Sears, One Piece at the Time.

Sears is dying. The 125 years old American giant is losing a war that began 13 years ago. A problem that has been fraying the corporation’s texture by liquidating its assets, chunk by chunk, in order to produce a so-called ‘great change’, something that hasn’t yet been accomplished, and it seems that it’s never going to happen because of the constant financial maneuvers and dreadful management the company has gone through.

And No, it wasn’t Amazon nor Walmart neither any other major retailer in the industry which led Sears to its current situation. It was one man, its own CEO, Eddie Lampert.

Sears, One piece at the Time.   

Sears is dying. The 125 years old American giant is losing a war that began 13 years ago. A problem that has been fraying the corporation’s texture by liquidating its assets, chunk by chunk, in order to produce a so-called ‘great change’, something that hasn’t yet been accomplished, and it seems that it’s never going to happen because of the constant financial maneuvers and dreadful management the company has gone through.

And No, it wasn’t Amazon nor Walmart neither any other major retailer in the industry which led Sears to its current situation. It was one man, its own CEO, Eddie Lampert.

Check those Moves

The maneuvers made by Sears CEO, Eddi Lampert, deserves great attention from academics and business owners due to the continuing threat of bad decisions including aggressive capital movements, real state indiscriminate selling, hundreds of millions on lending as well as dramatic budget cuts on stores. All of this added to Lampert’s eclectic and unpredictable attitude towards the retail industry over the past 13 years since he got the chair of CEO.

Moreover, according to close associates, his way of managing the company belongs more to a hedge fund tycoon than to a brand lover committed to its customers. This can be obvious for the people in the world of business and capital management but for the general public seems strange and utterly paradoxical.

Outside seems as grim as inside

Today, Lampert (the main shareholder, lender, and owner of Sears) is 100% sure his actions will lead to a resurge of Sears once he has found the equilibrium and total control of the company’s assets. Experts have explained that Lampert is not thinking like a retail owner and he is missing the point of any retail business manager which is making people buy your products, targeting the right consumer, reinforcing your brand and building and trustworthy consumer service.

On the other hand, all these moves made by the giant retailer serve as a lesson for the world of business, one simple but essential lesson: When problems arrive you need to go back to the basics. This means to check the offer and supply, hear your customers, hear your own people, and especially do not hide from the reality but be open to critique.

Lessons to learn

Moreover, if you are an entrepreneur, this is a valuable lesson for you. The story of a man who was praised as a young genius and whose first moves scared but also impress the corporative environment, like when he merged Sears and Kmart together making the most unexpected move on all wall street. Everybody was wondering what was going into the CEO’s mind at the time. Today they have the same thought but with a different bitter taste.

Take into consideration that merging companies could provide a considerable reduction in fix costs in the form of reducing overheads and unifying distribution channels; at least during the next immediate year. However, if this was an aggressive move, it was also meaningless in the long run. Sears profitability kept dropping in later years because, as we mentioned earlier, lack of empathy with the company’s basic needs and misdirection towards the team who made Sears what it was for more than 100 years.

Getting advantage of the discounts

Unfortunately, Lampert’s persona was neither resourceful nor flexible, two qualities CEOs urge nowadays in this always challenging market.

The fall of Sears is almost the story of a man who inherits a rich and resourceful farm and spends his time doing nothing more than taking sun baths without picking up the fruits, changing the soil, and nurturing and watering the fields he owns. Then, when the winter season arrives, he notices there are no resources but only an arid and unfertile land. With no other alternative at hand, this man turns to his more basic and raw instincts and begins to devour himself as a last resort for survival. Sears is doing that to itself while the whole world watches.

Remember, even the most successful and powerful company can fail terribly. Do not let this happen to you. Listen to your people and your clients, keep a watchful eye of the supply and demand and always be open to critique.

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