The Decline of Sears

When Lampert took over Sears there were so many articles drawing a parallel to Buffett taking over Berkshire way back in the day. Both were successful hedge fund managers who took control of a declining business. Ostensibly, Lampert was going to leverage Sears&#x27; assets (mostly the real estate) to develop a Berkshire-esque portfolio of strong companies.<p>He started off in that direction, buying Lands End and making a bid for Restoration Hardware. I recall an interview or press release laying out a vision for Sears as a &quot;store of stores&quot; that showcased iconic American brands - Kenmore, Diehard, Lands End, etc.<p>Somewhere along the line that dream died, and the cash flow was used mostly just to repurchase shares while letting the stores Languish. A bunch of concepts were tried in a handful of stores, but none promised an attractive ROI so they were dropped. Bruce Berkowitz is another investor that used to get compared to Buffett an awful lot, and tied his fate to the Sears project. He&#x27;s still buying more shares and saying he sees value there.<p>I don&#x27;t really have a point other to say that investing is hard, and identifying talented value investors who will outperform in the future is even harder. Whether this was a dumb idea all along, or a poorly executed good idea is tough to say.

This long MetaFilter comment from 2007 is my all-time favorite explanation about what Sears had, and what they could have become, and how they let it all slip away:<p><a href="http:&#x2F;&#x2F;www.metafilter.com&#x2F;62394&#x2F;The-Record-Industrys-Decline#1742245" rel="nofollow">http:&#x2F;&#x2F;www.metafilter.com&#x2F;62394&#x2F;The-Record-Industrys-Decline...</a><p>The catalog. Allstate Insurance. Coldwell Banker. Dean Witter. Prodigy! The Discover Card.<p>The goodwill, the name recognition, the money back guarantee. All gone now.

I have to be careful buying tools from Sears now (which is really the only reason I go in there), because they&#x27;ve started selling cheap knock-off stuff under the Craftsman label, that isn&#x27;t up to the old quality standards and doesn&#x27;t have the Craftsman lifetime warranty on it.<p>I think the worst was a socket set I picked up, where the chrome was literally coming off in flakes after a couple months.

I recently built a kitchen and made the huge mistake if buying appliances from Sears. I am in awe of how badly this company performed.<p>First delivery attempt, they called the night before to give me a window. Delivery driver called me to make sure I will be home and that he would be there in 30 minutes. They never showed up. After calling I learned the products were not in stock.<p>They did the exact same thing on the second delivery attempt.<p>Third delivery attempt they deliver a damaged fridge.<p>Fourth attempt, they opened the truck and they did not strap down the fridge. Parts everywhere.<p>Fifth, they got it right. Normally I would have cancelled the order but the experience became a curiosity. How badly could a company mess up? Turns out, a lot.

They just picked up a guy from Amazon and are building their data science team. Should be interesting to read the same article next year.<p>Edit: I think this is going to have zero impact on their biz. I got a recruiter solicitation earlier this week and started laughing. Additionally, &quot;PhD is a firm requirement.&quot;

One item that always struck me as something these large retailers should do to leverage their physical locations is to provide same&#x2F;next day delivery. With the ability to pick up the item in store same day when ordering it online what stops them from delivering it. It would require a large investment in delivery vehicles and drivers, but some of these stores have some of that already. Sears has it because they deliver appliances and Best Buy with their Geek Squad technicians.<p>Some businesses do this for other businesses. Staples, Napa, OfficeMax, etc. Why not extend this to the consumer. I would venture to guess they feel that there is no ROI. But if people are not going in the store, give them a reason to buy from you anyways.

I believe that for at least ten years there has been a clear path forward for Sears. It&#x27;s just that management refuses to follow it.<p>The way forward is for Sears to move completely over to franchising. I remember working in a small town in West Michigan fifteen years ago when a local opened a Sears franchise store, it carried a small subset of what a regular Sears store carried kind of a greatest hits.<p>I was certain that it would be a complete failure. I didn&#x27;t know anyone who shopped at Sears and the brand would be a drag on the new business. I was totally wrong the new store was a huge hit! I got to know the manager and there are a couple hundred of these stores and the overwhelming majority succeed.<p>Sears is sitting on a lot of valuable real estate that they could sell if the big stores were sold. Franchise stores would popup in the communities that would support them. Just because there aren&#x27;t any franchise stores in big cities doesn&#x27;t necessarily mean they wouldn&#x27;t succeed. Apparently the big brand still has some pull, but the overhead of the big store pulls it down.<p>The key is local owners who are free to stock Sears brands or chose other merchandise, people who understand their communities and can provide great service.

I used to work for a company that sold the majority of their product to sears. As the only one in the company that actually knew anything about technology, it was my job to make sure our products and company information were set up and up to date in sears&#x27; systems. Their systems consisted of multiple online management portals where you&#x27;d supply everything from product weight and size to your fax number to how you wanted to get paid, and appeared to have not been updated since 1998 or so. One wouldn&#x27;t work at all unless you were using Internet Explorer 6. Updating product info required changing it in multiple places as well as emailing them a spreadsheet with the exact same info.<p>~4 years ago they announced that they had partnered with some SaaS provider do modernize their systems. It required re uploading all your product data, but I was excited to finally get rid of IE 6. That is until I discovered that they couldn&#x27;t bare to replace their legacy systems, and the new one was just a flashy way to manage an arbitrary subset of your product data, but other changes still require using the old system.

My town has a K-mart that I refuse to go to because the customer experience is so pitiful and the checkout process is glacially slow. There is no nearby competition from Target or Wal-Mart. They could own retail in this area but instead they hold up lines of customers with the stupid POS systems that are set up to print out 4 feet of receipts causing the printers to constantly run out of paper.

Sears has good automotive repair services, decent large appliances, and a competent line of tools and car parts.<p>Their other consumer goods such as clothing, sporting goods, shoes, and electronics seem somehow lacking. There is a disconnect somewhere. Once, while I was browsing at the local Sears, an employee sourly commented, &quot;We sell fishing rods but no hooks.&quot;<p>The prices are high compared to the other big box retailers, let alone Amazon. Their website lacks the rich shopping experience of Amazon. Speaking of hooks, there is nothing to draw customers into the store, no focus, no reason to go in and browse. It&#x27;s a dull, utilitarian experience.<p>Sears is big, has excellent brand recognition, and still occupies a lot of prime commercial real estate. What they seem to be lacking is a refreshed product line, cutthroat pricing, and the brilliant marketing and advertising that is needed to draw in business.

The decline of sears is an interesting subject, but this particular blog post is just blogspam. Better to link to the actual article this blogspam post is inspired by:<p><a href="http:&#x2F;&#x2F;www.forbes.com&#x2F;sites&#x2F;adamhartung&#x2F;2016&#x2F;02&#x2F;11&#x2F;the-5-ways-ed-lampert-destroyed-sears&#x2F;#3e432adb41de" rel="nofollow">http:&#x2F;&#x2F;www.forbes.com&#x2F;sites&#x2F;adamhartung&#x2F;2016&#x2F;02&#x2F;11&#x2F;the-5-way...</a>

What comes to mind for different retailers:<p>Wal-Mart: Cheap<p>Target: Not as cheap but Sorta hip and clean<p>Nordstrom: Excellent customer service<p>Forever 21: Fashionable and cheap<p>Sears: Not sure??<p>JC Pennys: Kinda like Sears but at least we are trying<p>The thing is Sears has been like this for so long. How did they at least not try?

There is something seriously wrong with a chain that had &quot;catalog store&quot; in its soul not being able to adapt to the web.<p>Worse, some of the &quot;Sears&quot; stores in rural areas are actually just using the name under license. They are not doing the parent company any good.

They are <i>much</i> more interested in selling you credit than in what they are in business for.

Funny, just bought a Samsung range there, delivered for free yesterday, best price in town for this unit. A few automated delivery date confirmation calls too many, otherwise great experience. I hope the Koreans have a higher standard then Kitchenaid&#x2F;whirlpool, I&#x27;ve had 3 bad experiences in a row.

I HATE SEARS.<p>Sorry, let me start off with a story: So my wife and I are looking to replace a Queen size bed with a King size one - we find the one we want at Sears online, cool, place an order.<p>Checkout, put in info, order done. Get notification email, I had put in one of the other mattresses we had been looking at (like an idiot) - ok, no problem I think, I JUST made the order, I will cancel it and get the one that we had wanted.<p>I call the customer service line. &quot;We can&#x27;t cancel it, it&#x27;s already with the shipping department.&quot; Ok, I don&#x27;t care - tell them it&#x27;s cancelled, so I can order the right one? &quot;I&#x27;m sorry, I can&#x27;t do that.&quot; Alright, let&#x27;s do the &quot;Connect me to your supervisor&quot; dance!<p>Get to the &quot;next level&quot; supervisor; this person says, &quot;I can&#x27;t cancel the order, it&#x27;s already on the truck.&quot;<p>...You put an order on a truck within 15 minutes of me clicking the button that isn&#x27;t set to be shipped for two weeks? Is your warehouse made of trucks?<p>&quot;Ok, take it off the truck.&quot; I say, convinced I had just solved the problem.<p>&quot;I can&#x27;t do that. You&#x27;ll have to receive it, and then return the mattress.&quot;<p>&quot;...You mean I&#x27;ll have to wait two weeks, for you to ship me a mattress I don&#x27;t want, just so I can return it? That doesn&#x27;t make any sense.&quot;<p>ON TO THE NEXT LEVEL OF SUPERVISOR!<p>By now, what should have been a friendly 30 second call that would replace one order with another one, is 45 minutes of me being increasingly confused and pissed off, but it becomes clear after the third person comes on the line.<p>&quot;Sorry to hear that you want to cancel the order, sir. Could we convince you to take the order, and accept a discount?&quot;<p>WHAT THE FUCK, FOR THE WRONG MATTRESS? Then it hits me - they were giving me the run around, specifically to keep that &#x27;sale&#x27; in their system, at almost any cost to them.<p>&quot;NO, cancel the order IMMEDIATELY, and I won&#x27;t sign for it if you make the mistake of shipping it here!&quot;<p>This <i>finally</i> convinces them to cancel the order. What a waste of an hour! As an upshot, I am so pissed off at this point that I decide not only to not order the right item from Sears, but never to buy anything there <i>ever again</i>, and to inform everyone I had ever met that Sears is terrible and to advise them never to shop there, ever.<p>So now that Sears has come up, I&#x27;m going to do the same thing I promised to do then:<p>Don&#x27;t ever shop at Sears, ever - if there is a damn hurricane and it&#x27;s the only place with sandbags, I still wouldn&#x27;t trust them.<p>I know HN is more meta&#x2F;intellectual and not a personal anecdote kind of place, and I&#x27;d keep to that rule, but the fury came over me when I saw Sears, and I couldn&#x27;t help myself.

This article doesn&#x27;t address the fact that Sears was once a standard. However they didn&#x27;t change as the younger generations came on. I don&#x27;t know as their customers are switching to a competitor as much as they are just dying.

Any mention of the fall of Sears under Eddie Lampert should not omit Lampert&#x27;s vision of running the company under Ayn Rand&#x27;s Objectivist principles, and how that completely failed:<p><a href="http:&#x2F;&#x2F;www.salon.com&#x2F;2013&#x2F;12&#x2F;10&#x2F;ayn_rand_loving_ceo_destroys_his_empire_partner&#x2F;" rel="nofollow">http:&#x2F;&#x2F;www.salon.com&#x2F;2013&#x2F;12&#x2F;10&#x2F;ayn_rand_loving_ceo_destroys...</a><p><a href="http:&#x2F;&#x2F;www.bloomberg.com&#x2F;bw&#x2F;articles&#x2F;2013-07-11&#x2F;at-sears-eddie-lamperts-warring-divisions-model-adds-to-the-troubles" rel="nofollow">http:&#x2F;&#x2F;www.bloomberg.com&#x2F;bw&#x2F;articles&#x2F;2013-07-11&#x2F;at-sears-edd...</a>

For decades it has been a poster child for mismanagement.<p>I took my Tv-b-gone to a business school and zapped the TVs that had CNBC and stuff like that and they turned them back on in an hour and the next time I used it they put tape on the IR sensors.<p>I zapped the TVs at sears and they were still off a year later.<p>Sears is the only entity that has denied me credit. (Doesn&#x27;t stop them from asking me to apply.<p>For years I was a fan of sears auto center because the cashier would sometimes give me 4 tires for the price of one and they were the kind of lovable gearheads that always had the manager&#x27;s camaro. They went on of business and an mma training center moved in and I don&#x27;t get it because this is the only state where mma is banned...