I just had to shake my head after reading this one. This Mr. Lampert is, well, an eccentric chap and, sorry to counter his statement, but either in deep denial about Sears’ states, or a terrible liar.
He spends a great deal of time comparing Sears to Amazon, and in strange, illogical ways.
“The company has not reported a profit for six years, which Lampert compared to Amazon.com Inc’s early unprofitable growth.”
I fail to see this comparison as apt. or even close to related. Sears is no startup, and Amazon has been focused on posting profits for some time (since 2004, I believe). But if their goals is to invest their profits back in the company, do it and then talk about it. Based in reality, it can be a compelling narrative.
Here’s something to mull about, when comparing Amazon & Sears: “Amazon’s total revenues grew 27 percent to $136 billion in 2016, while Sears’ revenues fell 12 percent year-on-year to $22.1 billion.”
This one really puzzled me:
When “…asked if Lampert was in denial about the company’s losses and paranoid”, he “refuted his question, saying there were “behind-the-scenes” counterparties trying to take advantage of the company’s situation“.
Apparently, the reporting is “deliberately unfair”. Wow…serious delusions of grandeur. A whole sector? All the reporters are in collusion against Sears? Sorry, that I doubt. Sears isn’t that big a player in retail anymore, especially as the space got saturated and online started eating everyone’s lunch (in the retail sector).
“”Excuse my rant but a lot of what we’re doing deserves a chance to see the light of day.”
Well, that’s a PR failure, if it’s based anywhere in reality (which I’m having a hard time buying).
Then there’s the reliance on their new loyalty program, “Shop Your Way”. Seems a puzzling thing to bet the farm on. As Erik Gordon (professor at Ross School of Business) puts it: “‘A loyalty program was innovative 20 years ago. Now, it is like saying ‘our stores have electricity.’ Sales still go down, so the loyalty program isn’t turning Sears around”.
Sears is in trouble, an a significant piece of it seems to be leadership. Their ill-fated venture into a Lord of the Flies internal structure was probably the most extreme of their poor choices. Now they’re at a point where they’re destroying their future to stop the cash bleed and keep operations afloat. Cutting hours and pay simply drives your best producing staff to your competition.
With Sears closing stores in solid retails markets (like my nearby Alderwood Mall), it’s hard to put much stake in a turnaround. The retail sector can be scary, and I’m hard pressed to think of a company that’s pulled themselves out of a tailspin like Sears’. Perhaps I’m wrong. I’d like to be. I grew up with the iconic Sears catalog, circling Christmas hints in their holiday catalog. The emotion is there. However, my last few experiences at their stores were of a morosely apathetic crew in dismal, worn out stores. It’s gong to take more than a loyalty program to pull back from that.
On that note, Investopedia has a great piece from last month, “Who Killed Sears? 50 Years on the Road to Ruin“. A solid and detailed look at the history of the venerable brand and it’s turn towards doom.