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If only Eddie Lampert had invented the iPhone. After all, any business in decline can recover and generate huge profits simply by offering a new product that customers find irresistible.
In the real world, of course, this rarely happens. Businesses continue to do what they do, making small adjustments in the hope of pushing their competitors back and securing a future. Finally, all businesses fail.
Mr. Lampert, who took control of Sears and Kmart after 2005, did not invent the iPhone. Either he put his company on the ground, dismantling his assets to the end, or he pursued with creativity and creativity a turnaround that did not work. Make your choice, although this last story is more in keeping with the significant personal losses it has suffered and is apparently willing to continue to risk in this effort.
At the time, Sears was twice a groundbreaking innovator: its catalog significantly expanded access to rural America to products of all types at competitive prices, and then when it moved its vast selection of a central warehouse to hundreds, if not thousands of department stores, accessible by customers in their newfangled automobiles.
The late revolutions in the retail business were not so nice. The slow recovery after the 2008 crash was not slow either. All is well, Sears has lost money in each of the last seven years. Nevertheless, careful observers say that Mr. Lampert did some things well.
An indispensable anchor tenant for shopping center builders at its peak, Sears still controls a large square footage on virtually concessional terms. When Mr. Lampert closed a store, he doubled or tripled the rental amount using a Whole Foods or other luxury retailer.
When he closed a store, he also did not take an inventory bath, as most retailers do. In this way, money has been made available to cover the costs of maintaining the remaining stores.
And while Sears has lost money, it has spent more than $ 4.5 billion to improve its retirement financing. Sears helps more retirees than active workers – 100,000 vs. 70,000 – in a retail sector where most competitors do not offer pensions. In fact, Sears has all the claims of being one of the most valued clients of Pension Benefit Guaranty Corp., unlike some companies that have sought bankruptcy with enthusiasm to break free from their obligations in retirement.
When first attracted by Sears, Mr. Lampert saw the craze for big advertised promotions that attract a customer who never goes shopping at Sears again. Its use of membership rewards to form a loyal and repeat customer has been a key strategy – just as it has been for Amazon, which now extends to physical stores to better serve its most loyal customers.
"Our important physical footprint and reliable service capabilities," Lampert said in one of his many blogs, "are real differentiators for us and what we mean when we talk about the power of Sears. ".
Part of these problems will, of course, resonate in the ears of a customer who has visited a store that is essentially in runoff mode under Mr. Lampert. They are falling apart, they are filthy. Mr. Lampert has long been reconciled with their slow death.
The shy billionaire vis-à-vis the media addressed this column once, in 2009, to express his opposition to the federal treatment reserved for investors of banks. And no profile fails to mention that he has already been kidnapped in a parking lot and released. As Sears' largest shareholder and owner, he will likely be the big loser of this week's bankruptcy. He wants to lend an additional $ 300 million to help the channel reorganize.
Because of the many hats he wears, he can also hope to become the biggest target of other creditors. He manages a hedge fund, has been both president and chief executive officer and president of Sears and has been the buyer or recipient of many assets. We are already talking about recovering the management fees required by his company. We are talking about recovering rents paid to a company that it controls in part and that owns the land in some Sears stores. Be that as it may, rivals will have trouble showing that he has behaved like a man with the sole objective of maximizing his billions.
Look, everyone wants to believe in a Steve Jobs miracle for all businesses in distress. In theory, Mr. Lampert could have sold everything and used that money to create
and called it "Sears" and today, he would be a great flipping artist.
But it would have been necessary for someone, for the benefit of its residual applicants, to manage its endangered stores. His retail employees would have been out of work. For this, it took someone to take over the factories
Apple
abandoned when he stopped manufacturing in the United States. There is no huzzah in the commercial media for those who accept the challenge of managing declining assets, but future MBA students may find more in the story of Eddie Lampert. -Sears that a simple narrative of absolute incompetence and failure.
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