
A Billionaire’s Sears Fiasco Is Finally Nearing Its End - cohaagen
https://www.bloomberg.com/news/articles/2018-10-12/eddie-lampert-rode-the-worst-trade-of-his-life-all-the-way-down
======
dawhizkid
One of the most amazing "secret" benefits at Sears is their "Shop Your Way"
loyalty program with Uber. Basically since last fall, every Uber Ride or Uber
Eats purchase gives you $2-$4 cash back to use at Sears/Kmart online no matter
the cost if you linked your accounts. Given my average Uber Pool is around $5,
I've basically been getting 40% off all my Uber Pools for almost a year.

It will be missed!

~~~
paulie_a
In my experience you never actually get your food with Uber eats. I use uber
frequently, but Uber eats is crap.

~~~
stephengillie
If you're having a service or technical issue, try a customer service team
before being negative on the internet.

~~~
paulie_a
I have, their customer service also sucks. I really do like 99 percent of the
Uber drivers. But Uber eats is a crappy service, Uber as a company simply has
consistently shitty customer service.

They need to get their act together of they have any intention of competitors
with GrubHub and the other twenty food delivery services.

~~~
brazzledazzle
Their customer service sucks big time. If I order 4 meals and only 3 arrive
how do you not fix that immediately? Can’t call anyone so you put a ticket in
that sits for 24 hours.

Screw their line item refunds too. If I have to drive somewhere because
someone is left out of the meal there was no point in ordering at all.

------
nodesocket
> most famously when he persuaded four men who kidnapped him in January 2003
> to let him go after holding him for 30 hours, blindfolded and handcuffed, in
> a motel bathroom.

Wow, that's pretty badass. It is sad as lot's of people on HN have no idea the
monster Sears once was. I still remember as a kid ordering a remote control
fire truck from a Sears catalog. It had lights, sirens, full latter control,
and even air brak sound effects as it stopped.

I worked at my local hometown Sears after high school selling computers and
the original iMac (should have loaded up on Apple stock) as fast as iMac's
were selling (Oops).

Let's not forgot Sears employees a great number of people still, and
unfortunately they are soon going to be out of a job.

RIP Sears, Roebuck and Company the retail empire of yesterday!

------
oblib
Theodore Houser, a former CEO of Sears wrote a book, "Big Business and Human
Values".

The book is really worth reading because the contrast between Houser and
Lambert (and most all CEOs now) is striking. I think just the title of his
book demonstrates how different capitalism is now in comparison to Houser's
day.

"Human Values" is not something we hear CEOs or financial talking heads speak
of much anymore. (Has Jim Cramer ever used that phrase?)

I will point out that Arthur Martinez did help bring Sears back to a customer
centric business model in the mid-90s but he missed the boat when the internet
came into the mix. Sears was perfectly positioned to become what Amazon is now
and they did almost nothing to move on it.

Hard to imagine anyone rising up the corporate ranks like Houser did these
days. I can't think of a single example that compares to it.

I think it would be interesting to review Sears fall from the top from that
perspective because I suspect we'd probably see their decline began when they
stopped promoting CEOs from within their own ranks. That changed the focus
from their customers to their investors, and that's why they're where they are
today.

~~~
drak0n1c
Jim Cramer was self-admittedly very left-leaning while he was editor of the
Crimson in college. His current philosophy is that whatever increases
commercial activity is good - so he does comment on company values in terms of
how it affects the company's brand and success.

~~~
paulie_a
Jim Cramer is also an idiot. To quote Jon Stewart "if you follow Jim Cramers
advice you end up with a million dollars if you start with 100 million
dollars"

~~~
1123581321
Jon Stewart is incorrect, but Cramer’s picks make money but do not outperform
index funds, so they have too high of opportunity cost (not to mention the
time spent watching the show.) Some reading:
[https://www.cxoadvisory.com/4811/individual-gurus/cramer-
off...](https://www.cxoadvisory.com/4811/individual-gurus/cramer-offers-you-
his-protection/)

Cramer himself is not an idiot regardless of the quality of his stock picks.
He’s a successful entertainer, like Jon Stewart.

------
brianbreslin
So many of the assets that Sears was known for, their tools, appliance brands,
etc. are all siphoned off into Eddie Lampert's hedge funds.

~~~
8bitsrule
It's almost as though he is "a great vampire squid ... relentlessly jamming
its blood funnel into anything that smells like money."

------
village-idiot
I still cannot believe that Lampert’s actions here are legal, or that the
board didn’t fire him for the obvious conflict of interest.

------
cultus
This whole saga with Eddie Lambert is a great example of how the rich fail
upward.

~~~
sjg007
Interesting.. can you elaborate?

~~~
lbotos
He's the CEO of a failing company, but in it failing, he still makes a ton of
money because his hedge fund is in a position to make gains from the company
failing.

~~~
tomc1985
That would explain why my local Sears location seems to have suffered a
perpetual tornado-strike ... empty shelves and product strewn everywhere.
Every time I go in. Nothing interesting is ever in stock. How that place is
still open amazes me...

~~~
stephengillie
They save a ton of money on labor. It's easy for sales to cover salaries if
you have no employees to pay.

~~~
tomc1985
That's the weird thing, staffing wasn't too bad. There were people around most
of the sales posts. Good luck finding someone in the aisles though.

------
tim333
I'm reminded of Buffett's saying:

>When a management with a reputation for brilliance tackles a business with a
reputation for bad economics, it is the reputation of the business that
remains intact.

It's been quite a saga.

------
weliketocode
Anyone have numbers around how much Lampert personally put in and how much he
personally will get out of Sears?

What are we expecting returns to be here after all the financial engineering
and various fees from investors?

------
ocschwar
How is it a fiasco? He wanted to gut the place and get the real estate.

He gutted the place and got the real estate.

It's a heist, not a fiasco

~~~
nostromo
Maybe he intended it to be a heist, but it surely ended up being a costly
fiasco. His fund is in the tank, and his personal fortune most certainly took
a huge hit.

~~~
cascom
its not super clear who is making and losing money in this saga

~~~
badloginagain
Somehow both for Lampert

~~~
dv_dt
I suspect Lampert the Sears CEO is losing money, Lampert the hedge fund
manager is making it via a slo-mo takeover of Sears assets from other Sears
shareholders.

~~~
HenryBemis
I would like to believe that someone is checking that he doesn't short his own
stock ;)

~~~
behringer
Who's going to get caught when you can just split the profits with a trusted
friend?

------
olefoo
Hubris and an unshakable belief in Ayn Rand...

[http://evonomics.com/the-ceo-of-sears-jon-haidt/](http://evonomics.com/the-
ceo-of-sears-jon-haidt/)

~~~
bsenftner
Rand's legacy fits how she died: penniless and dependent on the institutions
she viewed as failures of the human spirit. What a misguided wreak. Too bad
she was influential, because much of the idiots stinking up the planet are her
ideological children.

~~~
cultus
Objectivism really is a vacant and pretty incoherent "philosophy." It's no
surprise she presented in in the form of tedious novels with wooden characters
rather than engaging with actual philosphers.

I think its popularity is due to the fact that it tells people what they want
to hear, and they can think of themselves as John Galt-esque ubermenschen.

~~~
poulsbohemian
> they can think of themselves as John Galt-esque ubermenschen.

Of all the heroes we could encourage people to have, is John Galt really so
awful? He's described as bright, hard-working, self-reliant, but also
collaborative and supportive of the work of those around him. He's driven and
entrepreneurial, but not anti-social. He doesn't come across as anti-
government so much as desiring government that isn't kleptocratic or set on
regulatory capture. So... is any of that so awful?

There's a spectrum here... those who praise Rand and Objectivism might do so
with a bit too much fervor. But,I'm skeptical toward those who turn up their
nose with disgust.

~~~
dieterrams
The fundamental problem with Rand's ideology is her cartoonish categorization
of everyone that isn't Galt-esque or an enthusiastic, hypercompetent support
person as evil looters/parasites. Iirc, Galt is basically trying to collapse
society for everyone but the former.

When you realize that you can't just write off people because they didn't turn
out to be brilliant entrepreneurs or perky worker bees, and that the workings
of government and justice are more complicated than Rand would allow, Atlas
Shrugged does become pretty repugnant. Granted, she was reacting to her
experiences with communism, so I don't totally blame her for going all the way
to the other extreme.

But insofar as someone wants to invent great things and do well from them, I
don't take issue with that.

~~~
EdSharkey
Ayn Rand's characters and storytelling is crappy. The correct response when
someone asks, "Who is John Galt?" is always "WHO THE #$%^&* CARES?!" That
notwithstanding, Rand understood that one can moralize without limitation in
our culture as long as one does it in narrative form, and she used her
platform to the extreme.

The message and moral I took from her stories was essentially pro-human, where
the archetypal good is that independent man who creates according to their own
taste, without any overlords, and without the approval of others. The greater
any effort is collectivized, the greater the sin.

Rand's is a hyper-optimistic view of the individual - it feels like an
atheist's attempt to replace God with Man and then posit him as the highest
virtue. And in the introduction to The Fountainhead, I believe Rand even said
her philosophy was a form of worship of Man. It's foolish because life is much
too brutal for man to ever truly ascend that way. In any case, her brand of
optimism is so rare, and that sells.

It's so interesting to me that your critique went to group politics and
identity, though. Rand was consistently negative about groups and big
government cronyism. She treated her archetypes as equally noble whether they
were breaking rocks in a quarry or engineering some new miracle metal. Do you
view the world through such a group identity lens that you couldn't see that
in her writing? It's absolutely plain.

The evil archetypes in the Randian universe are any nullifying spirit,
destroyer, or parasite. Remember, these are archetypes, no-one in the real
world is so black-and-white. It's not a bad characterization of evil, and has
parallels in religion and literature.

~~~
dieterrams
> It's so interesting to me that your critique went to group politics and
> identity, though. Rand was consistently negative about groups and big
> government cronyism. She treated her archetypes as equally noble whether
> they were breaking rocks in a quarry or engineering some new miracle metal.
> Do you view the world through such a group identity lens that you couldn't
> see that in her writing? It's absolutely plain.

I’m not really sure what you’re talking about. I do have thoughts on group and
identity politics, but I certainly wasn’t referencing them in my post. Not
consciously or in any way that is obvious to me, at least.

Re: her archetypes being treated as “equally noble”, I didn’t suggest they
weren’t? Although she certainly presents a hierarchy of value that depends on
what a given character is doing / capable of. Rearden is without question the
lesser man in Rand's and Dagny Taggart's eyes, compared to Galt.

~~~
EdSharkey
It was two things you said which gave me some insight into your worldview:

> Galt is basically trying to collapse society for everyone but the former.

There is an interesting feature of the Christian bible where God starts out
walking/talking directly with Man, and as the stories progress, God grows more
and more distant. Eventually, God can only communicate with mankind via
prophets and Jesus. I think the point of this storytelling device was to
indicate the increasing sin divide between humanity and God. God, being
incompatible with sin, simply could not approach us even though He wanted to.

I believe Rand uses this same 'disgusted separation' device in Atlas Shrugged
to remove her heroes further and further away from the fallen world.

That you took Galt's exodus and luring of the most productive people from
society as an offensive move to destabilize that society struck me immediately
as a "class struggle" thought. You had formed Rand's productive archetypes as
some kind of oppressive elite class, or some such.

I _wish_ there was some gray in Rand's writing and thoughts to allow for that.
In her philosophy, voluntary denial of one's productive capacity to others
could never be considered terrorism.

I clearly see targeted terrorism in Galt's luring of key people out of
society, regardless of when and why, because we all need one another, period.
But Rand thought Galt was saving those people from an already too-far-gone,
collapsing world, there to help rebuild after the old world finally bottomed
out.

> When you realize that you can't just write off people because they didn't
> turn out to be brilliant entrepreneurs or perky worker bees

This felt to me like another oppressor/victim thought you had where the
oppressor might be the employed and the victim might be the indigent or
jobless. Life is more complicated than that, so those characterizations are
only sometimes true (and perhaps not even mostly true in my personal,
subjective experience.) Reducing the world down to too generic terms risks
missing the truth of things, giving one false rationale for all kinds of
mischief.

You make a good point about gradients in Riordan vs Galt. It's been a couple
of years since I read AS, but I recall Riordan's "sin" was that he loved the
work too much and gave in to the government cronies rather than just shrugging
them off. Ugh, that book was a hot mess...

~~~
EdSharkey
> I wish there was some gray in Rand's writing and thoughts to allow for that.
> In her philosophy, voluntary denial of one's productive capacity to others
> could never be considered terrorism.

I said that, forgetting there was terrorism (hero blows up a building) in The
Fountainhead. AS is definitely a more pure statement of Rand's philosophy, but
I think she rationalized away too much in every case to cleanly make her
point.

------
conscion
_He saw about $240 million worth of stock that he personally purchased
evaporate as the shares tumbled. Another $287 million that he received in
compensation has all but disappeared._

... so he made $40 million?

~~~
mulmen
How do you get -240 - 287 = 40?

