shop? I’ve never seen them lumped together with
Whole Foods or even Apple.

Edit: Wow I didn’t realize Costco’s profit margin was higher than Whole Foods,
Wal Mart and almost a full percent above Kroger’s.

~~~
bluGill
They are. You need to have a good amount of extra money to afford the
membership and the cost of buying 6 months of toilet paper in advance. Those
are cheap items that you will need, if you are not poor you probably don't
even think about it. However when you are poor it doesn't matter if it is
cheaper or not to buy in bulk because you don't have the cash to afford it.
(you also are unlikely to have the storage space for all of that)

Costco serves the upper class.

~~~
melq
Membership at Costco is like 60 dollars a year. Not saying it's doable for
everyone but its hardly something 'you need to have a good amount of extra
money' to afford.

~~~
dragonwriter
> Membership at Costco is like 60 dollars a year. Not saying it's doable for
> everyone but its hardly something 'you need to have a good amount of extra
> money' to afford

If you are poor to the point of relying on public assistance to meet basic
needs, an extra $60 up front even if it will pay off over a year means
foregoing other essential expenses now.

But the bigger cost in many parts of the country is the space needed for
inventory to maximize the benefit of bulk purchasing. Sure it works well for
my family, but we live in a decent sized suburban home with an second
refrigerator, and a storage closet converted for additional pantry space.

~~~
melq
Why do you think I was talking about people who are poor to the point that
they are relying on public assistance? Did you gloss over the part where I
said 'not saying it is doable for everyone'? You even quoted it. This thread
was debating whether or not Costco is an 'upscale' place that only the well to
do can afford, not whether or not Costco is an option for people on public
assistance.

------
neurobashing
My parents were young, and broke, and opened a Sears "charge card" to buy
their wedding rings. "Craftsman, so it'll last forever!"

I mean, intellectually, I get why Sears is going away, but it still kinda tugs
at the ol' heartstrings a little, you know?

~~~
Sargos
This makes me wonder... what happens if you open a Sears card (yesterday) and
max it out with all kinds of fun stuff and then Sears goes out of business?
Does someone come after you for money?

~~~
bluGill
Yes, debt collection is big business and someone will happily buy your balance
for the privilege of getting you to pay it to them.

------
dang
The headline has changed, presumably because the story has changed, so we've
updated the title above. Originally it was "Sears plans to shutter after 126
years in business".

~~~
marcrosoft
Media manipulation is likely at hand.

~~~
unknownkadath
Or there was a last minute reprieve after the article was posted.

Not everything is malicious, friend.

~~~
lostlogin
The URL is old headline - strange not to post a new story with some sort of
addendum on the old one. I’ve added spaces below to prevent the URL
shortening.

https: //www.cnbc.com /2019/01/06/ sears-rejects-eddie-lamperts-bid-to-save-
company-will-liquidate-. html

------
erickhill
Sears was my go-to place for tools for years. Then, at some stage, the quality
noticeably changed and it started to feel like a cheap knock-off, like what
happened to Stanley Tools ages ago.

But I did very much appreciate their return-tool policy. I used that a few
times. It was a great customer loyalty tactic.

~~~
bluedino
At some point, cheaper Chinese tools became good enough. When I was a kid I
remember my dad would curse cheap imported wrenches and tools. Now, he buys
75% of his stuff at Harbor Freight.

Sears ended up going down in quality while trying to keep their brand names
and higher prices. Surprising it didn't work out.

~~~
ams6110
At least at Harbor Freight you know what you're getting and it's priced
accordingly. Craftsman tools were expensive, at one time deservedly so but by
the end the were just riding on the name to put a high price on cheap imported
tools.

------
throwaway5752
I think this is now incorrect: [https://www.cnn.com/2019/01/08/business/sears-
future-bankrup...](https://www.cnn.com/2019/01/08/business/sears-future-
bankruptcy-delay/index.html)

yup:
[https://news.ycombinator.com/item?id=18858494](https://news.ycombinator.com/item?id=18858494)

~~~
excalibur
I wish I could upvote this more than once. Not sure if changing the link would
be appropriate, maybe a mod could put a sticky at the top of the thread?

Edit: No need to change the link, the article has been updated to reflect the
changing situation. Can a mod please change the title to match? :)

------
OldHand2018
The huge Sears campus anchored a community on the west side of Chicago for
nearly 70 years, and then they built an HQ2 with a fancy downtown tower (the
world's tallest building) in the early 1970s. Having two campuses really cost
them a lot of mojo, and by the early 1990s they reconsolidated into a new
campus in the far-flung exurbs. It didn't save them and shall now be their
final resting place.

It's a good thing other large companies have learned from this and will not be
repeating their mistake.

~~~
dangus
It seems like a really weak correlation to say that location, quantity, or
style of office campuses has anything to do with company success.

------
commonsense1234
Evolution and Death

"The most important component of evolution is death. Or, said another way,
it’s easier to create a new organism than to change an existing one. Most
organisms are highly resistant to change, but when they die it becomes
possible for new and improved organisms to take their place.

This rule applies to social structures such as corporations as well as
biological organisms: very few companies are capable of making significant
changes in their culture or business model, so it is good for companies
eventually to go out of business, thereby opening space for better companies
in the future."

— John Ousterhout, Stanford professor

------
ineedasername
This is really a shame. They made missteps in the mid-late 90's, but might
have remained viable had they not had a CEO these past years that was engaged
in a process of self-dealing to his other personal financial interests at the
expense of Sears [0][1][2]

[0][https://prospect.org/article/how-sears-was-gutted-its-own-
ce...](https://prospect.org/article/how-sears-was-gutted-its-own-ceo)

[1][https://www.businessinsider.com/sears-ceo-will-
pay-40-millio...](https://www.businessinsider.com/sears-ceo-will-
pay-40-million-to-settle-shareholder-lawsuit-2017-2)

[2][https://www.usatoday.com/story/money/2018/04/24/sears-
holdin...](https://www.usatoday.com/story/money/2018/04/24/sears-holdings-ceo-
eddie-lampert-ethical/542284002/)

------
lukasm
"The most important component of evolution is death. Or, said another way,
it’s easier to create a new organism than to change an existing one. Most
organisms are highly resistant to change, but when they die it becomes
possible for new and improved organisms to take their place.

This rule applies to social structures such as corporations as well as
biological organisms: very few companies are capable of making significant
changes in their culture or business model, so it is good for companies
eventually to go out of business, thereby opening space for better companies
in the future."

— John Ousterhout, Stanford professor

------
Fricken
I last went to Sears a couple years ago for some vacuum cleaner bags. I hadn't
been to Sears in years, but something was telling me that Sears was the place
to go for vacuum cleaner bags. The vacuum cleaner salesman looked like he
belonged in the waiting room in Beetlejuice, but he was very helpful, and he
sold me an 8 pack of vacuum cleaner bags. He knew what type of vaccuum cleaner
bag I needed before I had a chance to describe to him my vacuum cleaner. In 2
years I'll need another 8 pack of vacuum cleaner bags, and with Sears out of
the picture, I don't know what to do.

~~~
rossdavidh
Well that sucks.

[hahaha! get it? "sucks"? like vacuum sucks? hahaha]

[ahem]

~~~
rossdavidh
I so knew I was getting downvoted for that...

------
Zelphyr
This is sad for such a well-known brand. I have such fond memories of their
Wishbook catalog that came out around the holidays every year. I would flip to
the toys section and dream. My grandparents even had a years old Wishbook in
our toy box at their house that me and my cousins would look at every time we
went over there, Christmas or not.

But everything dies. It must. It has to in order to clear the way for
something else that will advance the species. That's one of the many reasons
why "Too Big To Fail" is such a bad idea. Sure, letting all the banks fail at
once was probably not the best course of action. But we needed to take a good
look at how to structure them so that their inevitable death wouldn't take out
the whole system.

Sears dying, thankfully, won't do that at least. And if anybody has a
mid-1970's Wishbook they want to part with, hit me up.

~~~
sizzzzlerz
I go back a bit earlier, remembering the Christmas catalogs in the 60s and the
huge number of pages of toys. I still remember drooling over a James Bond
Goldfinger kit with the Aston-Martin with ejection seat and rotating license
plates and the laser table intended to cut Bond in half. My parents didn't get
it for me, knowing I'd probably be bored with it in a few weeks.

So, it is true we boomers didn't always get everything we wanted.

------
bane
Meanwhile, in an alternate universe...Sears saw the coming of the Internet,
put revived their dormant catalog business and put it on the web gaining a
first to market mover advantage over nascent on-line bookstore Amazon. Fast-
forward to alternate 2019 and Sears is one of the largest internet companies
on the planet after a painful early 2000s where they shed 70% of their brick
and mortar retail presence in favor of a distribution center model to service
their still growing on-line retail operations....

Sears Airlines, once just a rapid cargo mover for the company starting
offering bottom rate global flights for passengers...which gives them another
venue to push their catalog...in flight sales.

Sears Shows, ready to launch in Q3 2019 is expected to be the second largest
on-line Television and Movie delivery network on the planet with many shows
featuring Sears exclusive brands in them.

Sears Craftman brand, already the largest 3d Printer manufacturer, starts
offering educational discounts to middle and high school students.

SearsNet, once a staple of 80s and early 90s era stores, revived like the
catalog and rebranded from the Prodigy online service, starts to finally offer
a new service called "Computers in a Cloud" where consumers can rent computers
over the internet and run arbitrary programs on them. This is leveraging spare
capacity in Sears' service oriented computing investments, often housed in old
Sears warehouses and properties that were no longer useful as retail spaces,
but could be reconfigured as compute hosting centers.

Highly anticipated, next year's unveiling of the Sears Car, built using
Craftsman tools and easy to drive. It promises to combine the latest in
electrical vehicle technology with the comfort of corinthian leather.

------
jonathankoren
BREAKING

The bankrupcy judge says if ESL can deposit 120 million by tomorrow, then it
can compete in the auction against other liquidators, and keep the company
open.

[https://www.cnbc.com/2019/01/08/chairman-eddie-lampert-to-
ge...](https://www.cnbc.com/2019/01/08/chairman-eddie-lampert-to-get-another-
chance-to-save-sears-sources-say.html)

------
w8rbt
I wonder if this will impact the small Sears Home Town stores. These are great
and I'd hate to lose them.

    
    
       http://www.searshometownstores.com/

~~~
macintux
Those aren’t impacted. A separate company.

[https://www.eastidahonews.com/2019/01/biz-buzz-amid-sears-
ba...](https://www.eastidahonews.com/2019/01/biz-buzz-amid-sears-bankruptcy-
some-local-stores-will-remain-open/)

------
8bitsrule
Many such businesses have sunk into oblivion in the past century. They were
started by hungry go-getters; their well-oiled machinery was handed to much-
less hungry people who made poor choices in the face of heavier competition.

The story of Sears vs. Ward ("By the end of the 1930s, Montgomery Ward had
become the country's largest retailer") is full of insights. (I was surprised
to learn today that 'Wards' is still an online retailer.
[https://www.wards.com/](https://www.wards.com/) )

~~~
slim
Got this hilarious text when accessing it from Tunisia :

Montgomery Ward

Montgomery Ward is based in the State of Wisconsin in the United States of
America and operates solely in the United States. We do not market, sell, or
deliver products outside the United States. This Website is for use only by
persons located in the United States.

Montgomery Ward makes no claims that the Website or any of its content is
accessible or appropriate outside of the United States. Access to the Website
may not be legal by certain persons or in certain countries.

If you have any questions, please contact Customer Service at 1-888-777-6333.

------
chipotle_coyote
While I've read the various arguments over the last year or so about how Sears
_really_ wasn't terribly mismanaged by Eddie Lambert, the dingus who bought it
and K-Mart in the mid-2000s, I continue to believe that he bears a huge share
of responsibility for the company's collapse.

Yes, brick-and-mortar retail is in trouble. Yes, all department stores are in
various stages of decline. But Sears fell very hard and very fast, and made
uniquely terrible decisions like "we don't need to invest in infrastructure
and upkeep because we have a great loyalty program" and "our various
departments will do better if we make them fight one another for ever-
decreasing resources" and "hey, we'll make some quick short-term profit if we
sell off our world-famous captive brands like Kenmore, Craftsman, and Diehard
that have literally brought people into our stores for decades."

Sears should really be in at _least_ as good shape as competitors like
Dillard's, Nordstrom's, Best Buy, or even Macy's -- the latter of which is
arguably _not_ in good shape, but for all their faults, they haven't been
doing the corporate equivalent of bashing themselves in the face with a big
rock for ten years.

------
jackfoxy
Kenmore appliances and Craftsman tools. Maybe the appliance quality suffered
recently. I don't know because our 30 year old washer and dryer still work.
Appliances were also built to be repaired, and there was a full catalog of
parts you could order through Sears. Craftsman tools were near-professional
quality. I'm sure lots of "pros" actually had some in their toolboxes.

I see the Craftsman brand has been controlled by Stanley Black & Decker for
almost 2 years
[https://en.wikipedia.org/wiki/Craftsman_(tools)](https://en.wikipedia.org/wiki/Craftsman_\(tools\))

Kenmore is controlled by a subsidiary of Sears...wonder what will happen.
[https://en.wikipedia.org/wiki/Kenmore_(brand)](https://en.wikipedia.org/wiki/Kenmore_\(brand\))

------
euvitudo
When the local Sears was about to close up shop, the kids they hired to help
with the closing were playing Marco Polo over the store intercom. Eventually
the person in charge came over the intercom and told them to cut it out. Was
the only thing I enjoyed while in that store at the time.

------
roadkillon101
Brick and Mortar retail has to adapt and change with the technology and the
times. Sears COULD have integrated retail with online shopping IF they
remembered to focus on what ONLINE couldn't deliver. Brick and Mortar retail
isn't going away for those who understand it's real value. It has to focus on
what the online business can't do... customization of products, personal
service and relationship building. If their salespeople became consultants and
the products they sold were better suited for customization, they would have
built a LOYAL customer base that needed their expertise.

------
xivzgrev
I had some involvement with sears holding back in 2006-2008, and I remember
thinking why were they selling all these clothes? Who the F buys clothes at
sears?? It’s going to die of irrelevance. Cut it down to the Kenmore /
craftsman brands that actually are unmatched by anything at target, Walmart,
or Amazon, and build an awesome services biz supporting.

My biggest surprise is they managed to survive this long. At some point I
realized it was a money grab by the CEO, lose money today, get valuable real
estate for years to come.

------
ryanmercer
I heard on a podcast this morning an ad stating 'Buy Craftsman tools at Lowes'
and was like "Wow. Just wow." and yesterday I saw where Macy's is closing a
store here in Indy and K-mart is also continuing to close stores.

I remember when malls had pet stores and arcades and Service Merchandise (oh
man, entering stuff you wanted to buy into those terminals haha) now you buy
everything from Walmart and from the comfort of your couch on Amazon.

------
mikequinlan
The article has been updated and the current title is 'Court allows Chairman
Eddie Lampert another chance to buy Sears, pushing off decision to shut
stores'.

------
oarabbus_
I thought Sears went out of business like 5+ years ago

------
neovive
Even without the physical locations, the Sears brand will likely persist
through the Kenmore brand and Sears home services.

~~~
ams6110
What is the point of Kenmore now? They were never their own product, just a
re-badged Amana, Whirlpool, or GE (variously) appliances.

------
grendelt
I truly don't understand what's in this for Lampert. Why does he keep trying
to resuscitate the company he hastened to its deathbed?

How does him offering $4.4B benefit him personally? That seems like
pride/hubris/denial to think he could ever recoup that money or pull Sears out
of the condition he put it in.

~~~
JTTR
The scuttlebutt is that as the primary creditor, he's likely to get the lions
share of Sears' real estate portfolio when the company defaults.

[https://www.wsj.com/articles/lampert-to-bid-for-sears-
real-e...](https://www.wsj.com/articles/lampert-to-bid-for-sears-real-estate-
if-rescue-attempt-fails-11546452228)

------
aunty_helen
Another Kodak moment!

But seriously, whilst it's fair to critique the amount that CEO's are paid,
when the alternative might be complete failure the cost is justified. Sears is
a failure of the C levels and ultimately a failure of the board. Remember that
next time we all balk at the $xx million paycheck of a F500.

------
known
When Sears, the Facebook of its era, launched its IPO in 1906 the catalog was
the Internet of the day [https://www.chicagotribune.com/ct-per-flash-sears-
ipo-0513-2...](https://www.chicagotribune.com/ct-per-flash-sears-
ipo-0513-20120513-story.html)

------
orionblastar
I worked for a part of Emerson Electric that made Craftman tools for Sears.
They were made in the USA and then in 1995 Sears cut the budget and gave the
contract to some other company. I was downsized as a result.

They got Rigid tools at Home Depot that EE makes now. Should be just as good
as the old Craftsman series.

------
daveheq
Sears was intionally gutted, flipped to make a few people money. This is not
news. [http://www.businessinsider.com/how-eddie-lampert-set-
sears-u...](http://www.businessinsider.com/how-eddie-lampert-set-sears-up-to-
fail-2017-5)

------
cmiller1
Still would go there occasionally for clothes. Brick and mortar has been
mostly replaced for me except for groceries (I'm aware there are services but
I'm in a pretty rural area right now) and clothing where I still appreciate
the benefit of trying them on before buying.

------
everdev
In the early 2000s, my business classes were breaking down the inefficiencies
of large scale brick and mortar businesses and forecasting their digital
takeover.

The big surprise for me was how long so many of them have held on. It seems to
be a slow die off rather than a mass extinction.

------
superpermutat0r
Sears is a company with a CEO and board that do not care. Their skin is fine
if company goes bust.

~~~
gammateam
In concept yes, but I dont think this deal will work out for the CEO’s hedge
fund

He tried to take an activist position to create a market for the bonds he
bought, and it failed.

Everything related to a nostalgic middle america mall space that also employed
people is just irrelevant.

------
davidlago
Not dead yet: [https://www.cnn.com/2019/01/08/business/sears-future-
bankrup...](https://www.cnn.com/2019/01/08/business/sears-future-bankruptcy-
delay/index.html)

------
t0mbstone
I wonder what will happen to all those "lifetime" tool warranties once Sears
closes?

~~~
smileysteve
They sold off craftsman a few years ago; the warranties are still honored by
new retailers, including Ace Hardware, Lowes, Blains, and Atwoods.

------
andyidsinga
my house was built in 1924 - one of my older neighbors said that very good
chance it was a "Sears Kit Home" ..looking up "Sears Kit Home circa 1924" on
google image search provides some pretty spot on plans.

I think sears was the original amazon :)

------
jonthepirate
Every time I think of sears I think of this story
[https://www.youtube.com/watch?v=sHIktR-3Ci4](https://www.youtube.com/watch?v=sHIktR-3Ci4)
where they stole someone's wrench design

------
Vinci_Labs
Sears, K-Mart & Toys R US have all faced the same fate!

Layoff data for these retailers here, if someone's interested in it.

[https://6figr.com/layoff/Sears](https://6figr.com/layoff/Sears)

------
griffinkelly
I wonder what's going to happen to the Guam Kmart? It's insane how busy it is.

------
whitten
I'm sad. Sears brought the Atari micro computers into the Heartland of America
and spurred my imagination. They were a bit pricey, but all computers were. I
remember almost $300 for 32K of extra memory.

~~~
dragonwriter
The Sears that did that died a long time ago; it was buried when Kmart bought
them in 2004.

------
zw123456
I think the reasons are basically the same as why companies like Kodak and
Polaroid could not capitalize on digital photography. covered in the book "the
innovator's dilemma"

------
NoblePublius
Where is the SEC investigation into the CEO’s looting and plundering of the
company? Why have they allowed the CEO to also be the company’s biggest
creditor? Too busy with Elon’s tweets?

~~~
dragonwriter
> Where is the SEC investigation into the CEO’s looting and plundering of the
> company?

Is that even a violation of anything within the SECs purview, if all the
reporting is in order so that the stockholders have the information about what
is going on?

~~~
NoblePublius
If it’s done to manipulate stock price, yes.

------
djsumdog
Huh ... 126 years. I wonder if our children will ever see Facebook, Samsung,
Amazon, Wal-Mart or Google fold one day.

Sears is/was the Amazon of the 1920/20s. All things must pass eventually.

------
rajacombinator
I don’t get the nostalgia for this business. It’s just another middleman for
stuff made in China. Liquidate it and stop with the stories about this guy’s
hedge fund.

------
gesman
The fish rots from the head.

Someone needs to analyze Sears' management behavior for the last few decades.

I am pretty sure some interesting patterns of ignorance and incompetence will
emerge.

------
perseusprime11
Sometimes it is ok to acknowledge a great run instead of trying to figure out
how to stop the disruption. I am not sure why a company has to exist forever.

------
fromMars
Sad day for me. Honestly, I'm more scared of the negative economic impact of
Amazon than Google. I am big fan of brick and mortar businesses.

------
aj7
Regarding Sears vs Amazon. Clayton Christensen wrote an entire book, now a
classic, on why the incumbent is not the leader in the next go around.

------
mychael
I hope business schools teach about the failures made by Sears executives.
Especially about not adapting to change and investing in technology.

------
oblib
I'd love to see the trend lines for Sears that compares performance with the
percent of employee owned stock vs outside capital.

------
patte
for german speakers: the best told and most comprehensive story about the rise
and fall of sears: [https://www.republik.ch/2018/12/25/sears-eine-
kapitalistisch...](https://www.republik.ch/2018/12/25/sears-eine-
kapitalistische-weihnachtsgeschichte)

disclaimer: I work for Republik.

------
zymhan
Is anyone reading the updated article?

> Court allows Chairman Eddie Lampert another chance to buy Sears, pushing off
> decision to shut stores

------
randomacct3847
I will miss the $2 credit for every Uber ride :/. I think I got $400 in free
stuff from Sears/Kmart last year.

------
lunulata
Sears was always a crummy store since I can remember. This shutdown has been a
long time coming.

------
tchaffee
CEO Lampart is a huge fan of Ayn Rand and promised to turn the company around
using her philosophy. So I suppose we now finally have one large scale case
study.

------
codyogden
So, can we finally get rid of that Kmart on Lake Street and retake Nicollet?

Minneapolis dwellers know.

------
anigbrowl
This headline is a bit like 'Man plans to crash after falling 126 stories'

------
anongraddebt
My two cents...

As I like to group things in threes, my explanation for Amazon's success is
that they had better leadership principles, better execution ability, and a
better theory about the future (all business strategies make an implicit or
explicit claim about what the future will look like) than any direct or
indirect competitor. Could at least some competitor have been better than them
at one of those? Perhaps. I don't think any competitor matched them along all
three of those dimensions.

Amazon's '97 letter to shareholders gives you a taste as to their theory of
the future. Everyone already knows about their ability to execute. Most
already know their leadership principles. From an anthropological perspective,
I find it relatively insightful to revist them from time to time. Here they
are:

(1) Customer obsession. (2) Ownership. (3) Invent and simplify. (4) Leaders
are right, a lot. (5) Learn and be curious. (6) Hire and develop the best. (7)
Insist on the highest standards. (8) Think big. (9) Bias for action. (10)
Frugality. (11) Earn trust. (12) Dive deep. (13) Have backbone; disagree and
commit. (14) Deliver results.

\-------

To speculate even further... suppose someone were to ask me, "Distill the
insights Bezos & Co. made into a single element so that I can understand what
Amazon is. What is that one thing or what is Amazon really all about?" What
would I say?

Benedict Evans would talk about a machine that makes more of itself.

Scott Galloway would talk about storytelling and its relation to cheap
capital.

Ben Thompson would talk about an entity with multiple moats that takes a cut
of all economic activity (or maybe just describe some version of an
aggregator).

Many others would talk about the virtuous cycle of lower prices --> more
customers --> etc.

I would say:

"Warren Buffet had a breakthrough insight - the competitive moat - in the 60's
that ended up dominating business thinking up to the present (and will
continue to be important/fundamental into the future). Bezos & Co. made an
insight of similar importance. Namely, the actual value of an asset truly does
outstrip your present understanding of its value, and outstrips your present
understanding in a very significant way.

No breakthrough insight is sui generis, as it is constructed using already
existing conceptual elements. Buffet's moat was there in the financial
statements, and already intuited in a vague way by successful investors and
managers before the 60's. The same can be said about Bezos & Co. It's a truism
of managerial economics that the point of business is to move under-valued
assets into higher-valued uses. Amazon both took this to heart (they
internalized it) and they recognized that the true extent to which an assets
value outstrips your present perception of said assets value, was an order of
magnitude greater than anyone thought before."

------
mark-r
I honestly thought they were gone already.

------
philwelch
I wondered whatever happened to Sears.

------
thisisweirdok
All companies will eventually end, but it's crazy how big Sears was and how
far they fell in a short time. At one point they were selling mail-order DIY
houses!

------
Forbo
Congratulations on driving a company into the ground! Have a golden parachute!

[https://www.cbsnews.com/news/sears-bankruptcy-court-
oks-25-m...](https://www.cbsnews.com/news/sears-bankruptcy-court-
oks-25-million-in-bonuses-for-top-execs/)

~~~
ArrayList
I'll never, ever be able to comprehend this. It sickens me to the core.

~~~
rashomon
So the whole mechanism to these bonuses is for the banks/investors to keep the
executives around long enough to not lose the institutional knowledge and to
keep the company heading in a general direction during the bankruptcy
chartering.

~~~
kokokokoko
That is only valid when the plan of bankruptcy was to avoid liquidation. This
buyout became a veiled liquidation in the late 00s early 10s[1]. They need to
prop up Sears and K-Mart stores long enough to pay leases to support Seritage
Growth Properties property conversions to be prepared to bring in new
tenants[2][3]. I guess you need to pay those out to fool a bankruptcy court
into selling you the assets in for less than they are worth to liquidators.
Which you can then continue to liquidate in secret under the guise of
improving efficiency.

Its nice to see bankruptcy courts wising up to these schemes, but I'm not sure
this isn't something lawmakers or regulators need to adjust to avoid more of.

[1] [https://www.chicagotribune.com/business/ct-biz-sears-
lampert...](https://www.chicagotribune.com/business/ct-biz-sears-lampert-esl-
proposal-store-sales-0928-story.html)

From the linked article: "In 2015, Sears sold 235 stores, along with its stake
in joint ventures involving 31 more properties, to real estate investment
trust spinoff Seritage Growth Properties. Lampert is both a stakeholder in
Seritage and its chairman."

[2] [https://www.fool.com/investing/2018/08/01/heres-why-
seritage...](https://www.fool.com/investing/2018/08/01/heres-why-seritage-
growth-properties-stock-is-soar.aspx) [3]
[https://www.fool.com/investing/2018/11/06/with-sears-on-
the-...](https://www.fool.com/investing/2018/11/06/with-sears-on-the-ropes-
seritage-growth-properties.aspx)

------
MentallyRetired
Whaat? How could this be? Did anyone see this coming? Nuts. Guess I'll have to
shop at Service Merchandise from now on.

Serious note: Sad to see it go, but it failed to adapt.

------
cauldron
That's not a good thing, e-commerce only pushes garbage quality with top tier
marketing goods.

