But just how much did Lampert vacuum out? That’s a surprisingly hard question to answer, if only because of the variety of schemes he employed. Lampert was at one point simultaneously Sears’s CEO, board chairman, transaction partner, landlord, and banker. (Upon the bankruptcy filing, he stepped down as CEO.) Because of his outsized role as Sears’s number-one creditor, he stands to gain in a bankruptcy even if his shares of Sears stock get wiped out. Through this ploy, Lampert has been able to transfer to himself all the salvageable assets of the company. And so far, it’s worked out.
SPJNK.
yes this has been apparent for several years already...it is called DBM (death/dismemberment by management)
a bit unusual for such an iconic and highly-visible company...but it happens to more firms than is probably supposed
the managers take the best, most valuable parts and discard the liabilities either in bankruptcy or by just walking away and leaving them behind to die slow deaths on their own
Sears was a publicly traded company. As CEO, Lampert had a fiduciary duty to not sabotage the interests of the shareholders in favor of his own. I’m not an accountant but on the surface it seems almost akin to embezzlement. The SEC ought to look into it, and sanction or charge this guy if he acted illegally.
were I king for a day, one of the first things I'd decree is that CEO and Chariman of the board of directors cannot be the same person. It's an inherent conflict of interest that works contrary to the interests of the shareholders, which is who the board is supposed to represent. The board cannot be expected to exercise true oversight of hired help like the CEO when the CEO is running the board, leaving the shareholders with no recourse if that CEO is incompetent or a thief.
Think about what a retail chain is, and ask yourself a simple question: What assets does it own?
Most retailers have minimal tangible assets. If they own their stores they have real estate, but if they are tenants in shopping centers (I believe this is usually the case) then their major assets are: (1) their brand name, (2) financial service divisions that issue credit to their customers, and (3) their inventory.
For Sears, Item (1) has lost most of its value by now. Item (2) loses its value as customers walk away. Item (3) is a transient asset that comes with a carrying cost (hence the incentive to sell inventory as quickly as possible).
Interestingly, Sears apparently has another "asset" that may be very attractive to buyers: its ongoing financial losses. It appears that Sears' losses can be used by certain buyers (maybe even only Lampert himself) to offset billions of dollars in future taxable income.
It sounds bizarre, but I've heard stranger stories in the business world.
When there’s a crook at the top of a company it always filters down...
Just another example of the slow death of brick and mortar stores.
Way to go Eddie, you’re a successful Captain of Business and a cool guy to boot. I’ll bet you’re the star of the country club. /s
Sears died about twenty years ago.
It just took this long for the body to die.
What a shame. They had the fulfillment system 100 years ago.
Sears was in trouble years before Lambert came along. Sears never adjusted to the digital age, and competition from WalMart.
Same with Nortel. And many other big public corporation we had CEO hollow out the companies into salaries and earnings for themselves. I think Soros was less than honest about how he ran his hedge fund as well.
and in conjunction with this financial gutting, Lampert (who has zero experience in retail) personally ran Sears Holding as CEO, and during his tenure both as CEO and board chairman, not a penny was spent on infrastructure improvements (such as replacing Sears’ antique 1970’s point of sales system), and marketing (such as TV ads, flyer mailings, Internet ads, and newspaper inserts) was pretty much cut to zero
Marketing and modern point of sales systems are pretty much Retail 101, so it looks to me like Lampert was indeed deliberately destroying Sears ...
My wife managed a Sears Appliance Store for about five years. During that time she noted that instead of a CEO urging its workers to be a team, Sears put them in competition with each other. For instance, he put “service” in competition with “sales”. “Service”, which once Sears was famous for, was almost non-existent. They would claim said appliance “couldn’t be repaired”, requiring my wife - and other store managers - to take the “hit” and give the customer a “free” replacement. Then, some maintenance guy would take the defective one “to the dump (home)”, do a quick repair, and use it forever.
They had lots of crazy rules, all designed so that the local stores took the losses.
The only thing I remember good was good health/dental insurance.
Eventually, Sears closed most Home Appliance Showrooms, and sold the remaining to “franchisees”.
I’m glad she left there, they were working her to death.
I worked in the retail industry for years.
CEOs routinely engaged in behavior that by rights
ought to be considered criminal.
Repeated Chapter 11 filings were little more than a way to stick it to their vendors. And they played outrageous legal games of hide-and-seek with their assets.
The CEO should never be a voting member of the board or President of the board-that is an inherent conflict of interest. However, that does not relieve the board or the CEO of fiduciary responsibility. Seems to me that shareholders need to file a lawsuit.
From a personal experience, we always ordered our appliances and many other things from Sears catalog when we had a local store. In fact, I prefer to have an actual catalog to peruse rather than the computer and make a list, which I then will fill out the order on the computer. For me, it’s faster to pick the items from the catalog.
After that local store closed, we ordered appliances from the catalog store in an adjacent town. Of course the appliances were great, and lasted a long time, so once we built our house, we didn’t need to order anymore for a while.
The Store in the adjacent town had a person that was always there, who was rude with a bad attitude, so the last time we bought an appliance, we went to LOWES, because the sales men were helpful and acted like they gave a darn.
If the Sears Catalog store had remained open in our town, we would have continued to use it, and a lot less Walmart, because we always try to support local businesses, and I loved their catalog.
When Sears left, we switched to Montgomery Ward, but they eventually closed too. Then, one after another the Car Dealerships closed. Now, there’s just a few used car dealerships, but Ford, Chevy, Chrysler have all closed.
Most of the stores on main street have been replaced by antique dealers or used/thrift stores. A few spaces are sitting empty. We still have a Dollar General though, but Ben Franklin got hit by a tornado, and they never reopened.
Well, this has been a sad post. Times change-not always for the better.
Reading this article, the phrase “a pair of pliers and a blowtorch” keep coming to mind.
Has anyone else noticed how often “hedge fund” millionaires are behind the globalist schemes destroying Western Civilization?