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.
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".
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. By August, 2016, Lampert had fallen to No. 810 on the list, with a net worth of $2.2 billion.”
Maybe he would have been better off selling off sears for parts and putting the cash in an index fund...
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-...
> 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.
Are you sure about that? The Sears mailorder pickup location near here just closed down within the last 5 years. The town I used to live in had a Sears mail order pickup location that was still open at least 10 years ago.
I’m not sure what the pickup location you’re referencing would have been for. And if you’re picking it up from a store, that’s not exactly a ship to home service anyway.
It was a big deal because they used LTL freight and many of the areas where they were located didn’t have good UPS or Fedex coverage.
My family had the catalogue come to our house well into the late 90’s/early 2000’s.
It hasn’t been the old sears, Roebuck company for many years.
tl;dr: I don’t think they’re very comparable to Kodak. :)
I feel like you've answered your own question immediately after asking it. As a sibling commenter said, you can't convince someone this is legally wrong because it isn't, but any ethical system that places personal wealth creation over the well-being other humans isn't one I can respect.
Well if it's not illegal (as is the case currently) it's silly to convince them it's legally wrong.
Regarding ethics, in theory (I do not consider this a realistic solution) you could advocate for corporate reform and start pushing more B-Corps onto the world. It's worked wonders for Patagonia, but they are definitely an exceptional example.
Fundamentally the problem is a dichotomy - value creation versus value extraction. Do we want to make value extraction illegal? I hope someone will respond telling me why that is a terrible idea, but it actually sounds like the sort of morals-first law that might be good for everyone except parasitic investors. And I mean...why do we want more parasitic investors?
And I think the rationalization would be that investors create more value through ensuring efficient value extraction which then flows back into the economy. But overall I think you're right in that we should discourage value extraction because of how it leads to running businesses to favor yourself or your investors rather than the business itself.
The contrast is that what's good for investors isn't always good for the business and vice versa. Right now I don't think there's strong enough checks on investors, since even in the case of failures they often come out ahead.
If money was expensive, there would be less deals at the margin. And presumably, fewer Silicon valley-unicorn-hype firms that continue to loose money.
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
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.
No, although some 3rd party stores will still honor it.
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.
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.
Strengths? What strengths? Unless it’s the only store around, there’s absolutely no reason to go to a Sears today.
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.
1. Hardware and home renovation stuff? Lowe's or Home Depot
2. Appliances? Best Buy
3. Auto? Honestly I think the auto category was the one that was "decent" the longest, but now I'd go anywhere else.
4. "Softer Side of Sears" stuff? Target
A similar story seems to have repeated itself with many retailers including Toys R Us.
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. 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.
I always wondered how that strategy was faring once grocery stores started including pharmacies.
Retailers take a really, really long time to die.
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.)
Be reliable. Amazon is horribly unreliable, that thing you bought last week may not ever be in stock again. It may not arrive in the time specified, it may be fake or of low quality. You might buy it again and get something different this time.
I can walk into Home Depot and buy something any day of the week and can usually rely on them to have things in stock and the price to stay somewhat the same.
Like at Marshalls, or any of the various deep discount odd lot stores. Reliability is not inherent in brick and mortar.
Vet their suppliers!
I can walk into any Walmart, Target, Home Depot, etc, etc in the United States, buy a light-bulb (just an example of a product they all carry) and be assured that it is going to do the job it is sold as being able to do for a reasonable amount of time and if not I can bring it back for an exchange or refund.
Smart stores are figuring it out. Target, Walmart, Aldi, high end brands, etc. Target is delivering the local delivery experience that Amazon has spent billions of dollars on, and they delivered 1.0 in a few months. Amazon can’t figure out how to send me unexpired crackers.
Amazon is a finance play that is already showing cracks. They need to use 3rd parties to keep inventory off the books. As a result, they are struggling with fulfillment of trivial items like books and have massive capital costs subsidized by AWS. Microsoft is already discounting for market share, and you’ll see Google do the same.
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.
Its a junk retailer.