
Sears says it has secured a $250M lifeline, will close 96 stores - hhs
https://www.reuters.com/article/us-sears-financing-exclusive/exclusive-sears-says-it-has-secured-a-250-million-lifeline-will-close-96-stores-idUSKBN1XH2OL
======
folkhack
What makes me disgusted on this is how many Sears employees got taken along
for the ride while people like Eddie Lampert greatly profited while company
tanked. I highly recommend the following podcast by the Grubstakers as it
illustrates exactly what I'm talking about:

[https://soundcloud.com/grubstakers/episode-105-eddie-
lampert...](https://soundcloud.com/grubstakers/episode-105-eddie-lampert-
searsk-mart)

~~~
fzeroracer
To play the devil's advocate for a moment: Why is this a bad thing? The
investors and CEO profited from Sears failing and (presumably) in this free
market economy that money can therefore be better invested in non-failing
companies. Otherwise it would've just been lost.

Let me be clear though that I absolutely do not agree with the above. But the
reason why I'm proposing such a rhetorical question is because how do you stop
this? How can you convince people that what they did was legally and ethically
wrong? They intentionally ran the company into the ground to increase the
short term profits so they could parachute away with a nice bonus at the cost
of the lower level employees.

But if we want to stop this behavior then we need a way to codify it in law. A
way to prevent the slash-and-burn style of CEO or investor management.

~~~
nemothekid
> _Why is this a bad thing? The investors and CEO profited from Sears failing
> and (presumably) in this free market economy that money can therefore be
> better invested in non-failing companies. Otherwise it would 've just been
> lost._

Sears isn't failing because the business wasn't sound. Sears is failing
because Lampert decided to neglect the business and use the balance sheet to
play financial games that destroyed the business once 2007 hit - and once it
was time to actually make money, they had been sorely left behind. The company
that invented the catalog and was shipping things from warehouses before it
was cool didn't take the time to build a proper web platform. Sears was
mismanaged and I'm even skeptical Lamport profited at all from the endeavor.

If some hedgefund took over Samsung and decided to divert all resources to
invest in Dogecoin, and subsequently lost all of Samsung's money, I'd struggle
real hard to call it anything other than a "bad thing".

~~~
javagram
Sears shut down the mail order operation in 1993. I don’t think Lambert had
anything to do with that.

It’s not clear to me he’s actually been making money off the fiasco either.
Wikipedia: “ In March 2012, Lampert was No. 367 on the Forbes world wealthiest
people list with a net worth of $3.1 billion.[12] By August, 2016, Lampert had
fallen to No. 810 on the list, with a net worth of $2.2 billion.[1]”

Maybe he would have been better off selling off sears for parts and putting
the cash in an index fund...

~~~
edoo
I'm under the impression him and his group became controlling shareholders of
Sears and asset stripped it. That is technically legal but Sears sued him for
infringing on the other shareholder's rights during the process.
[https://en.wikipedia.org/wiki/Asset_stripping](https://en.wikipedia.org/wiki/Asset_stripping)
Lampert is also part of the group offering the lifeline loan. So he helped
drain the company and is now going to profit from the loan to keep them alive.

~~~
javagram
Or he’ll lose his money on the loan too. That $500 million will all go down
the drain if the company doesn’t have a turnaround. A loan is giving someone
else money and you only profit if they pay you back in full with interest
after all.

I saw a different article criticizing him for basically throwing his money
away trying to keep Sears going... [http://money.com/money/5498143/eddie-
lampert-trying-to-save-...](http://money.com/money/5498143/eddie-lampert-
trying-to-save-sears/)

> While Lampert hasn’t suffered like his employees, Sears’ decline has cost
> him: Since taking over as CEO in 2013, he’s lost almost half his fortune –
> once as large as $3.1 billion. During his peak before the financial crisis,
> Lampert managed over $15 billion at his hedge-fund. As his bet on Sears
> soured over the years, more and more investors abandoned him. By the end of
> 2017, ESL managed only $1.3 billion, according to filings with the
> Securities and Exchange Commission.

------
ggm
From reprints of sears catalogs from the turn of the century to a secondhand
1970s catalog we had as toilet reading (and emergency toilet paper) I
understood where I thought sears positioned. I think much of that market was
hollowed out by others (Costco, Walmart, Amazon) but a lot was thrown away in
corporate insanity which made a few people immensely rich and broke things for
no value outside of that play.

I shopped in modern Sears a couple of times (I'm not a US resident) and it was
sad. More staff than customers, a sense of doom, the kind of lighting designed
to make you not linger (this is actually a thing. A shop here in Australia
called Lowes which specializes in cheap big-man fashion has lights which are
pretty much there to make you grab and run)

I got three pairs of Levi 501s at below any other suppliers price, 3x or more
below Australian price. To be so significantly below market, you either have
to have massive stockpiles of unsold asset you need to move to save storage
costs, or you have to have some amazing sweet deals, or maybe both. But it
said to me "this is simply not sustainable"

I too am amazed at the lingering mouldy corpse. I expected it to be fully
dismembered, and anything called Sears was implicitly holding onto IPR to keep
a venue, but actually sending money who knows where.

I probably wouldn't willingly go into one again, Ever. I might if they sold me
online on an item and it was a pickup venue, but if they can sell it online
and I pick up at target in a box, I'm good. Probably, I find another source
for levi's

------
Johnny555
Why would anyone give them $250M? Is there any reason to think that Sears is
going to be able to save itself from its inevitable demise? Sears used to be a
trusted household brand -- my parents bought everything there, clothes, TV,
tools, kitchen and household appliances -- but that hasn't been the case for
years, maybe decades. Craftsman used to be a good brand for the non-
professional, but those days are long gone.

~~~
nradov
Stanley Black & Decker is trying to resurrect Craftsman through a partnership
with Lowe's. The tools themselves are probably as good as any other mid-range
tools targeted at DIY customers.

~~~
Johnny555
_The tools themselves are probably as good as any other mid-range tools
targeted at DIY customers_

Not in my recent experience -- I got a tool set for Christmas 2 years ago --
the ratchet broke on first use (the retaining clip that held it together
either broke or was never installed), one of the box-end wrenches snapped off
while trying to loosen a tight (but not corroded) screw on a lawnmower.

I think craftsman still has a lifetime warranty, but I didn't even try to
replace the broken tools, I bought replacements of Home Depot's store brand
(Cobalt?) and found them to be of better quality.

A couple years further back I bought a Craftsman floor jack, it broke on first
use, a pivot pin was missing, so the entire jack arm bent over to the side
when I tried to lift my car -- it wouldn't retract so I had to use my car's
tire jack to lift the car enough to get the broken jack out.

I took it back to the store and the clerk said "Put it over by that other
one", and that other one had the exact same problem.

~~~
mod
> I think craftsman still has a lifetime warranty

No, although some 3rd party stores will still honor it.

> cobalt

Kobalt, yeah. They're possibly better, but probably not. I own a few things
from them that have been perfectly functional, no complaints, but not high-
quality.

I have very few modern craftsman tools--most of my hand tools are vintage--but
I've found them to be comparable. I wouldn't be surprised if they all come
from the same factory somewhere.

~~~
Johnny555
I have a lot of old hand-me downs from my father, his old craftsman stuff is
still great. My brother got most of his Snap-on stuff (he uses it daily in his
business, he needs the good stuff) and that stuff is fantastic -- some of it's
had 20 or 30 years of heavy use. Though you pay the price for it (more than
I'm willing to pay to turn a bolt on my lawnmower a few times a year :-) )

------
tracker1
In the mid-90's if Sears had simply put their full catalog on the internet,
with some basic search functionality, and a cart, you could then call and do a
phone order, they'd have been ahead of everyone at that time. At that time
Sears owned the phone ordering space. In the end, a relatively few simple
steps would have let them hold and build their position. After Prodigy
effectively failed, they figured the internet was another fad and wouldn't
take off.

In the end, they failed on their leading advantages, and failed to execute
time and again. Then they brought in some of the most unscrupulous management
I've ever even heard of in terms of larger corporations.

------
jbob2000
> Sears said its owners have been “working hard to position... for success by
> focusing on our competitive strengths and pruning operations that have
> struggled due to increased competition and other factors.”

Strengths? What strengths? Unless it’s the only store around, there’s
absolutely no reason to go to a Sears today.

~~~
mgbmtl
Naive question from a guy who doesn't shop often: what kind of stores are
replacing Sears for general "house" stuff for an average price, average
quality? More specialized shops in boxstores? (I don't like driving and they
tend to be located far from where I live)

I used to shop at Sears in Canada when they existed (until 2018). Now for
appliances I go to home depot, and for kitchen stuff I go to Canadian Tire.
Sometimes I browse Amazon but it's so full of rubbish/fraud I just end up
giving up. I have to admit I once tried shopping appliances at Sears, and the
sales people were just hawkish and creepy, like car salesmen.

~~~
AnimalMuppet
You go to Canadian Tire for _kitchen stuff_? Is that a typo? If not, can you
explain?

~~~
mgbmtl
Yep, if you're not familiar with the store, it's kind of like a Walmart, but
there's one in my neighbourhood and they provide decent value, especially for
tools and outdoors stuff.

------
mark-r
Wow, the downfall of Sears is much slower motion than I ever expected. I
thought they'd be a ghost by now.

~~~
Digory
Lampert isn’t a genius in turnarounds. He’s a genius in the art of prolonging
corporate death.

~~~
drawkbox
Yeah the goal is to extract the most cash/value/assets as possible, the delays
benefit that for the value extractors.

Leveraged buyouts are designed to slow bleed for this reason, bring down the
cost both in growth prospects diminishing slowly and wearing resistance out so
people sell low.

Walgreens is entering one right now or soon if not now, they are a target of
private equity.[1] It won't end well for consumers or employees or public
market holders, just the value extractors, they will cash in while they cash
out Walgreens.

> _Walgreens Boots Alliance shares surged Wednesday amid speculation that the
> U.S.-listed drugstore group has been considering a $70 billion take-private
> deal._

> _If private equity can pull it off, it would be the biggest leveraged buyout
> ever, dwarfing the $45 billion transaction in which energy group TXU was
> taken private in 2007, just a year before the financial crisis rocked global
> markets and prompted unprecedented intervention by global central banks._

[1] [https://www.marketwatch.com/story/walgreens-
possible-70-bill...](https://www.marketwatch.com/story/walgreens-
possible-70-billion-buyout-is-a-clear-sign-the-stock-market-rally-is-about-to-
end-2019-11-06)

~~~
mark-r
I once had to read the book "Good to Great", and Walgreens was used as a prime
example throughout the book. They drove their success by having a fanatical
focus on convenient locations. I saw it once myself, they closed a store and
opened a new one right across the street because it was a better location.

I always wondered how that strategy was faring once grocery stores started
including pharmacies.

------
8bitsrule
It's awful to see this happening, but I think the bigger question is, what can
brick-and-mortar stores, with all that overhead, do to compete with a presence
like Amazon?

Sure, Kmart/Sears might have gone online as well ... which would leave behind
the advantages of physical scrutiny of purchases without the added shipping
charges. I find it really hard to leave behind that approach to shopping. (I
haven't seen any pros-and-cons for the environmental costs ... but I've
noticed that _nearly everything_ Amazon delivers arrives inside a throw-away
box delivered by non-green vehicles.)

The idea of buying something online without being able to truly
inspect/compare quality is a really big loss. (Trust the reviews? Not so
much.)

~~~
adamnemecek
Target is kinda crushing it.

~~~
function_seven
And Kohls and Best Buy as well.

Best Buy is the one that surprises me the most. I would have bet real money 10
years ago that they'd be gone by now. Instead they've doubled their market cap
and earnings continue to grow.

~~~
therockspush
Kohls accepts Amazon returns now. Then they hand you a 25% off coupon. People
turn right around and shop at kohls with their new found return money.
Brilliant strategy.

------
ethanpil
Only yesterday, I received a printed Amazon catalog in the mail. It's really
funny to think about how things have come full circle.

------
jdkee
“Sears was the Amazon of its day.”That may have been true but when we worked
with Sears as an IT vendor in the 1990s they were so sclerotic it wasn’t
funny. We started a project to move them from Type-1 token ring to Cat-5
100mbs Ethernet and they couldn’t pull the trigger for over four years. The
insane level of bureaucracy in Hoffman Estates was mind-blowing.

------
jiveturkey
Doesn't seem like a lot of money. The article doesn't say, so can anyone
estimate, how long will that money last? They need to take $100mm straight off
the top and allocate it to new R&D and not just "doing the same thing" maybe
with a marketing iteration.

------
dwighttk
There are still open Sears-es? Where? All 4 Sears related stores closed near
me back when I thought they closed them all.

~~~
drivers99
[https://www.sears.com/stores.html](https://www.sears.com/stores.html)

------
blairanderson
Unless sears is purchased by FAANG then all articles should be hidden from the
frontpage.

Its a junk retailer.

Garbage

